Cerro de Pasco Resources Closes $22.7M Financing & Strengthens Path to Feasibility, Securing Institutional Validation for a High-Margin Tailings Reprocessing Model

• Cerro de Pasco Resources closed $22.7 million in combined Listed Issuer Financing Exemption (LIFE) and non-brokered private placements on November 7, 2025, providing full funding to complete feasibility work on the Quiulacocha Tailings Project.
• The financing was validated by participation from Eric Sprott, who invested $4 million and holds 16.2 percent of outstanding shares (21.8 percent fully diluted), having supported every CDPR financing since becoming an insider.
• Proceeds fund critical technical, environmental, and engineering milestones, enabling CDPR to progress toward pre-construction readiness with feasibility targeted for mid-to-late 2026.
• The project's large-scale tailings resource (historic estimate of 423 million ounces silver equivalent across 75 million tonnes) and ultra-low cost profile ($1 to $2 per tonne extraction) differentiate CDPR within a market prioritizing margin resilience and critical metals exposure.
• With feasibility now fully financed, investors gain clearer visibility on project economics, permitting timelines, and strategic value, positioning CDPR ahead of a multi-year silver and critical metals deficit expected to grow by 17 percent in 2024.

Why This Financing Matters for Investors

The mining capital markets environment in late 2024 and early 2025 has been selective for early-stage developers, with institutional allocations increasingly concentrated among projects demonstrating clear paths to production, robust economics, and balance sheet visibility. Against this backdrop, silver and critical metals markets face structural supply deficits driven by industrial demand growth, particularly from photovoltaic applications, while environmental, social, and governance constraints limit new mine development.

Cerro de Pasco Resources has navigated this environment by closing $22.7 million in combined LIFE and private placement financings, securing capital from high-conviction institutional investors and a syndicate led by SCP Resource Finance Limited Partnership. The company now holds sufficient funding to advance the Quiulacocha Tailings Project through full feasibility studies and toward pre-construction readiness, removing near-term financing uncertainty.

Guy Goulet Chief Executive Officer of Cerro de Pasco Resources articulates the significance:

"We're achieving milestones, so we got funds interested in knowing more about what we're doing and what are the next milestones."

The Financing: Structure, Terms & Investor Significance

The $22.7 million financing comprises two components. The LIFE Offering raised $15 million through 31.2 million units priced at $0.48 per unit. Each unit consists of one common share and one-half warrant, with full warrants exercisable at $0.68 until November 7, 2027. The LIFE structure provides immediate free-trading status, a critical feature for institutional investors requiring liquidity.

The concurrent non-brokered private placement raised an additional $7.7 million through 16.1 million units on identical terms, allowing direct participation from strategic investors including Eric Sprott. The warrant component introduces potential additional capital of approximately $31 million if exercised in full.

High-Quality Syndicate Participation

SCP Resource Finance Limited Partnership co-led the LIFE Offering alongside Raymond James Ltd., with participation from Canaccord Genuity Corp. and CIBC World Markets Inc. This syndicate represents some of the most active and selective mining financiers in Canadian capital markets, with track records supporting projects through construction and into production. Their participation reflects rigorous due diligence on CDPR's technical risk profile, jurisdictional positioning, and economic viability.

Eric Sprott's Repeat Investment

Eric Sprott purchased 8.3 million units for $4 million, maintaining his position as CDPR's largest shareholder at 16.2 percent of outstanding shares (21.8 percent fully diluted) as of October 1, 2025. Sprott has participated in every CDPR financing since becoming an insider.

Guy Goulet emphasizes this strategic advantage:

"Most of them are in the back pocket of Eric Sprott, and Eric Sprott does not need to sell shares to exercise the warrants. That's the beauty of having Eric Sprott in.”

Regulatory & Permitting Pathway

CDPR holds current permits enabling technical, environmental, and engineering work at the Quiulacocha Tailings Project. In May 2024, the company received a Supreme Resolution granting access to the El Metalurgista Concession for a 40-hole drilling campaign. Advancing to construction requires additional regulatory authorizations from Peru's Ministry of Energy and Mines, with discussions ongoing.

The company is focused on environmental baseline studies as preparation for future permitting stages. While Peru maintains established mining regulatory frameworks with standardized processes, the country has experienced periods of political volatility and community-mining tensions that represent ongoing jurisdictional considerations.

