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News & Media

Cerro De Pasco Resources Files Preliminary Economic Assessment for the Santander Pipe Project

MONTRÉAL, CANADA – (April 11, 2023) Cerro de Pasco Resources Inc. (CSR: CDPR) (OTCMKTS: GPPRF) (Frankfurt: N8HP) (“CDPR” or the “Company”) announces it has filed on SEDAR an independent Preliminary Economic Assessment (“PEA”) for its brownfield Pipe Project (“the Project” or “the Santander Pipe”). The Project forms a strategic cornerstone for CDPR’s 100% owned Santander Mine, located in central Peru.  The PEA report is entitled “NI 43-101 Technical Report Cerro de Pasco Resources Preliminary Economic Assessment Santander Pipe Deposit, Huaral, Lima, Peru”, dated April 11th, 2023 (effective date January 31st, 2023) and was prepared by DRA Global, an international mining consultancy, in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”).

Highlights of the PEA are tabled below, with additional details of the NI 43-101 Technical Report filed on www.sedar.com under CDPR´s profile and on the Company's website at www.pascoresources.com.

Table 1. PEA Highlights

  Unit   TOTAL 
Throughput Rate (tonne-per-day processed) tpd 2,500
Estimated Production Period years 5
Tonnes Processed Million tonnes 3.85
Head Grade Zn % 4.67
Metallurgical Recovery Zn % 89.0
Head Grade Cu % 0.11
Metallurgical Recovery Cu % 70
Zn Concentrate Production Thousand tonnes 313.6
Cu Concentrate Production Thousand tonnes 13.8
Revenues (less by product cost)(1) MUSD 388.6
Total OPEX MUSD 182.14
Initial + Sustaining CAPEX MUSD 67.96
EBITDA MUSD 167.6
Pre-Tax Free Cash Flow (FCF) MUSD 99.6
Operating Cost ($/t processed) $/t 47.35
Total Cash Cost C1(2) ($/lb Zn) $/lb 0.82
All-In Sustaining Cost(2) (“AISC”)1 ($/lb Zn) $/lb 1.05
Pre -Tax - Net Present Value (6%) MUSD 71.3
Pre-Tax Internal Rate of Return % 46.6
After-Tax - Net Present Value (6%) MUSD 31.2
After-Tax Internal Rate of Return % 25.1
After-Tax Payback years 2.6
 

(1) Long-term metal price assumptions are: US$2,800/t of Zn, US$1,820/t of Pb, US$9,002/t of Cu, and US$22.0/oz of Ag

(2)Total cash cost C1 and AISC are non-GAAP measures; these parameters were estimated by CDPR in accordance with its cost structure, the remaining parameters in the table come directly from the PEA Financial Model prepared by DRA.

Table 2. Project Economics Sensitivity to Zinc Price

  % of Zn Price 80% 85% 90% 100%(1) 110% 115% 120%
  US$/t Zn 2,240 2,380 2,520 2,800 3,080 3,220 3,360
Pre-Tax NPV 6% (MUSD) 9.9 25.3 40.6 71.3 102.1 117.5 132.9
NPV 8% (MUSD) 6.5 20.8 35.1 63.7 92.4 106.7 121.1
IRR (%) 12.6 22.0 30.7 46.6 61.2 68.2 75.0
After-Tax NPV6% (MUSD) -10.4 0.1 10.5 31.2 51.7 61.6 71.7
NPV 8% (MUSD) -12.5 -2.7 7.0 26.3 45.4 54.7 64.0
IRR (%) -1.4 6.1 12.9 25.1 36.2 41.3 46.2
  1. Base Case (Pre-Tax NPV 6% and After-Tax 6%)

Qualified Person

The scientific and technical information contained in this news release has been reviewed and approved by:

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.

Note on Assumptions

The PEA results are based on important assumptions made by the Qualified Persons who prepared the PEA. These assumptions, including those mentioned above, and the justifications for them, are described in the PEA.

The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized.

About Cerro de Pasco Resources

Cerro de Pasco Resources Inc. is a resource management company, founded in 2012 with the original purpose of developing the El Metalurgista mining concession comprising mineral tailings and stockpiles extracted from the Cerro de Pasco open pit mine in central Peru. Our strategic strength lies in our extensive team experience and knowledge of the opportunities and challenges in and around Cerro De Pasco. The company is founded on clear objectives, to engender long-term economic sustainability and benefit for the local population, from an economic, social and health point of view. The Company’s approach at El Metalurgista entails the reprocessing and environmental remediation of mining waste and the creation of numerous opportunities in a circular economy.

About DRA Americas Peru

DRA Americas Peru is a subsidiary of DRA Global Limited and is responsible the PEA report entitled “NI 43-101 Technical Report Cerro de Pasco Resources Preliminary Economic Assessment Santander Pipe Deposit, Huaral, Lima, Peru”, dated April 11th, 2023 (effective date January 31st, 2023). DRA Global Limited (ASX: DRA | JSE: DRA) is a diversified global engineering, project delivery and operations management group, headquartered in Perth, Australia. It has more than 4,500 professionals and a proven track record in undertaking independent assessments of Mineral Resources and Mineral Reserves, project evaluations and audits, technical reports and independent evaluations on behalf of exploration and mining companies, and financial institutions worldwide.

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 estimates and assumptions underlying the PEA, projected production, cost estimates, capex estimates, projected recovery, projected gross revenue and taxes, future results, the significance of the results disclosed in this news reléase, the expectations of CDPR’s management regarding the completion of the project as well as the business and the expansion and growth of CDPR’s operations, 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.

Such factors include, among others, risks relating to the ability of CDPR’s activities to accurately predict mineralization; errors in management's geological modelling; key assumptions, parameters or methods used to prepare the PEA becoming untrue or unachievable; the ability of the Company to obtain required approvals; the results of exploration activities; title deficiencies; risks relating to mining activities; the global economic climate; metal prices; environmental risks; community and non-governmental actions as well as other assumptions and risks factors set out in CDPR’s public documents, available on SEDAR at www.sedar.com. 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

ggoulet@pascoresources.com

 

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