Cerro de Pasco Resources: Unlocking Value from the World's Largest Above-Ground Metal Resource

• Cerro de Pasco Resources closed $22.7 million in combined financing, including strategic participation from renowned resource investor Eric Sprott, positioning the company to advance its flagship Quiulacocha tailings project through critical development stages.
• The Quiulacocha tailings facility holds an estimated 423 million ounces of silver equivalent already extracted and ready for reprocessing, representing one of the largest above-ground metal resources globally with minimal extraction costs between $1-2 per tonne.
• The project offers diversified exposure to critical metals including silver, zinc, copper, lead, gold, gallium, and indium with metals essential for renewable energy, semiconductors, and technology applications experiencing structural supply deficits.
• Recent drilling confirms average grades of 5.5 oz/t silver equivalent, including valuable gallium (53.2 g/t) and indium (19.9 g/t), with no traditional mining required, eliminating approximately 40% of typical operational costs and permitting risks.
• The company has secured historic land easement access and is advancing multiple technical studies, metallurgical testing, and expanded Phase 2 drilling throughout 2025, creating multiple inflection points for value recognition.

Introduction: A Rare Opportunity in Above-Ground Resources

As silver prices struggle to hold gains above the critical $50/oz support level, with technical analysts at DailyForex highlighting the $51.50/oz resistance as a pivotal breakout point, investors are increasingly focused on low-cost, de-risked silver exposure. Cerro de Pasco Resources (TSXV: CDPR, OTCQB: GPPRF) has emerged as a compelling opportunity in this environment, having just closed $22.7 million in strategic financing to advance what the company describes as "the world's largest above-ground metal resource."

The timing of this capital raise proves particularly strategic. With central bank policy shifts supporting precious metals, industrial demand from electric vehicles and AI data centers driving base metal consumption, and supply constraints across critical minerals, Cerro de Pasco's Quiulacocha tailings project sits at the intersection of multiple favorable macro trends.

Unlike traditional mining projects that require years of permitting, extensive capital expenditure for mine development, and geological risk, Cerro de Pasco is positioned to reprocess material that has already been mined and stockpiled over a century of operations at Peru's historic Cerro de Pasco mining district. This fundamental difference offers investors exposure to metal price upside while substantially reducing operational and execution risks.

Company Overview: Legacy Assets Meeting Modern Technology

Cerro de Pasco Resources holds a 100% interest in the El Metalurgista mining concession covering 95.74 hectares in the Pasco Region of Peru, approximately 175 kilometers north-northeast of Lima. The concession includes mineral rights to 57 hectares of the Quiulacocha Tailings Storage Facility, which accumulated material from the early 1900s through 1992 during operations by the Cerro de Pasco Corporation and later Centromin Peru.

The region's mining heritage extends back to 1533 when Spanish colonizers first documented silver deposits. By 1736, Cerro de Pasco was renowned for its silver lodes, producing 65% of Peru's silver output around the time of Peruvian independence. In 1902, J.P. Morgan funded the establishment of the Cerro de Pasco Corporation, which became the second-largest employer in Peru by 1955.

From 2012 to present, Cerro de Pasco Resources has systematically consolidated rights to tailings and stockpile concessions with a focus on reprocessing and environmental remediation. The company's management team brings over 30 years of mining sector experience across Latin America, with Executive Director and President Manuel Rodriguez having led mining operations with over 700 workers.

The Quiulacocha Tailings Project: Size and Significance

The Quiulacocha tailings deposit covers approximately 115 hectares and represents the accumulation of processing residues from two distinct mining eras. The Copper Era (1906-1965) deposited an estimated 16.4 million tonnes containing 1.6% copper, 80 g/t silver, and 1.2 g/t gold. The Polymetallic Era (1952-1992) contributed approximately 58.3 million tonnes averaging 1.3% lead, 2.2% zinc, and 39 g/t silver.

Based on historical metallurgical balances, the company estimates the tailings contain approximately 423 million ounces of silver equivalent, comprising 262,000 tonnes of copper, 770,000 tonnes of lead, 1.25 million tonnes of zinc, 115 million ounces of silver, and 632,000 ounces of gold. At current metal prices, this represents an in-situ value distribution of approximately 27% silver, 30% zinc, 19% copper, 12% lead, and 12% gold.

