CDPR closes first tranche of $1.8M equity financing, provides Tailings update on Land Easement Application Process for Quiulacocha
CDPR closes first tranche of $1.8M equity financing, provides Tailings
update on Land Easement Application Process
for Quiulacocha
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
MONTRÉAL, QUÉBEC, CANADA — (November 20, 2023) Cerro de Pasco Resources Inc.
(CSE:CDPR) (OTCPK: GPPRF) (FRA: N8HP) (“CDPR” or the “Company”) has closed a first Tranche
of its previously announced non -brokered private placement, for total aggregate gross
proceeds of $ 1,772,000 (the "Offering").
CDPR also confirms that it is currently addressing final requirements in relation to a two -year
Legal Easement (“Easement”), providing access to the surface areas corresponding to CDPR’s
El Metalurgista Concession and the Quiulacocha Tailings Project (“QT Project”). The Easement,
enabling the Company to perform confirmatory exploration via a 40-hole sonic drilling program,
is expected to be passed by Supreme Resolution in December 2023.
Easement Process
The Easement process was initiated by CDPR on 25 August 2022 with the authority and
guidance of the General Mining Bureau (“DGM”), the organic unit within the Ministry of Energy
and Mines (“MINEM”) responsible for formulating technical standards and issuing opinions
related to mining permits and authorizations. Audiences were held between CDPR and Activos
Mineros SAC (“AMSAC”), as further described below, who control surface rights over the entire
QT Project area. Having confirmed AMSAC’s rejection of a voluntary land easement, DGM
endorsed the initiation of a Legal (or “Forced”) Easement process.
The process recognizes that CDPR owns an irrevocable and indefinite right to explore and
exploit the El Metalurgista concession, covering the Quiulacocha Tailings.
Easement Approvals
Approvals were obtained from four ministries including 1. Energy and Mines, 2. Environment, 3.
Housing and Construction, and 4. Agriculture. With the file complete, CDPR had expected DGM
to draft a Supreme Resolution granting the Legal Easement in August, for signature by the
MINEM Minister and the President of the Republic in September 2023.
Delays
However, delays have been incurred as a result of two separate and consecutive appeals by
AMSAC. The first was reviewed by the independent Mining Council, and duly resolved by DGM.
The second, filed on 19 September 2023 and likewise relating to formal matters is currently in
process, due to be assessed by the Mining Council on November 30 th, following which the
Council is expected to issue a definitive ruling in favor of the Easement.
Timeline
As a result of delays caused by the AMSAC’s appeals, the Supreme Resolution is now expected
to be submitted for signature in December.
During the Peruvian rain season, constant rain condition makes the drilling process difficult. It
is, however, possible to drill in the rain, granted conditions allowing for safe and quality execu-
tion of the drilling campaign.
A further contributing factor relates to anomalous weather patterns this year with the Niño
phenomenon raising the possibility of increased precipitation during the rainy season. As a re-
sult, CDPR expect s to begin Geophysics and Tomography studies before the end of the year,
and also to begin the QT-Drilling-Program as soon as weather conditions allow.
In accordance with the new timeline, CDPR expects to complete the 40 -hole drilling program
and the first phase of the QT preliminary economic assessment (PEA) by Q2 of 2024 and
immediately begin the preparation of a technical report on Mineral Resources compliant with
NI 43 -101 (as defined herein ) for the Quiulacocha tailings within our “El Metalurgista”
concession.
Guy Goulet, CEO of Cerro De Pasco Resources, “ The AMSAC appeals are, of course, beyond our
control. This process has been lengthy, but Forced Easements are rare and have only occurred
five times in the past. We respect the formalities of the country and recognize the diligence of
those authorities who continue to help us to find a way to break the deadlock and move ahead.
The easement will pave the way to rapid development of QT Project. It is a project that is fully
supported by the local community and is of critical importance to Cerro de Pasco. It brings
innovation, health and environmental benefits, and much -needed revival to the local economy.
I am confident that we will achieve the objective of drilling the entire QT resource and obtain
permits to start production within a reasonable timeframe.”
Terms of the Easement
CDPR will pay AMSAC approximately US$1 million (3.7M soles) for the Easement and will be
permitted to access and perform drilling inside its own concession area over a period of up to
two years, providing access to the surface areas corresponding to CDPR’s El Metalurgista
Concession and the QT Project. The Easement will enable the Company to perform
confirmatory exploration via a 40-hole sonic drilling program.
