The town’s history has, until now depended entirely on historical “dirty” mining of commodity metals, leading to heavy environmental contamination and sub-optimal mineral extraction. Cerro de Pasco Resources (“CDPRC”) secures economic viability of operations long-term whilst concurrently funding the clean-up & remediation with the full support of the local population. Included is a special royalty fund planning for the benefit of the community and could ultimately also be used towards their relocation in partnership with government who still hold the principle liability for their health and moving the town. The goal here is to gradually move all people out of the industrial area and clean it up. Local communities will also be the primary beneficiaries of the employment opportunities generated.
Startup using tried & tested recovery methods
The biggest source of environmental contamination comes from the old tailings dam and stockpiles which are assets containing very valuable metals which will be treated through an expanded sulphide processing facility consisting of the two old process plants once refurbished. Processing initially will be conventional crushing (in the case of the stockpiles), milling, and polymetallic floatation building up over 18 months from 2ktpd to a rate of approximately 22ktpd +/- 3ktpd, the exact number TBD subject to ongoing engineering work and current permitting constraints. An entirely new floatation section will be constructed while Tailings will be deposited in the currently permitted new Ocroyoc facility or later in the open pit (TBD). The footprints of these areas are huge and will be rehabilitated accordingly. Simultaneously, the 2.8ktpd Oxidos leach plant will run through its own 8-year life of mine producing 20-30k AuEq oz/yr from remaining oxides in the pit and on oxide stockpiles at a substantial profit, bringing further cash flow to the operation.
Assessment of true economic potential
While this is all ongoing, a comprehensive exploration program of all mineral potential at Cerro de Pasco will be undertaken. This program will start next year and include surface and underground drilling as well as underground exploration development from the existing mine infrastructure. The 50Mt (ZnPbAg) sulphide resource will be confirmed and a suitable mining method will be determined and integrated with the clean-up plan. This material will either be processed through an entirely new facility replacing the two old ones which are standing in the mining footprint. Processing rates are TBD, however it is likely to be in the region of 25-40 ktpd to enable the concurrent treating of the tailings and stockpiles per section above.
Previously identified satellite resources will also be properly outlined and assessed along with a proper environmental baseline assessment of the entire Cerro de Pasco watershed, including the town. It is highly likely that this baseline assessment will confirm the population’s concerns: That the city is not a healthy environment in which people can live and will lend weight to the national goal of resettling the local population somewhere else. In our view this is something the government of Peru will resolve thanks to an engineered solution by CDPR, funded separately by multilateral banks and of course will have the full backing of the community.
As part of this study research will be undertaken in the development of a sustainable in-line extraction process towards the elimination of all waste. There is newly emerging technology that CPR believes can be applied to this case study in environmentally responsible resource management. These include, ultra-fine grinding, pressure oxidation and/or artificial oxidation using ozone and/or bio-oxidation (BIOX®) among others. We are convinced that test work will demonstrate the viable commercial extraction and production of 99.9% pure gold, silver, zinc, lead, tin, copper, bismuth, selenium, and also possibly rare earths such as gallium, indium, germanium etc., which are all found at Cerro de Pasco. Economic by product include metal such as iron and non-metals such as sulphur. The advantages of separating these metals would reduce the typically very heavy treatment charges & penalties applied to concentrates and open the door for further beneficiation, potentially adding >30% to the project economics.
Our initial (BIOX®) test work on the pyrite is about to commence and if proved successful (which we believe it will be), will convert at least another 50Mt of pyrite in economic resources, currently classified as untreatable waste, containing approximately 0.5% Cu and 3-7oz/t Ag among other elements. On its own it is a very exciting project and we believe the exothermic nature of the process will lend itself to power generation which can be fed back into system further reducing costs. Furthermore, the principle cause of acid mine drainage would be treated, cancelling the ongoing problem of acid mine drainage.
CDPR will assume full responsibility for remediation and closure of the entire mining area. This will not only generate significant savings for the Peruvian State, but conversely will generate long-term economic benefit to the local community and the State, unlocking billions of dollars in value. Project and Tax revenues are expected to exceed $6.0BN and $1.0BN, respectively under the initial plan.
The positive impacts will be immense in terms of job creation, poverty reduction and quality of life at Cerro de Pasco, a city with over 50,000 permanent inhabitants and a unique history in, and loyalty to mining. CDPR will promote a broad spectrum of initiatives including urban re-planning, health and welfare in collaboration with the local and national authorities. Under the initial plan, some 500 households will be relocated from the most heavily contaminated areas. Timing is optimal as the Volcan operation at Cerro de Pasco reaches the end of its production and investment cycle, with the possibility of heavy layoffs looming. The CDPR assets can therefore become the nucleus for sustainable growth, renewing the site’s ageing infrastructure and plant and employing the latest technologies to create an emblematic project.