Recent drilling by Cerro de Pasco has validated and expanded upon the historical estimates. Forty completed drillholes have confirmed average grades of 1.66 oz/t silver, 1.47% zinc, 0.89% lead, 0.09% copper, and 0.10 g/t gold. Significantly, the drilling has also identified substantial concentrations of gallium (53.2 g/t average) and indium (19.9 g/t average), critical minerals not reflected in historical estimates.

Strategic Financing: Eric Sprott's Vote of Confidence

The recently closed $22.7 million financing comprised two components: a C$25 million "life-of-mine" private placement and a non-brokered private placement. According to the company's announcement, "Eric Sprott, through 2176423 Ontario Ltd., participated significantly in the financing, further demonstrating his strong confidence in the Company's vision and growth potential."

"This financing marks a transformative moment for Cerro de Pasco Resources," stated Guy Goulet, CEO and Executive Director, in the company's news release.

"With Eric Sprott's continued support and participation, we are well-positioned to advance our Quiulacocha Tailings Project and unlock significant value for our shareholders."

Sprott's participation increases his fully diluted ownership position to 21.8%, up from 16.2% on a basic shares outstanding basis. This represents a substantial commitment from one of the resource sector's most respected investors, whose track record includes early investments in companies that became multi-billion-dollar producers. The financing structure provides Cerro de Pasco with sufficient capital to complete its 2025 work program without near-term dilution concerns.

Operational Advantages: Why Tailings Projects Differ

Tailings reprocessing operations offer fundamental advantages over conventional mining that directly impact capital intensity, operational risk, and economic returns. Cerro de Pasco's corporate presentation quantifies these differences across six key operational factors, demonstrating why the company's extraction costs of $1-2 per tonne compare favorably against $2-15 per tonne for open-pit mining and $30-200 per tonne for underground mining.

Drilling and blasting requirements are entirely eliminated in tailings operations. Excavation and hauling activities are minimal compared to the extensive fleet requirements and fuel consumption of conventional mining. Infrastructure costs are substantially reduced, as tailings facilities already exist on surface with established access.

Grade dilution factors present another significant advantage. Tailings extraction typically experiences 0-5% dilution compared to 10-30% for open-pit operations and 20-50% for underground mining. For Cerro de Pasco, the material has already undergone primary crushing and grinding, further reducing processing costs compared to hard-rock operations.

Current Market Context: Silver & Critical Metals Dynamics

Cerro de Pasco's development timeline coincides with favorable supply-demand dynamics across its constituent metals. The World Silver Survey 2024 documents that the silver market has experienced supply deficits for three consecutive years, with the 2023 deficit reaching 184.3 million ounces. The deficit is projected to expand by 17% in 2024, driven primarily by industrial consumption.

Photovoltaic silver demand has quadrupled since 2015, rising from 59.6 million ounces to an estimated 232 million ounces in 2024 as solar panel manufacturing scales globally. Silver prices have demonstrated this strength, surging 134% from $14.01 per ounce in 2016 to $32.75 in early 2025.

Beyond silver, Cerro de Pasco offers leveraged exposure to zinc, copper, and lead experiencing their own supply constraints. The company's recent identification of significant gallium and indium concentrations positions it in the critical minerals space. China controls over 98% of global gallium production, creating supply chain vulnerabilities that Western governments and technology companies are actively seeking to mitigate.

Economic Potential: Base Case & Upside Scenarios

While not NI 43-101 compliant, Cerro de Pasco's internal economic projections provide insight into potential project economics under various operational scenarios. The company's base case assumes 40% average metal recovery and processing capacity of 10,000 tonnes per day (3.6 million tonnes annually), resulting in an estimated net smelter return (NSR) of $49 per tonne after treatment and refining charges.

With estimated operational expenditure of $10 per tonne, the base case generates operating profit of $39 per tonne. Applied across the estimated 75 million tonne resource and a 20-year mine life, this scenario produces life-of-mine profits of approximately $2.9 billion, or $140 million annually.

