1030 Wellington Street, West Perth, Western Australia, 6005 • PO BOX 249 Subiaco, 6904

Ph: + 61 0 407 242 810 • ABN: 36 128 512 907

18 September 2012

EXTENSIVE GOLD AND SILVER MINERALISATION IDENTIFIED IN SECOND BRECCIA PIPE AT CHANAPE

HIGHLIGHTS

New assay results from previously drilled Breccia Pipe 10 show gold and silver mineralisation

from near-surface to 200m depth

Significant mineralisation identified over 190m interval from 6.4m with sulphides logged to 300m

First-pass sampling assay results include the following:

From (m) To (m) Length (m) Au g/t Ag g/t Cu % Pb% & Zn%

Au Eq* g/t

17.10 20.30 3.20 1.30 5.66 0.04 0.79 1.49

21.90 24.40 2.50 0.92 5.31 0.04 0.24 1.16

25.45 27.90 2.45 2.04 14.45 0.10 0.17 2.52

29.70 32.45 2.75 1.52 4.32 0.04 0.11 1.69

33.95 36.95 3.00 2.73 30.8 0.16 0.10 3.58

39.25 42.30 3.05 2.46 22.7 0.26 0.20 3.35

47.80 51.00 3.20 1.36 3.67 0.01 0.34 1.58

55.75 58.80 3.05 1.62 5.34 0.02 0.14 1.79

90.40 93.10 2.70 1.78 16.45 0.26 0.07 2.50

107.70 110.35 2.65 4.89 12.75 0.07 0.14 5.28

Infill sampling and assaying to enable reporting of continuous intersections is planned to take place at the

time of the upcoming drill program.

Breccia Pipe 8 and Breccia Pipe 10 thought to be magmatic hydrothermal breccia bodies

which are generally associated with proximal porphyry centre

Both pipes to be drill tested to depth in coming weeks

Strong indications that Chanape is multi-phase porphyry system with multiplicity of

gold-bearing breccia pipes centred over late-stage porphyry intrusion

Results from exploration at Inca’s flagship Chanape Gold-Silver-Copper Porphyry Project confirm discovery of another mineralised breccia pipe with gold and silver mineralisation to nearly 200m depth. Inca’s recent exploration program at Chanape comprised re-logging and sampling of 2,352 metres of diamond core from previous drilling and geological mapping in an area covering Breccias 8, 10 and 11. Inca accessed this drill core and completed work that the previous owner had not finished. The results point toward a multi-phase mineralised breccia-porphyry system being present at Chanape.

Page 1

1030 Wellington Street, West Perth, Western Australia, 6005 • PO BOX 249 Subiaco, 6904

Ph: + 61 0 407 242 810 • ABN: 36 128 512 907

Gold-silver-copper bearing magmatic hydrothermal breccia pipes 8 & 10

Detailed analysis of core from previous diamond drill holes CH02, CH03, CH04 (Breccia 8) and CH12 (Breccia 10) have confirmed the prevalence of widespread gold, silver and copper mineralisation associated with phyllic (qtz, sericite, pyrite) and propylitic (qtz-epidote-chlorite-magnetite) alteration assemblages.

Diamond drill hole CH12 was logged by the previous explorer at Chanape as a “crackle breccia” and little else was known about the breccia.

CH12 was logged in detail by ExploAndes on behalf of Inca and a total of 31 samples were taken from the core. Results of this work show that CH12 intersects a series of breccias, believed part of the near-vertical lobate breccia system (Figure 1). Intersections of gold, silver and, to a lesser extent, copper, lead and zinc occur within the breccia and in the surrounding welded andesitic tuff.

Significant gold and silver mineralisation has been identified from 6.4m to 196.2m, an interval of 189.8m. Within this 189.8m interval 23 samples were taken with a combined section of 65.55m.