Private Placement
Under the First tranche of its private placement, CDPR issued 17,720,000 units of the Company
("Units") at a price of $0.10 per Unit. Each Unit is comprised of one common share in the capital
of the Company (a "Common Share") and half of one unit purchase warrant (a "Warrant"). Each
whole Warrant entitles the holder thereof to purchase one additional unit (each a “Warrant
Unit”) at a price of $0.15 per Warrant Unit until the earlier of the date which is 24 months after
its issuance and, if applicable, the Accelerated Expiry Date (as defined hereinafter) (the “Expiry
Date”). Each Warrant Unit will consist of (i) one additional Common Share and (ii) one addi-
tional transferable Common Share purchase warrant (the “Underlying Warrants”). Each Under-
lying Warrant will entitle the holder thereof to acquire one additional Common Share (the “Un-
derlying Warrant Shares”) at a price of $0.25 per Underlying Warrant Share until the Expiry
Date.
In the event that, during the period following 24 months from the closing date of the Offering,
the volume-weighted average trading price of the Common Shares exceeds $0.60 per Common
Share for any period of 20 consecutive trading days, the Corporation may, at its option, follow-
ing such 20 -day period, accelerate the expiry date of the Warrants by delivery of notice to the
registered holders (an "Acceleration Notice") thereof and issuing a press release (a "Warrant
Acceleration Press Release", and, in such case, the expiry date of the Warrants and the Underly-
ing Warrants, as applicable, shall be deemed to be 5:00 p.m. (Montreal time) on the 30th day
following the later of (i) the date on which the Acceleration Notice is sent to Warrant holders,
and (ii) the date of issuance of the Warrant Acceleration Press Release (the “Accelerated Expiry
Date”).
In connection with the Offering, the Corporation paid an amount of $10,400 and issued 104,000
Warrants to arm’s length third parties as finder’s fees.
The Corporation intends to use the net proceeds from the Offering towards the development of
the Quiulacocha tailings and for working capital.
All securities issued in connection with the Offering will be subject to a four -month-and-one-
day statutory hold period in accordance with applicable securities laws.
The securities offered have not been, and will not be, registered under the United States Securi-
ties Act of 1933, as amended, (the “U.S. Securities Act”) or any U.S. state securities laws, and
may not be offered or sold in the United States or to, or for the account or benefit of, United
States persons absent registration or any applicable exemption from the registration require-
ments of the U.S. Securities Act and applicable U.S. state securities laws. This news release does
not constitute an offer to sell or the solicitation of any offer to buy securities in the United
States, nor in any other jurisdiction.
Exploration program
The program will include geophysical studies, laboratory testing, minerology testing, resource
estimation and economic assessment, in collaboration with Glencore International AG and
Volcan Compania Minera (see press release dated March 21, 2023), with the objective of filing a
technical report compliant with NI 43-101.
Activos Mineros SAC (“AMSAC”)
Activos Mineros SAC (“AMSAC”) is a state -owned entity formed in 2006, originally mandated to
carry out closure and remediation of state environmental liabilities stemming primarily from
the privatization of Centromin, the state mining company, in 1994.
The Quiulacocha Tailings
The Quiulacocha tailings deposit (4,300 masl) covers approximately 115 hectares with tailings
deposited in the Quiulacocha Tailings Storage Facility (TSF) from the early 1920´s to 1992. The
tailings stored in the TSF, comprised of processing residues, come from the Cerro de Pasco
open pit and underground mine. The main period of tailings deposition at Quiulacocha came
after 1943 when the Paragsha plant was put into commission, first treating Cu ore and later
processing Zn -Pb-Ag ore. According to historical records, the Cerro de Pasco mine processed
approximately 58.3 Mt of Zn -Pb-Ag ore between 1952 to 1992 from the open pit and
underground workings with average historical grades of 8.6% Zn, 3.3% Pb and 98 g/t Ag.
The most recent Historical Mineral Resource Estimate for the Quiulacocha tailings , prepared by
BO Consulting in 2012, reported 2.9 Mt at 1.43% Zn, 0.79 % Pb, 43.1 g/t Ag, and 0.04% Cu. This
estimate was based on a shallow surface auger sampling program which was estimated to
represent only 4% of the expected tonnes of the deposit.
