Inca Minerals : MD's Company Update - December 2021

Phase-1drilling closes in Peru, whilst first-phasedrilling at Frewena looks set for early 2022.

MD'S COMPANY UPDATE - DECEMBER 2021

Targeting a new generation of Tier-1 mineral discoveries in Peru and Australia

onlyASX Announcement │ 2 December 2021 │ ASX: ICG

On behalf of Inca Minerals Limited (ASX: ICG; Inca or the Company) I would like to update you on recent and forthcoming Company activities. This update serves as an end-of-the-year message despite there being some ongoing programs. With two Company presentations at the Resource Rising Stars "Boom in the Room" conference and the Noosa "Unearthed" investor conference under the belt, I am reaching out to you, as I do from time to time, with the following key events:

• The completion of Ficha Técnica Ambiental (FTA) permit phase-1 NE Area drilling at our Riqueza Project in Peru;

• The completion of the Jean Elson airborne magnetic and radiometric (AMAGRAD) survey and near completion of the Frewena AMAGRAD survey;

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• The near completion of the Induced polarisation (IP) survey at MaCauley Creek in Queensland; and

• The planning and mobilisation of the phase-1 drilling at Frewena.

We approach the end the year with the vast majority of our drill targets intact and either ready for testing, or being prepared for drill testing. Whilst the NE Area drilling at Riqueza has not brought the success that was thought possible, we are already progressing with the next phase of drilling at Riqueza. I am certainly looking forward to 2022 with at least two major drilling programs planned at Frewena and Riqueza. With current and planned generative programs likely to add targets across our portfolio over the next few months, drilling is also expected at Jean Elson and MaCauley Creek.

Drilling at Riqueza

The FTA permit NE Area drill program was stopped after the seventh hole, hole RDDH030. A total of 3,738 metres were drilled to test the Puymanpata, Pucamachay (Chuji) and Yanacolipa targets (Table 1).

personal	Deferred		460788.6	8596244.9	4376.0	-60	90	600.00	Actual
	Hole_ID	Platform	Target	EAST	NORTH	Elevation	Dip	Azimuth	Planned
	Number	Depth (m)	Depth (m)
	RDDH024	RP01	Puymanpata	459292.4	8595914.7	4432.5	-60	315	750.00	756.50
	RDDH025	RP02	Puymanpata	459658.0	8595827.1	4346.1	-60	0	380.00	385.10
	RDDH029	RP03	Puymanpata	459731.7	8595671.3	4312.9	-60	0	450.00	750.30
	RDDH026	RP04	Puymanpata	459955.6	8595831.3	4259.5	-60	0	380.00	385.00
	Deferred		460174.4	8596278.6	4177.9	-60	90	220.00
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RDDH030	RP07	Yanacolipa	460763.2	8596058.0	4363.0	-60	90	350.00	450.00
RDDH027	RP08	Pucamachay (Chuje)	460900.8	8595328.0	4231.9	-60	0	560.00	555.50
	RDDH028	RP09	Pucamachay	461444.9	8595791.5	4353.4	-60	90	450.00	455.60
	Deferred		460513.8	8596474.1	4186.0	-90	0	450.00
	Deferred		461280.0	8596601.0	4502.2	-50	270	250.00
	Deferred		460984.8	8595895.4	4394.0	-55	150	250.00
	Deferred		461370.5	8595895.4	4349.3	-60	270	400.00
	Deferred		460440.7	8596278.2	4189.4	-60	270	230.00
									5720.00	3738.00

Table 1: Drill hole parameters of the FTA NE Area drill program.

I want to talk about the program in terms of what it didfind and what it did notfind; and what it means in terms of the prospectivity of the NE Areaand the prospectivity of the broader Riqueza Project. I preface the following comments by saying that assay results are still outstanding for the final two holes, RDDH029 and RDDH030.

Suite 1/16 Nicholson Road, Subiaco, WA 6008 │PO BOX 38, West Perth, WA 6872

Telephone: [phone] │

Website: www.incaminerals.com.au │ ABN: 36 128 512 907

The western-most cluster of holes (RDDH024, RDDH025, RDDH026, and RDDH029) tested the Puymanpata Porphyry Target (Puymanpata). This drilling intersected a thick sequence a mostly propylitic altered (chlorite-dominant) limestone and andesitic sills. Argillic alteration (sericite) appears localised and is probably related to structure zones (breccias and faults). Pyrite is generally pervasive. Chalcopyrite (copper sulphide) and sphalerite (zinc sulphide) are present but in low levels and in minor intersections.

onlyThe eastern-most pair of holes (RDDH027and RDDH028) tested the Chuje-Pucamachay Porphyry Target (Pucamachay). Like the western drilling, this pair of holes intersected a thick sequence a propylitic altered limestone and andesitic sills, with argillic alteration localised and probably related to structure zones. Like at Puymanpata, pyrite is pervasive; however chalcopyrite and sphalerite levels are lower than at Puymanpata.

