Inca Minerals Limited (Inca or the Company) recently updated the market on the progress of drill permitting required to commence drilling at the NE Area of Riqueza.

In today's announcement we wish to provide a brief explanation of the drill program itself, its purpose and objectives, as well as a more practical explanation of how and where we intend executing the NE Area drill program.

It is very useful to firstly know where the drilling will be. The fourteen planned holes occur within a polygon that coincides to the Ficha Tecnica Ambiental (FTA) permit area1 in the north east part of Riqueza. This part of Riqueza showed very strong aerial geophysical anomalies and then, subsequently, very strong geochemical and Induced Polarisation (IP) anomalies, surface mineralisation and alteration, all consistent with the targeted mineralisation types. This work culminated in the independent interpretation of two possible porphyry centres.

The broad parameters of the NE Area drill program are unchanged from the 20 January 2021 ASX announcement. The total planned metres is 6,070m. The total planned number of holes is fourteen. The hole depths range from 220m (the shallowest hole - RP05) to 750m (the deepest hole - RP01) with the average hole depth calculated at 433m. All holes are to be drilled at an angle except RP31.

We have contracted a global drilling company and will be using a track-mounted diamond core (DC) drill rig. The rig is highly mobile and has the capacity to drill to 1,000m depths (our deepest planned hole is 750m). We have opted for the DC drill technique so that we will have continuous solid rock core that is vital for the recognition of possible porphyry and skarn textures. The alternative drill technique, reverse circulation (RC) drilling, does notprovide this capacity. As discussed further below, all holes have multiple objectives from the top to bottom, so we shall be coring top to bottom. Every metre of core will be accurately logged and intervals of core will be selected for half-core sampling and multi-element analysis.

Drill Hole Grouping RP01, RP02, RP03 and RP04

The four planned drill holes with numbers RP01, RP02, RP03 and RP04 form the first grouping. They are targeting the western porphyry target, which is referred to as Mega-target #1. This grouping's proximity to the fly-camp and relative ease of access construction is also favourable in terms of sequencing.

With the aid of the west-east IP profile and the added aid of a recently created south-north IP profile, which integrates satellite imagery and geochemical data, the projected intersections of each hole makes the 'reach' and therefore, the purpose of each hole [visually] clearer.

This first hole grouping is testing for the presence of large-scale porphyry, skarn and carbonate replacement mineralisation associated with the porphyry mega-target. With known surface mineralisation in the vicinity, the entire projected length of each hole will be of interest. In other words, these holes do not target mineralisation just occurring at depth. Based on a generic Cu-porphyry model in limestone terrain, one might expect carbonate replacement mineralisation above skarn mineralisation which, in turn, is above and/or adjacent to porphyry mineralisation. In actual deposits, like those in Peru's Miocene porphyry belt, such simple zoning is the exception. Importantly, hole parameters will be flexible, so that possible mineralised intersections are followed up whilst to the rig is on the platform or in the area. This will be the case for all drill hole groupings.

Drill Hole Grouping RP06, RP07, RP08, RP09, RR41, RP42 and RP43

The seven planned drill holes with numbers RP06, RP07, RP08, RP09, RP41, RP42 and RP43 are likely to be drilled second. They are targeting the eastern porphyry target (referred to as 'Mega-target #2). It is not the intention of this ASX announcement to present all the IP profiles of the drill holes suffice to mention that the second hole grouping has a similar purpose to that of the first. Notwithstanding this, the second grouping is targeting a larger interpreted porphyry than that of the first grouping. Like the first grouping, this hole grouping is testing for large-scale porphyry, skarn and carbonate replacement mineralisation. Again, with known surface mineralisation in the vicinity, the entire projected length of each hole will be of interest.

Drill Hole Grouping RP05, RP31 and RP44

The three planned drill holes with numbers RP05, RP31 and RP44 are the likely third grouping to be completed. They are targeting an interesting zone between the two interpretated porphyries. In this area the targets include inter alia porphyry extensions, satellite porphyries, skarns and carbonate replacements. Like groupings one and two, surface mineralisation in the area makes each hole's entire length of interest.

Drill Hole Adjustments and Subsequent Phases of Drilling

As mentioned above, existing holes of the NE Area drill program may be adjusted and holes may be added. Depth, dip direction and hole angle are drilling parameters that may be altered that enable additional reach from an existing platform. In this way, the 6,070m may be seen as a minimum metreage. Importantly, if there is mineralisation at the forecast bottom of the hole, we are not compelled to stop. Should holes be extended, the depth capacity of the DC rig of 1,000m will allow this, even for the deepest planned hole (RP01 at 750m).

The Company also has the right to adjust platform positions without adjusting the FTA and EP permits if such positional changes are minor. Should larger positional changes/additions be recommended, a more formal notification process many be required. In addition, it is the intention of the Company to include the NE Area in its phase two drill program. This second program will cover the entire Riqueza Project area, and possibly new areas south of Riqueza. It is designed to test the remaining targets of the entire project and to follow-up on those possibly generated in the NE Area. It is anticipated that this second program will be under a category-2 Declaracion de Impacto Ambiental (DIA) permit.

Completed Drill Permitting and the Remaining Steps before Drill Mobilisation

The bullet-point list provided below is a convenient way to present the status of the drill permit requirements for the NE Area program. This quick reference shows that the final two permits are pending.

Contact:

Tel: +61 (0) 8 6145 0300

Email: info@incaminerals.com.au

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