Mr. Edward Kelly reports

INCA ONE CLOSES FIRST TRANCHE OF PRIVATE PLACEMENT AND RATIFIES DEBT SETTLEMENT

Further to the news release dated Aug. 16, 2016, Inca One Gold Corp. has closed the first tranche of its previously announced (July 8, 2016) non-brokered private placement for gross proceeds of $3.25-million by the issuance of 13.0 million units at a subscription price of 25 cents per unit. Each unit is composed of one common share and one full transferable common share purchase warrant. Each warrant will be exercisable to purchase an additional common share of the issuer at an exercise price of 40 cents for a period of 36 months from the closing date and will feature an acceleration clause triggering the exercise of the warrant upon select share price metrics being achieved. The company also intends to close the final tranche of the private placement shortly.

Insiders of the company have subscribed for 2.9 million units under the private placement. The issuance of units to insiders pursuant to the private placement will be considered to be a related-party transaction within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101. The company intends to rely on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5 (a) and 5.7 (1) (a) of MI 61-101 in respect of any insider participation.

Cash finders' fees of 8 per cent of the gross proceeds were paid on a portion of the private placement. The company will also issue 8-per-cent finders' warrants to eligible finders in connection with this placement. The net proceeds from the private placement will be used for purchases of mineral, inventory supplies and materials, select debt repayments, and for general working capital purposes, as applicable. All securities issued pursuant to the private placement are subject to a statutory hold period of four months plus one day from the date of issuance, in accordance with applicable securities legislation.

Debt restructuring and settlement

In addition, the company is also pleased to announce that it has received approval by the TSX Venture Exchange for the required settlement agreements with its debtholders as previously announced in the press releases dated April 19, 2016, and July 8, 2016.

The debt settlement addresses $13.7-million of the company's long- and short-term debt and related unpaid interest, which converted as follows: (i) $8.0-million was settled into 20.3 million common shares plus 9.2 million warrants, of which 6.9 million common shares plus 5.9 million warrants were settled to insiders; (ii) $3.8-million was settled into interest-bearing debenture agreements with deferred payment terms or non-interest-bearing repayment notes; (iii) $1.8-million was settled into a combination of warrant deposits and contingent debt; and (iv) 1.1 million warrants were issued to select parties relating to the warrant deposit and certain other settlement requirements. In total, 20.3 million common shares and 10.3 million common share purchase warrants, of which 9.1 million have a three-year term and a 40-cent exercise price, 300,000 have a 12-month term and a 45-cent exercise price, and 800,000 have a three-year term and an 85-cent exercise price, were issued on settlement of these debts.

The restructuring will not result in the creation of a new control person, but will result in the creation of a new insider.

About Inca One

Inca One is a Canadian-based mineral processing company with a gold milling facility in Peru, servicing government-permitted, small-scale miners. As part of the terms of the original purchase agreement for the Chala, Peru, processing facility, Inca One has an agreement between its wholly owned subsidiary, Chala One SAC, and the seller and initial permit applicant, to operate under the umbrella of formalization until the successful completion of all the environmental and operating permits.

We seek Safe Harbor.