Asset Scale: One of the World's Largest Above-Ground Metal Inventories

According to the NI 43-101 Technical Report "El Metalurgista Concession - Pasco, Peru" authored by CSA Global in 2021, the Quiulacocha Tailings represent a historic estimate derived from historic metallurgical balances and are not classified as a current mineral resource or reserve under modern reporting standards. The historic estimate indicates approximately 423 million ounces of silver equivalent. Recent drilling confirms average grades of 5.5 ounces per tonne silver equivalent.

The site also hosts an NI 43-101 compliant Inferred Mineral Resource at the Excelsior Stockpile of 30.1 million tonnes containing 42.9 million ounces silver (at 44 grams per tonne), 184,000 tonnes lead, and 437,000 tonnes zinc.

The historic estimate's metal value distribution reflects diversification: zinc contributes 30 percent, silver 27 percent, copper 19 percent, lead 12 percent, and gold 12 percent. This multi-metal composition provides natural hedging against single-commodity price volatility.

Guy Goulet contextualizes the scale:

"This is really large. This is 75 million tons of material sitting on top of the ground."

Strategic Importance in the Global Silver & Critical Metals Landscape

Global silver markets face structural deficits. The silver market deficit reached 184.3 million ounces in 2023 and is expected to grow by 17 percent in 2024. Silver demand in photovoltaics has quadrupled since 2015, rising to an estimated 232 million ounces in 2024.

CDPR's drilling identified gallium (53.2 grams per tonne) and indium (19.9 grams per tonne) based on average grades from 40 drill holes. Management confirmed results were "exactly where we expected to be" based on historical compilation, with the last two holes to the south averaging 86 grams per tonne gallium. Results proved "fairly systematic" and "reliably consistent."

These critical metals face severe supply chain vulnerabilities. China's gallium output is expected to reach 750,000 kilograms by 2024, capturing over 98 percent of global output. While CDPR's feasibility work focuses primarily on base and precious metals, the critical metals optionality enhances strategic value for potential off-take partners.

Economics & Margin Potential: Why CDPR's Model Stands Out

Tailings reprocessing eliminates conventional mining costs entirely. The material sits at surface in pre-crushed form, requiring only mechanical excavation and transport to a processing facility.

The extraction cost for tailings material is estimated at $1 to $2 per tonne because the material has already been mined. The process involves excavation, wet tailings pumping, and hauling, with no traditional mining, blasting, or underground development costs.

Margin Visibility Ahead of Feasibility

CDPR utilizes internal projections (not NI 43-101 compliant) for potential economics: a base case (40 percent recovery, 10,000 tonnes per day) and upside case (70 percent recovery, 20,000 tonnes per day). Using metal prices of $30 per ounce silver, $3,000 per tonne zinc, $9,000 per tonne copper, $2,000 per tonne lead, and $2,500 per ounce gold, the base case projects operating profit per tonne of $39, while the upside case projects $85 per tonne. The upside case includes gallium at $550 per kilogram and indium at $350 per kilogram.

These margin projections reflect ultra-low extraction costs combined with multi-metal revenue streams. High operating margins provide resilience against commodity price downturns, maintaining positive cash flow where marginal underground mines would face production curtailments.

Strategic Positioning: ESG, Remediation & Critical Minerals

The Quiulacocha tailings deposit generates acid rock drainage impacting local water quality. A community of 67,000 people is located around the hazardous tailings, facing poverty, freezing temperatures, lack of hot water and potable water, and high lead content in soil. Historical mining operations processed sulfide ores without modern environmental controls, leaving tailings that oxidize and release dissolved metals.

CDPR's reprocessing model addresses this environmental liability while extracting economic value. By removing the tailings mass and processing it to recover metals, the project eliminates the source of ongoing contamination.

Zadka articulates this alignment:

"It's beautiful that this opportunity is also an environmentally friendly opportunity, and it's going to have positive impacts to the environment. We have all these winning conditions."

Management met with the mayor, who supports the project as it will provide funding for children's education, generate tax revenue, and support local economic development.

Zadka reinforces the remediation necessity:

"There's only one way to remediate the environment in Cerro de Pasco. You have to reprocess the tailings and remove the stockpile from where it is."

Management Track Record & Execution Capability

Chief Executive Officer Guy Goulet brings over 30 years of investment experience in the mining sector, leading multiple listed ventures in Canada and internationally. Independent Director John Carr, a chemical engineer, co-founded New Century Resources and led the restart of the Century Zinc Mine in Australia, now one of the world's top 15 zinc producers. Additional key team members include Executive Chairman Steven Zadka, Chief Financial Officer James Cardwell, and Chief Technology Officer Bernard Dold, a world-leading expert on pyrite.

