INCA PACIFIC RESOURCES INC.

Inca Pacific Resources reports that Activos Mineros the agency responsible for administering the Magistral Contract with the Government of Peru, reported that the Contract has been cancelled. The Contract governs the Company’s rights to the core mining claims which cover the majority of the Magistral deposit. The notification was delivered on December 1, 2009 and indicated that the Contract was cancelled as a result of Minera Ancash not posting the second year’s letter of credit of approximately US$24 million. The Company does not agree with the position that Activos Mineros has taken as to the cancellation of the Contract.