Sample

NumberFrom To Length Au g/t Ag g/t Cu %

Pb & Zn

% Au eq g/t

1039 6.40 8.50 2.10 0.38 3.01 0.01 0.03 0.46

1040 8.50 10.70 2.20 0.42 6.55 0.06 0.04 0.64

1041 10.70 12.30 1.60 0.38 2.86 0.04 0.03 0.49

1042 17.10 20.30 3.20 1.30 5.66 0.04 0.79 1.49

1043 21.90 24.40 2.50 0.92 5.31 0.04 0.24 1.16

1044 25.45 27.90 2.45 2.04 14.45 0.10 0.17 2.52

1045 29.70 32.45 2.75 1.52 4.32 0.04 0.11 1.69

1046 33.95 36.95 3.00 2.73 30.8 0.16 0.10 3.58

1047 39.25 42.30 3.05 2.46 22.7 0.26 0.20 3.35

1049 47.80 51.00 3.20 1.36 3.67 0.01 0.34 1.58

1050 55.75 58.80 3.05 1.62 5.34 0.02 0.14 1.79

1051 67.55 70.25 2.70 0.17 1.29 0.00 0.06 0.17

1052 71.65 75.60 3.95 0.25 0.49 0.00 0.05 0.28

1053 80.50 83.75 3.25 0.15 0.54 0.00 0.02 0.17

1054 90.40 93.10 2.70 1.78 16.45 0.26 0.07 2.50

1055 93.10 95.55 2.45 0.54 4.58 0.05 0.02 0.71

1056 107.70 110.35 2.65 4.89 12.75 0.07 0.14 5.28

1057 128.50 131.40 2.90 0.13 2.68 0.01 0.03 0.20

1058 144.90 147.85 2.95 0.44 13.55 0.05 0.10 0.81

1059 148.70 151.90 3.20 0.63 7.58 0.02 0.16 0.87

1061 157.60 160.70 3.10 0.24 7.96 0.01 0.27 0.51

1062 176.75 179.90 3.15 0.06 3.26 0.01 0.03 0.14

1063 192.75 196.20 3.45 0.65 0.80 0.01 0.03 0.70

Table 1: CH12 assay results – gold, silver, copper and combined lead/zinc from 6.4m to 196.2m. QAQC samples 1048 and 1060 not included in the listed samples.

Page 2

1030 Wellington Street, West Perth, Western Australia, 6005 • PO BOX 249 Subiaco, 6904

Ph: + 61 0 407 242 810 • ABN: 36 128 512 907

Samples were taken at various intervals throughout the length of drill hole CH12, including both the breccia and the andesite tuff. Results show that gold and silver mineralisation, in particular, extends beyond the breccia, with some of the higher results occurring in the andesite tuff.

Additional sampling, designed to complete the mineralisation profile of the sulphide-bearing hydrothermally altered breccia pipe and altered andesite intersected in drill hole CH12 to 300m, will provide the company a valuable data-set, hitherto restricted by interval sampling completed to date.

“It is interesting to note that gold/silver appears to be spatial related to zones of alteration and sulphidisation, not just to the breccia”, says Inca’s Managing Director, Mr Ross Brown (Figure 1). “Sulphides have been logged up to 5% in the breccia and andesite tuff down to 300m”.

Figure 1: Schematic NE-SW cross-section between Breccia 8 and Breccia 10. The lobate profile of both breccia complexes is not uncommon in magmatic hydrothermal breccias.

CH02, CH03 and CH04 at Breccia 8 and CH12 at Breccia 10 intersect magmatic hydrothermal breccias and welded andesitic tuff that are extensive altered including high degrees of sulphidisation and silicification.

Page 3

1030 Wellington Street, West Perth, Western Australia, 6005 • PO BOX 249 Subiaco, 6904

Ph: + 61 0 407 242 810 • ABN: 36 128 512 907

Verification sampling and assaying at Breccia 8 (CH02, Ch03 and CH04) has now confirmed widespread gold, silver and copper mineralisation (as previously reported to the ASX).

Figure 2: Schematic N-S section through Breccia 8. The three holes into Breccia 8, CH02, CH03 and CH04, drilled in a radial pattern are projected on this section.

Detailed petrographic studies of Breccia 8 and Breccia 10 now confirm that these bodies are metal-rich magmatic hydrothermal breccia pipes. In cross-section the pipes are interpreted as complex lobate vertical bodies open at depth (Figures 1 and 2). They show alteration zoning typical of such bodies in close spatial association with underlying mineralised porphyry. Breccia 8 grades from upper phyllic alteration to lower propylitic alteration.

Magmatic hydrothermal breccia pipes are a common component in mineralised porphyry systems and in many cases can form part of the porphyry ore body. In certain cases, magmatic hydrothermal breccia pipes can form the vast majority of the “porphyry” ore body – as is the case at the 5 Billon tonne Los Bronces-Rio Blanco porphyry mine in Northern Chile.

Figure 3: Schematic section of a magmatic

hydrothermal breccia pipe, Sillitoe (2010) • Magmatic hydrothermal breccia pipes develop above porphyry stocks (intrusions) and are derived from rising liquid-rich hydrothermal volatiles.

Page 4

1030 Wellington Street, West Perth, Western Australia, 6005 • PO BOX 249 Subiaco, 6904

Ph: + 61 0 407 242 810 • ABN: 36 128 512 907

It is thought that many blind breccias may occur at Chanape in addition to those already known. Recent mapping is proving this to be the case.

Multiple porphyry system interpreted at Chanape

At least three phases of intrusive porphyry “stock” are now interpreted at Chanape; an early-phase,

fine-grained monzonite porphyry, followed by a second monzonite porphyry, which in turn is followed

by a mineralising porphyry stock, as indicated by the emplacement of hydrothermal breccias.

