ERIC SPROTT ACQUIRES A SUBSTANTIAL STAKE IN CERRO DE PASCO RESOURCES
Cerro de Pasco Resources Inc. has closed its previously announced non-brokered private placement, for total aggregate gross proceeds of $3,298,000. Cerro de Pasco issued 32,980,000 units of the corporation at a price of 10 cents per unit, each consisting of one common share and one common share purchase warrant. Each warrant entitles its holder to purchase one common share at an exercise price of 15 cents per common share for a period of 24 months, subject to acceleration in certain circumstances (see news release dated June 27, 2024, for details).
Eric Sprott, a new insider of the corporation, acquired 20 million units under the offering through 2176423 Ontario Ltd., a corporation beneficially owned by him. 2176423 Ontario also acquired 17 million common shares from an existing shareholder of the corporation through a share purchase agreement. Mr. Sprott now beneficially owns or controls 37 million common shares and 20 million warrants, representing approximately 9 per cent of the outstanding common shares on a non-diluted basis and 13.3 per cent on a partially diluted basis assuming the exercise of such warrants.
These securities were acquired by Mr. Sprott for investment purposes. Mr. Sprott has a long-term view of the investment, and may increase or decrease his beneficial ownership of or control over the corporation’s securities in the future, whether in the open market, by privately negotiated agreements or otherwise, subject to a number of factors, including general market conditions and business opportunities.
Guy Goulet, chief executive officer of Cerro de Pasco, commented: “We are pleased to close this critical funding round and in parallel delighted to welcome Mr. Sprott as an investor into Cerro de Pasco Resources. We look forward to moving ahead with drilling activities at the Quiulacocha tailings project in late July, with the objective of producing a master plan for reprocessing the entire Quiulacocha tailings resource.”
A copy of the early warning report with respect to the foregoing will appear on Cerro de Pasco’s profile on SEDAR+ and may also be obtained by calling Mr. Sprott’s office at 416-945-3294 (2176423 Ontario, 1106 7 King St. East, Toronto, Ont., M5C 3C5).
The net proceeds from the offering will be used for drilling and general working capital.
All securities issued in connection with the offering are subject to a statutory hold period ending four months and one day from the date of their issuance, in accordance with applicable securities laws.
The Quiulacocha tailings
Cerro de Pasco is the titleholder of the concession located in Peru called El Metalurgista, 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.
The Quiulacocha tailings storage facility covers approximately 115 hectares and is estimated to hold approximately 75 million tonnes of material processed from the 1920s to 1990s.
The Quiulacocha tailings storage facility comprises processing residues that came from the Cerro de Pasco open-pit and underground mine. Noteworthy reports indicate an estimated 458 million ounces of silver equivalent across silver, zinc, copper, lead and gold within the tailings. There is also evidence of additional valuable metals such as germanium, tellurium, indium and gallium; this resource has not been confirmed yet.
Initially, these tailings resulted from the mining of 16 million plus tonnes of copper-silver-gold mineralization with reported historical grades of up to 10 per cent copper, four grams per tonne gold and over 300 grams per tonne silver, and later from the mining of 58 million plus tonnes of zinc-lead-silver-mineralized material with average historical grades of 7.41 per cent Zn, 2.77 per cent Pb and 90.33 g/t Ag.
With minimal mining costs due to surface-level material and current reprocessing capacity at adjacent plants, Cerro de Pasco’s Quiulacocha project stands out as one of Peru’s key mining initiatives. This endeavour not only promises economic benefits but also aims to restore the environment and create employment opportunities, aligning with the local community’s needs.
Technical information
Jorge Lozano, MMSAQP, chief operating officer for Cerro de Pasco, 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 National Instrument 43-101 — Standards of Disclosure for Mineral Projects.
About Cerro de Pasco Resources Inc.
Cerro de Pasco Resources is a mining company, with the goal to become the next mid-tier producer in Peru. Cerro de Pasco is focused on the development of its principal 100-per-cent-owned asset, the El Metalurgista mining concession, comprising mineral tailings and stockpiles extracted from the Cerro de Pasco open-pit mine in central Peru. The corporation’s approach at El Metalurgista entails the reprocessing and environmental remediation of mining waste, and the creation of numerous opportunities in a circular economy.