Cerro de Pasco Resources to Acquire Trevali’s Santander Mine
CSE:CDPR
Cerro de Pasco Resources to Acquire Trevali’s Santander Mine
MONTREAL, QUÉBEC , CANADA — (November 8, 20 21) Cerro de Pasco Resources Inc. (CSE:CDPR)
(Frankfurt: N8HP) (“CDPR,” or the “Company“) is very pleased to announce that the Company has entered
into a share purchase agreement (the "Agreement") with Trevali Mining Corporation ("Trevali") (TSX: TV)
(BVL: TV) (OTCQX: TREVF) (Frankfurt: 4TI), pursuant to which it will acquire Trevali’s Santander Mine (the
"Transaction"), located approximately 215 kilometres northeast of Lima, Peru and comprising an
underground mine, a 2,000 -tonne-per-day processing mill, a conventional sulphide flotation mill, and
associated infrastructure.
The Santander Mine
The Santander M ine consists of the currently operational and fully permitted polymetallic Magistral
underground mine, a concentrator plant and tailings facilities within a very prospective mining and
exploration concession covering 44 square km. Trevali Guidance for 2021 Santander operations indicates
the mine will produce approximately 50-55Mlb of payable zinc, 4Mlbs of payable lead and 282-297koz of
payable silver per year at an All-in Sustaining Costs of USD1.08-1.14 per payable pound of zinc produced.
Transaction Rationale
• Profitable mine with potential to grow operating cash flow and significant exploration upside;
• Steady state, fully permitted operation with stable workforce and good community relations;
• A modern 2,000 tonne per day concentrator which could be used ultimately for treating material
from our El Metalurgista concession, located only 60 km away from the Santander Mine;
• Significant tailings resource which can be retreated at the end of the life of mine;
• CDPR plans to develop the Santander Pipe orebody by linking the existing underground mine,
increasing payable zinc equivalent metal and reducing All-in Sustaining Costs after two years;
• Closing Date Working Capital will remain positive and intact at USD7.5million.
Guy Goulet, CEO of CDPR commented: "The acquisition of this profitable mine will be transformational for
CDPR with material potential to grow operating cashflow and significant exploration upside. Furthermore,
the proximity to CDPR’s El Metalurgista concession provides the Company potential to utilize Santander
infrastructure for future development.”
The Company plans to extend the operating life of the Magistral orebody, while developing access into
the higher-grade Santander Pipe orebody over the next 24-36 months, which would extend the life of the
mine by five years. Additionally, CDPR plans to increase exploration expenditure on the property.
Mineral Resources
Mineral Resource Estimates filed by Trevali for the Santander Mine effective December 31, 2020 are
shown below:
Santander Mine Mineral Resources as at December 31, 2020 (1,2,3,4)
Santander Mine (3)
Grade Metal
Quantity Zn Pb Ag Zn Pb Ag
Mt % % g/t M lbs M lbs K oz
Measured 1.41 4.47 0.67 33.26 139 21 1,508
Indicated 1.29 4.87 0.29 18.94 139 8 786
Measured & Indicated 2.71 4.66 0.49 26.42 278 29 2,302
Inferred 1.16 4.01 0.21 21.69 103 5 809
Santander Pipe Project (4)
Grade Metal
Quantity Zn Pb Ag Zn Pb Ag
Mt % % g/t M lbs M lbs K oz
Measured 0.53 7.78 0.03 16.76 91 - 286
Indicated 2.95 6.38 0.01 11.62 415 1 1,102
Measured & Indicated 3.48 6.59 0.02 12.41 506 2 1,388
Inferred 0.93 5.15 0.01 7.54 106 - 225
Notes:
1) All Mineral Resources have been estimated in accordance with the CIM Definition Standards. Mineral
Resources that are not Mineral Reserves do not have demonstrated economic viability. Numbers may
not add up due to rounding.
2) The technical report entitled “Mineral Reserve Estima tion Technical Report for the Santander Zinc
Mine, Province de Huaral, Perú” dated March 31, 2017, is the current technical report for the
Santander property.
3) The Santander Magistral Underground Mine Mineral Resource estimate is reported based on net
smelter return cut-off grade of US$40/tonne with metal prices of: US$1.15/lb zinc, US$0.90/lb lead,
US$25.15/oz silver. The Santander Magistral Underground Mine Mineral Resource estimate has been
prepared by the mine geology department and non -independent Resource geology consultants to
Trevali Mining Corporation with an effective date of December 31, 2020 under the supervision of and
approved by Yan Bourassa (P.Geo.), a Qualified Person as defined in NI 43 -101 and Vice President,
Exploration & Mineral Resources of Trevali.
4) The Santander Pipe Underground Deposit Mineral Resource estimate is reported based on net smelter
return cut -off grade of US$40/tonne with metal prices of: US$1.15/lb zinc, US$0.90/lb lead,
US$25.15/oz silver. The Santander Pipe Underground D eposit Mineral Resource estimate has been
prepared by the exploration geology department and non-independent Resource geology consultants
to Trevali with an effective date of December 31, 2020, under the supervision of and approved by Yan
Bourassa (P.Geo.), a Qualified Person as defined in NI 43-101 and Vice President Technical Services of
the Company and accordingly, is not independent to Trevali.