The management team's successful closing of the complex $22.7 million LIFE offering in a challenging financing environment demonstrates institutional credibility and capital markets competency extending beyond technical mining expertise.

Jurisdictional Conditions: Peru's Role in a Tightening Metals Market

Peru maintains established mining regulatory frameworks developed over more than a century of operations, with standardized permitting processes and institutional mining expertise. The Cerro de Pasco region, at approximately 4,300 meters elevation in Peru's central highlands, historically represents one of the world's most productive mining districts for silver, lead, and zinc.

While Peru offers structural advantages, investors should monitor ongoing political developments and community relations as standard jurisdictional risk factors, recognizing that the country has experienced periods of political volatility affecting mining sector operations.

Key Risks & Investor Considerations

Material risk factors include reliance on historic estimates (423 million ounces silver equivalent) which are not classified as current mineral resources or reserves under NI 43-101. The project requires additional regulatory authorizations for the next stage of activities.

Metallurgical recovery risk represents a key technical consideration, as historic operations achieved only 60 percent recovery. CDPR's feasibility program must demonstrate whether current processing technologies can achieve the 40 to 70 percent recovery rates assumed in internal projections. Geotechnical stability and hydrogeology studies will assess the structural characteristics of the tailings mass.

Commodity price sensitivity affects project economics across multiple metals. The internal projections are based on fixed prices, and fluctuations would directly impact projected profit margins. However, the strong underlying market deficit for silver, which constitutes 27 percent of the asset's estimated value, suggests a positive macro tailwind.

The Investment Thesis for Tailings Reprocessing & Silver Exposure

• Capital is now secured for full feasibility execution, removing near-term financing risk and providing clarity on the pathway to construction decision-making following the November 7, 2025 financing close.
• The high-margin, low-cost tailings business model offers strong visibility on potential earnings margins, with extraction costs of $1 to $2 per tonne positioning CDPR among the lowest-cost potential producers of silver, zinc, and copper, assuming successful feasibility outcomes.
• Exposure to structural silver supply deficits aligns with long-term demand growth from industrial applications, particularly photovoltaic manufacturing, with the silver market deficit expected to grow by 17 percent in 2024.
• Optionality through critical metals including gallium, indium, copper, and zinc enhances strategic value beyond base-case silver economics, with potential to attract off-take interest from technology manufacturers seeking non-Chinese supply sources.
• The environmental remediation narrative positions CDPR as a mining investment offering measurable environmental improvement, addressing acid rock drainage and soil contamination affecting a community of 67,000 people.
• Management expertise in tailings reprocessing and mine restart operations, validated through capital markets execution and the successful closing of a complex LIFE offering co-led by SCP Resource Finance and Raymond James, demonstrates capability to navigate technical, regulatory, and financial challenges.
• Jurisdictional advantages in Peru provide access to established mining infrastructure, skilled labor, and supply chains that reduce capital intensity and execution risk, while investors should maintain awareness of ongoing political and community dynamics.

Why the $22.7M Financing Represents a Structural Shift in CDPR's Pathway

The closing of $22.7 million in combined LIFE and private placement financings on November 7, 2025 marks a definitive inflection point in Cerro de Pasco Resources' development trajectory. With institutional validation from a high-quality syndicate and sustained support from Eric Sprott, who holds 16.2 percent of outstanding shares (21.8 percent fully diluted), CDPR now operates from a position of financial strength. The coming 12 to 24 months will deliver visibility into project economics through feasibility studies targeted for completion in mid-to-late 2026. The Quiulacocha Tailings Project combines a large-scale historic metal inventory estimate, ultra-low extraction costs, environmental remediation benefits addressing community health concerns, and jurisdictional positioning in an established mining region. As global metals markets tighten, this financing positions CDPR to compete for institutional allocation as feasibility results emerge, marking a structural shift from concept to credible development pathway.

TL;DR

Cerro de Pasco Resources closed $22.7 million in financing on November 7, 2025, co-led by SCP Resource Finance and supported by Eric Sprott's $4 million investment. The capital fully funds feasibility studies for the Quiulacocha Tailings Project, targeting completion in mid-to-late 2026. The project hosts a historic estimate of 423 million ounces silver equivalent across 75 million tonnes with ultra-low extraction costs of $1 to $2 per tonne. Internal projections model operating profits of $39 to $85 per tonne across base and upside cases. The tailings also contain critical metals gallium and indium, averaging 53.2 and 19.9 grams per tonne respectively. The financing removes near-term capital risk and positions CDPR to deliver technical clarity on economics and permitting for one of the world's largest above-ground metal inventories.

FAQs (AI-Generated)