We interpret that was intersected as representing the upper and outer zones of the possible hydrothermal intrusive system [possibly porphyry] that is considered too deep for the purposes of exploration and development. Puymanpata is accordingly downgraded.

useWe interpret that was intersected as representing the far upper and outer zones of the possible hydrothermal intrusive system. Pucamachay is accordingly downgraded.

Finally, one hole, RDDH030, was drilled into the Yanacolipa Target (Yanacolipa). Drilling interested the same sequence as that in the previous holes. No chalcopyrite nor interesting sulphide occurrence was intersected. Yanacolipa is accordingly downgraded.

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Yanacolipa

RDDH030

RDDH024

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RDDH025

RDDH028

RDDH026

RDDH029

RDDH027

Puymanpata

Pucamachay/Chuji

Figure 1: NE Area drill hole location plan.

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System

NOTE: NE Area is offset from the Chonta Fault

Non-Incaskarn, epithermal and porphyry deposits/occurrences (yellow)

Epithermal & Porphyry (red) and epithermal, porphyry and skarn (purple) target "centres"

No hole in the program intersected alteration and/or sulphide mineralisation that might be interpreted as being at, or in close proximity to, epithermal, porphyry or skarn mineralisation. Potassic alteration, porphyry-style vein systems and broad occurrences of copper sulphide mineralisation were absent in all drill holes.

onlyOverall, I feel that the NE Area drilling program has adequately tested the targets of this part of Riqueza. It is believed that the relative abundance and distribution of the pyrite in the sequence may be the cause of the geophysical signatures below groundat each target. It is also felt that the metal halos reported in the drill core sample assays may be the cause of the geochemical signatures at surfaceat each target. No further holes are recommended under the FTA. A full review of the drill hole data will be completed and, where appropriate, further holes may be considered as part of the future planned EIAsd drill program.

Whilst the NE Area is downgraded, the remainder of the great Riqueza Project (Riqueza and Riqueza South) remains strongly prospective for large-scale epithermal, skarn and porphyry mineralisation.

How can this be?It is a case of location. The NE Area is off the main northwest-southeast trend, which is defined by the Chonta Fault system, which controls the mineral corridor of the area (Figure 2). Merging the plans contained on slides 9 and 10 from the Noosa Presentation (posted on the ASX on 10 November 2021) I have created a plan that shows the main mineralised trend that crosses the greater project area. The NE Area is offset to the northeast of this trend.

Post Noosa Slide modification

use	Riqueza & Riqueza	Yanacolipa
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South
A large 12km x 5km mineralised system that is
parallel to the NW-SE Chonta Fault System - with	Cuncayoc Copper
NE-SW cross cutting structures forming fertile	Yanaranra
zones of intrusion (and deposit development)	Huasijaja

Figure 2: A PowerPoint presentation slide that morphs the plans of the Noosa Conference presentation (slides 9 and 10) into a single plan. The red oblong area denotes the NW-SE trending mineral corridor along which is distributed the targets that will be tested in phase 2 and

For	phase 3 drilling programs. The NE Area, recently drilled, is off this trend.

The NW-SE trending mineral corridor at Riqueza is book-ended by the copper-molybdenum Kenita skarn occurrence (formerly wned by BHP) to the NW, and the Huancullo copper-goldhigh-sulphidation and copper-gold porphyry occurrences, to the SE (partly owned by Anglo American). A new slide (Figure 2) shows the distribution of mineralised prospects at Riqueza and Riqueza South. Slide number 12 from the Noosa conference shows the relatively small part of Riqueza tested by the NE Area

drill program (Figure 3).

A total of 13 large-scale drill targets remain at Riqueza. It is expected that additional targets will be generated as mapping and sampling resumes in the Riqueza South area in 2022.

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Greater Riqueza Regional Cross Section

15km

Anglo's	Riqueza South	Riqueza	BHP's
		Cu-Mo
epithermal
		Skarn
and

only	porphyry	Cerro Vicuña	Alteration Ridge
deposits		Pampa Corral
		Colina Roja
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	Epithermal and porphyry targets	Epithermal,
			porphyry and skarn
			targets
Figure 3: Slide 12 from the Noosa conference. In terms of cross section coverage, the NE Area drill program has tested a small part of the
personal		mineralised system at greater Riqueza, as indicated by a yellow box.