Early phase porphyries

Two monzonite porphyry intrusions have been

identified at Chanape. A monzonite porphyry has

identified in CH01 (announced on 2nd August

2012). Follow-up mapping has subsequently

found that this porphyry outcrops along the

lower sides of a valley that sub-parallels Cerro

Chanape (the topographic high that dominates

the project area). In outcrop, clasts of an earlier,

finer grained, monzonite porphyry has been

identified within the coarser-grained porphyry

(RIGHT).

The finer grained porphyry is the earliest porphyry intrusion interpreted as the earliest porphyry

intrusion (interpreted to date) at Chanape.

Later phase porphyry

A third porphyry stock is interpreted at Chanape. This later-stage porphyry is believed to have caused

widespread metal-bearing brecciation (including the emplacement of Breccia 8 and Breccia 10) and

associated hydrothermal alteration. Hydrothermal brecciation and accompanying alteration is caused

by the influx of liquid-rich fluids rising from an underlying porphyry stock. At Chanape, these

hydrothermal “events” are mineralised in precious and base metals.

Monzonite porphyry clasts have been identified in the hydrothermal breccia pipes, unequivocally

placing the mineralising porphyry stock below, and at a later stage, than the monzonite porphyry that

occurs at the surface.

Upcoming Drilling

Drilling is scheduled to commence at Chanape this month. The aim of the drilling is to understand the

relationship between the mineralised hydrothermal breccia pipes and the underlying mineralising

porphyry stock.

Page 5

1030 Wellington Street, West Perth, Western Australia, 6005 • PO BOX 249 Subiaco, 6904

Ph: + 61 0 407 242 810 • ABN: 36 128 512 907

Figure 4: Map showing location of Breccia Pipe 8 and Pipe 10/11 Complex with proposed drill holes

As seen in Figure 3, magmatic hydrothermal breccia pipes grade from clast/matrix-type breccias

(displaying various breccia fabrics) to igneous breccias to the originating porphyry stock.

Using the analogy that the breccia pipes are the chimneys of a furnace; the porphyry centre is the

equivalent to the furnace and it is that part of the system that potentially hosts the disseminated ore-

zone. In understanding the juxtaposition of the chimneys and the furnace the Company moves

toward a greater understanding of the porphyry system and making a potentially significant discovery.

Deep holes have been designed to penetrate into the porphyry at Breccia 8 and Breccia 10.

Standardised samples will be taken every metre from surface to end-of-hole to better understand the

extent of mineralisation. Inca’s Managing Director Ross Brown and Geologist, Mr Trent Potts are

currently in Peru and have recently visited the drill sites.

Proposed CH-DH01

Proposed CH-DH03

Proposed CH-DH02

Projected outline of Breccia 10 and 11 being part of the same large breccia pipe complex

Breccia 8

Breccia 10/11 complex

Page 6

1030 Wellington Street, West Perth, Western Australia, 6005 • PO BOX 249 Subiaco, 6904

Ph: + 61 0 407 242 810 • ABN: 36 128 512 907

Chanape Project Background

The Company’s Chanape Au-Ag-Cu Porphyry Project is located approximately 90kms east of Lima, in

the Pierina Gold Porphyry Belt. Chinalco's Toromocho 1.5Bt Cu-Ag-Mo porphyry mine development,

scheduled for production in 2013, is located 30km to the northeast of Chanape.

Chanape is considered highly prospective for Andean Au-Ag-Cu porphyry-style mineralisation as results

from all previous exploration, including the results and interpretations of Inca’s recent exploration are

consistent with characteristics of a porphyry system.

The co-existence of a large 2km x 1km breccia zone [comprising hydrothermally altered breccia pipes

and veins, two of which (Breccia 8 and 10) are pervasively mineralised in gold, silver and copper to

depth] with multi-tool physical anomalism and widespread porphyry style alteration, makes the notion

of the porphyry being present increasingly likely.

Ross Brown Managing Director

Contact Details

Ross Brown Managing Director Mobile Phone: 0407 242 810 Email address: rbrown@incaminerals.com.au

The information in this report that relates to Exploration Results is based on information compiled by Mr Ross Brown, Managing Director, Inca Minerals Limited, who is a Member of the Australian Institute of Mining and Metallurgy. Mr Brown is a full time employee of Inca Minerals Limited. He has sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration, and to the activity which has been undertaken, to qualify as a Competent Person as defined by the 2004 edition of the “Australia Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Brown consents to the report being issued in the form and context in which it appears.

Gold Equivalent (Au eq) calculation represents the total value of each metal, multiplied by a conversion factor (to obtain a standard price per unit), summed and expressed in equivalent gold grams per tonne (g/t). These results are exploration results only and no allowance is made for recovery losses that may occur should mining take place. However, it is the Company’s opinion that the elements included in this calculation (Au, Ag, Cu, Pb, Zn) have a reasonable potential to be recovered as evidenced in previous mining in the area and similar multi-commodity natured mines and deposit-types in the world. The price assumptions are: gold: US$1,735/oz; silver: US$33.68/oz; copper US$3.60/lb, lead US$0.95/lb and zinc US$0.88/lb.

Page 7