MAGISTRAL PROPERTY

Inca Pacific Resources Inc. announces that Activos Mineros, the Peruvian agency responsible for administering Inca’s contract with the Government of Peru (“GOP”) has advised the company that it intends to withdraw $3M that Inca currently has on deposit as security for its investment commitments in connection with the company’s Magistral Project. Activos Mineros claims that the company did not satisfy its obligation to make certain investments and minimum levels of expenditure for the 2008 fiscal year which ended in February 2009. Activos Mineros also asserts that a pre-production spending guarantee in respect of approximately $24M for the 2009 fiscal year is required. Inca Pacific believes that it has honoured its obligations and confirms that it has spent in excess of the minimum expenditure requirements for the 2008 fiscal year. At the same time, the Inca Pacific is in active negotiations with the GOP to secure an extension for the deadline for bringing Magistral into production, currently set at December 31, 2011.

Inca Pacific Resources Inc. announces that it has received formal approval of the Environmental and Social Impact Assessment for the Magistral Copper-Molybdenum Project from the Peruvian Ministry of Mines and Energy. The initial ESIA document was submitted on March 28, 2008 and was followed by presentations to local communities together with a process of public consultation, commentary and response and interaction with several government agencies. Magistral is located in northern Peru approximately 260 kilometers east of the city of Trujillo. The project involves development of a 20,000 tonnes per day open-pit mine and concentrator operation that will produce separate copper and molybdenum concentrates over a 15-year period.

Inca Pacific Resources has decided to put construction and infrastructure projects of the property on hold. As result of circumstances and the uncertainty of when project financing might be obtained the Inca Pacific has decided to: 1. cancel the previously placed order for a ball mill announced in August; 2. postpone any new orders for long lead time equipment; and 3. postpone the upgrade of the main access road. All efforts will now be focused on obtaining ESIA approval and the principal construction permits. Once permitting has been achieved and assuming a return of more stable equity, debt and metal markets the Inca Pacific will resume development of the project