The 2021-2023 Drilling Strategy of Riqueza

The broader strategy of drilling at the greater Riqueza Project is worth reiterating. We started with a category-1 FTA permit to commence phase-1 drilling at Riqueza. FTA permits have the shortest lead time to granting, allowing drilling to start expeditiously. Upon granting of the FTA, the Company commenced the process of acquiring a category-2 DIA drill permit for phase-2 drilling to cover the central and SW parts of Riqueza. DIA's are more complicated to obtain than an FTA. The Company has already lodged this DIA drill permit for nine targets located in the central and southwest parts of Riqueza (ASX announcement dated 1 November 2021). Phase-2 drilling is expected to commence in early-mid 2022. The Company will commence the process of acquiring a category-3 EIAsd drill permit for phase-3 drilling to cover all of Riqueza, now to include Riqueza South.

This strategy is designed to achieve complete drill target coverage with minimised "down time" between campaigns with increased drill program capacity. The number of platforms allowed under an FTA is <20. The number of platforms allowed under a DIA is <40. The number of platforms allowed under a EIAsd is <600. By this you can see that drilling capacity greatly expands as we work through each drill permit category. The final EIAsd permit will cover the entire greater Riqueza project area, to capture deferred holes or possible new holes derived from prior FTA and DIA reviews.

ForThis illustrates a long-term commitment to the Riqueza Project that is not subject to the vicissitudes of drilling. We test, we upgrade or downgrade, we move on. Not a hole too few - not a hole too many.

Multiple Programs at Frewena

As previously announced, the Company is conducting a large AMAGRAD survey at Frewena, to cover the relatively new parts of the project area (Frewena Frontier, the south-eastern parts of Frewena East, and the most southern parts of Frewena Far East). This survey is now 75% complete. It is expected to be completed in approximately two weeks.

The Company had previous broadcast its intension to drill "as soon as possible" at Frewena (Mount Lamb), by that, meaning possibly by the end of the year. For several reasons, explained in some detail below, drilling will not occur before the end of the year. Above all else, it has taken considerable time to contact the landowner to get agreement for the Company to enter onto the land, and undertake ground disturbing activities, as is required by the MMP.

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Other factors that have contributed to the forecast delay in commencing the planned drilling at Frewena, include, but are not limited to:

• Our decision to sub-contract the landowner to put in the access tracks because of the cost efficiencies and to ensure

only	that any ground disturbing activities are undertaken to a standard the landowner requires for his property;

• The need for the Company to establish a sound and good relationship with the landowner from the outset, given the long time that we expect to be onsite conducting drilling and other exploration activities; and

• The fact that whilst in principle agreement has now been reached with the landowner to progress these matters, he has subsequently returned to his WA properties where he is difficult to contact to finalise these operational commitments.

Whilst this is frustrating and has resulted in unexpected delays, the Company is of the view that it is critical to establish a robust working relationship with the landowner from the outset. The time lost now in ensuring this outcome will no doubt be recovered once we start drilling in early 2022.

useThe plan remains to drill as soon as possible, but access building by the landowner on the Company's behalf (explained immediately above) and the weather remain influencing factors in this.

It is the intention of the Company to commence phase -1 drilling in the greater Mount Lamb area (Figure 4) as soon as possible. The Mount Lamb area hosts seven targets that are prospective for sedimentary exhalative (SEDEX) and, to a lesser extent, iron oxide, copper, and gold (IOCG) mineralisation.

Outside our control but very much imminent are two pending matters worth highlighting. The government will soon release
the assay data of NDIBK04. This is important to Inca shareholders because Inca has lodged an application (ELA32808) over
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NDIBK04 and NDIBK01. The government will soon also announce which of the two competing applications will be approved
for granting.
		Target	Mount Lamb
		Desert Creek
		NE Mount	Area
		Lamb Target	Hosts 7 Tier-1 scale targets
		NDIBK04
		with SEDEX [IOCG] potential
		Block now
		under EL	Targets occur over a 18km
		application
			strike length
			13 drill holes are planned
		Plains Target	✓ MMP now granted
		12
		✓ Drillers to mobilise as
		SW Mount	soon as possible
		Lamb Target
Figure 4: Slide 16 from the Noosa conference. The Mount Lamb area hosts seven large-scale targets of which six are arranged along a 18km
		long magnetic and gravity high corridor.
ForAMAGRAD Completed at Jean Elson

This large AMAGRAD survey is now complete. Data modelling, targeting and a final interpretation will take a considerable amount of time, but ultimately depends on the number of targets generated. We anticipate that a final report will be available sometime in March 2022 with interim results possible along the way.

AMAGRAD and IP at MaCauley Creek

Two programs were planned for MaCauley Creek following the better-than-expected mapping and sampling results (ASX announcement dated 20 September 2021). An AMAGRAD survey was planned to cover the northern and southeast parts of the project area. Due to COVID-related state border controls survey staff and equipment could not leave Victoria (and enter Queensland). The planned IP survey went ahead.

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