This Historical Resource Estimate is detailed and discussed in the technical report titled “The
Excelsior Mineral Pile (EMP) and Quiulacocha Tailings (QT) associated with the Cerro de Pasco
Mine, Cerro de Pasco District, Altiplano Region, North -Central Peru” filed on July 26, 2018. They
are treated as historic information and have not been verified for economic evaluation by the
Company. These are considered Historical Mineral Resources and do not refer to any category of
sections 1.2 and 1.3 of the Canadian Securities Administrators ’ National Instrument 43 -101 –
Standards of Disclosure for Mineral Projects ("NI 43 -101") such as Mineral Resources or Mineral
Reserves as stated in the 2010 CIM Definition Standards on Mineral Resources and Mineral
Reserves. A Qualified Person (within the meaning of NI 43 -101) has not done sufficient work to
classify the historical estimate as current Mineral Resources or Mineral Reserves. The
explanation lies in the inability by the Qualified Person to fully verify the data acquired by the
various historical drilling campaigns and other sampling works. Further drilling would be
required to upgrade or verify the historical resources. However, the Qualified Person has read
the documents pertaining to historical evaluation of the Mineral Resources and is of the opinion
that they need to be updated to fully conform to the NI 43-101 or CIM norms.
Background
CDPR is the titleholder of the concession located in Peru called “El Metalurgista” (“the
Concession”), which grants it the right to explore and exploit the Quiulacocha Tailings located
within its assigned area. The enforceability of these rights has been formally confirmed by the
General Mining Bureau of Peruvian Ministry of Energy and Mines.
CDPR has obtained most of the certifications and authorizations required to start exploration
activities at the Concession, including an environmental certification (“DIA”), and an agreement
with the Quiulacocha Community providing certain surface rights. The Company is fully
committed to applying the highest standards in community relations and endorses guidelines
set out by the International Organization for Standardization (ISO), in its 26000:2010 Standard
that defines Corporate Social Responsibility.
Technical Information
Mr. Jorge Lozano, MMSAQP and Chief Operating Officer for CDPR, has reviewed and approved
the scientific and technical information contained in this news release. Mr. Lozano is a Qualified
Person for the purposes of reporting in compliance with NI 43-101.
About Cerro de Pasco Resources
Cerro de Pasco Resources Inc. is a mining and resource management company with
unparalleled knowledge of the mineral endowment in the city of Cerro de Pasco and its
surroundings. Initially, the Company will unlock the useful life of the mine and extend the
concession areas in its Santander mining operation, applying the highest safety, environmental,
social and governance standards. The key focus of the growth for the Company is on the
development of the El Metalurgista mining concession, one of the world's largest surface
mineralized resources, applying the latest techniques and innovative solutions to process
tailings, extract metals and convert the remaining waste into green hydrogen and derivatives.
Forward-Looking Statements and Disclaimer
Certain information contained herein may constitute “forward -looking information” under
Canadian securities legislation. Generally, forward -looking information can be identified using
forward-looking terminology such as “plans”, “seeks”, “expects”, “estimates”, “intends”,
“anticipates”, “believes”, “could”, “might”, “likely” or variations of such words, or statements
that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “will be taken”,
“occur”, “be achieved” or other similar expressions. Forward -looking statements, including the
expectations of CDPR’s management regarding the anticipated use of the proceeds raised
under the Offering, the signature of a definitive ruling in favor of the Easement , the terms of
such Easement and the timing of such signature, the projected timeline of the exploration
program described herein , the commencement of the first phase of the QT PEA and of the
preparation of a report compliant with NI 43-101, are based on CDPR’s estimates and are
subject to known and unknown risks, uncertainties and other factors that may cause the actual
results, level of activity, performance or achievements of CDPR to be materially different from
those expressed or implied by such forward-looking statements or forward-looking information.
Forward-looking statements are subject to business and economic factors and uncertainties
and other factors that could cause actual results to differ materially from these forward -looking
statements, including the risks associated with exploration, development and mining activities;
the impact of macroeconomic events, and any material adverse effect on the business,
properties and assets of CDPR, as well as the relevant assumptions and risks factors set out in
CDPR’s public documents, available on SEDAR+ at www.sedarplus.ca. There can be no
assurance that such statements will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements. Although CDPR believes that
the assumptions and factors used in preparing the forward -looking statements are reasonable,
undue reliance should not be placed on these statements and forward -looking information.
Except where required by applicable law, CDPR disclaims any intention or obligation to update
or revise any forward-looking statement, whether as a result of new information, future events
or otherwise.
Further Information
Guy Goulet, CEO
Telephone: +1-579-476-7000 Mobile: +1-514-294-7000