Transaction Highlights
• CAD1 million cash to be paid at closing,
• 10 million shares of CDPR, to be issued subject to the following conditions:
o 5,000,000 first tranche of shares to be freely tradable at closing, and
o 5,000,000 second tranche of shares to be released from escrow 18 months following
closing
• A Net Smelter Royalty equal to 1% on all new deposits beyond those resources currently defined
at the Magistral and Santander Pipe deposits.
• A contingent payment of up to US D2.5 million in the event that the LME average zinc price for
2022 is equal to or greater than USD1.30/lb.
• The Transaction is subject to customary closing conditions and is expected to close in Q4 2021.
Geology
Santander is located within the Miocene metallogenic belt of central and northern Perú. It extends for at
least 900 km along the Western Cordillera and adjacent Altiplano and is characterized by several
hydrothermal mineral deposits of significant importance of different types that formed between about 6
million and 20 million years ago.
Santander hosts intrusion -related, carbonate -hosted, distal ‘passive’ replacement deposits, or carbon
replacement deposits (CRDs). Controls on mineralization vary, however, with the majority of
mineralization displaying very strong structural and lithological controls. The Santander CRDs, in common
with those in other districts, displays a strong mineralogic/metallic zonation: a ‘classic’ lateral or vertical
zonation (from distal to proximal) would be Mn » Ag » Pb+Ag » Zn » Cu+Au. Santander is underlain by an
approximately 2,600-metre thick package of Cretaceous clastic and carbonate sedimentary r ocks known
as the Goyllarisquisga Group, within which an approximately 1,000 -metre thick sequence of massive
limestones and limestone-shales of the Jumasha and Chulec Formations are the principal hosts identified
to date. Pre -mineralization diabase dykes a nd sills are locally present within the section. The entire
sequence is tightly folded into a series of orogen -parallel, northwest-trending anticlines and synclines.
The lower, predominantly clastic part of the section has been thrust over the mainly carbonate-rich upper
portion (the favourable host rocks) along the regional northwest -trending Santander Fault Zone.
Unconformably overlying the tightly folded Cretaceous sediments are moderately folded and faulted
andesitic Tertiary volcanics of the Calipuy Formation. Syn-mineralization intrusive activity, considered to
be the heat and fluid sources that produced base metal mineralization, has not been recognized on the
property to date. This absence is empirically considered indicative of a relatively large CR D system, and
such bodies are inferred to be present at depth (>800 metres) on the property.
Advisors
Sprott Capital Partners LP is acting as financial advisor to CDPR.
Technical Information
Mr. Shane Whitty has reviewed and approved the scientific and technical information regarding the
technical information contained in this news release. Mr. Whitty is a Qualified Person within the meaning
of the NI 43-101 and is also the Vice President, Exploration and Technical services for CDPR.
About Cerro de Pasco Resources Inc.
Cerro de Pasco Resources Inc. is a resource management company attuned to the most demanding
environmental, social and legal compliance required by global institutions and investors. The key strategic
strength of the Corporation is an unparalleled knowledge of the challenges and opportunities presented
by the mineral endowment within the city of Cerro de Pasco combined with a highly experienced and
practical team of both Peruvian and international management. The key focus of the Corporation will be
on developing the El Metalurgista mining concession using advanced geo-resource and industrial
development solutions in order to secure long-term economic operational sustainability in harmony with
a healthy and prosperous local population.
Forward-Looking Statements and Disclaimer
Certain information contained herein may constitute “forward-looking information” or “forward-looking
statements” under Canadian securities legislation. Generally, forward -looking information can be
identified by words such as "pro forma", "plans", "expect s", "may", "should", "could", "will", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", "believes", or variations including negative
variations thereof of such words and phrases that refer to certain actions, events or results that
may, occur or be taken or achieved. Such forward -looking statements, including but not limited to
statements relating to: the ability of the parties to satisfy the conditions precedent to the Transaction; the
anticipated closing, timing, benefits and effe cts of the Transaction; and expected development and
operations, involve risks, uncertainties and other factors which may cause the actual results to be
materially different from those expressed or implied by such forward -looking statements or forward -
looking information. Such factors include, among others, the exercise of any termination rights under the
Agreement, inability of the parties to satisfy or waive in a timely manner the conditions to the closing of
the Transaction, inability of the Company to r ealize the benefits of the Transaction, risks related to the
exploration, development and mining operations; impacts of macroeconomic developments as well as
the impact of the COVID -19 pandemic; and any material adverse effect on the business, properties and
assets of the Company. 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.
Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking
information. The Company will not update any forward -looking statements or forward -looking
information that are incorporated by reference herein, except as required by applicable securities laws.
Contact Information
Cerro de Pasco Resources Inc.
Guy Goulet, President and CEO
Tel.: 579 476-7000
Email: [email protected]