The company's upside case contemplates 70% average metal recovery and 20,000 tonnes per day processing capacity. This scenario incorporates gallium and indium revenues, increasing in-situ value from $169 to $198 per tonne. The upside case yields NSR of $100 per tonne, translating to life-of-mine profits of $6.3 billion or $610 million annually.

2025 Catalysts & Value Inflection Points

Cerro de Pasco has structured its 2025 work program to generate multiple newsflow events that could serve as catalysts for value recognition. The completion of remaining Phase 1 drillhole assays will finalize the dataset for resource modeling, potentially leading to an updated resource estimate that incorporates gallium and indium values not reflected in historical figures.

Metallurgical studies represent perhaps the most critical value driver, as they will determine achievable recovery rates that directly impact project economics. Results demonstrating recovery rates toward the higher end of the range would substantially de-risk the investment thesis.

The formalization of claims on surrounding tailings could expand the resource base beyond current estimates. Phase 2 drilling targeting the copper-silver-gold tailings zones will test areas with potentially higher unit values. The completion of various scoping studies will progressively de-risk operational assumptions.

Environmental & Social Value Proposition

Beyond financial returns, Cerro de Pasco offers investors exposure to environmental remediation and social benefit that increasingly matter to institutional capital. The Quiulacocha tailings currently generate acid rock drainage that impacts water quality in the region. By reprocessing this material, the company will reduce this environmental liability while recovering valuable metals.

The project will generate tax revenue for the Peruvian government and support local economic development in a region where mining has been the economic foundation for centuries. Operations are expected to span 20 years, creating sustained employment in a community with an established mining workforce.

The tailings extraction methodology offers additional environmental advantages over conventional mining. Operations proceed without dust generation or the use of explosives, reducing air quality impacts. The floating barge system with submersible pumps enables 24-hour operations while minimizing surface disturbance and noise.

The Investment Thesis for Cerro de Pasco Resources

• Eric Sprott's increased participation to 21.8% fully diluted validates technical thesis and provides $22.7M to execute development program.
• 423Moz silver-equivalent above-ground resource eliminates geological risk and 40% of conventional mining costs.
• Silver supply deficit, critical minerals concentration, and base metal demand create multiple value drivers.
• Metallurgical study results, resource expansion, and scoping study completion create 2025 newsflow.
• Environmental remediation component aligns with institutional ESG mandates while reducing permitting risk.
• Existing roads, power, water, and processing facilities eliminate greenfield development challenges.

Cerro de Pasco Resources represents an unusual opportunity within the mining sector: a large-scale, advanced project with substantial institutional backing, exposure to multiple metals experiencing favorable supply-demand dynamics, and a business model that substantially reduces operational and permitting risks. The recent $22.7 million financing provides the capital necessary to advance the project through critical technical studies that will determine its ultimate economic viability.

For investors seeking leveraged exposure to silver prices, Cerro de Pasco offers this with the added benefit of base metals and critical minerals diversification. The company's internal economic scenarios suggest potential for exceptional returns if metallurgical recoveries approach upside case assumptions, while the base case demonstrates attractive economics at conservative operational parameters.

The participation of Eric Sprott provides validation that sophisticated resource investors view the technical thesis as credible. Throughout 2025, investors should monitor metallurgical testing results, progress on formalizing surrounding claims, scoping study advancement, and Phase 2 drilling results. The tailings reprocessing business model creates substantial downside protection, as even a 20-30% decline in metal prices would likely maintain project viability.

TL;DR

Cerro de Pasco Resources closed $22.7M in strategic financing led by Eric Sprott (now 21.8% owner) to advance its 423Moz silver-equivalent Quiulacocha tailings project in Peru. The above-ground resource eliminates mining risk and 40% of conventional costs, while offering diversified exposure to silver, zinc, copper, and critical minerals. Recent drilling confirms 5.5 oz/t Ag-eq grades with significant gallium discovery. 2025 catalysts include metallurgical study results, resource expansion, and scoping studies creating multiple inflection points for value recognition.

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