Silver Surge: Why Cerro de Pasco Resources Merits Attention

• Cerro de Pasco Resources controls the Quiulacocha tailings deposit containing a historic estimate of 423 million ounces of silver equivalent, representing the world's largest above-ground metal resource with recent drilling confirming 5.5 oz/t AgEq composite grades.
• Major analyst forecasts projecting silver at $65/oz for 2026 align with a structural market deficit entering its fifth consecutive year, while the silver market reached 184 million ounces in deficit during 2023 with photovoltaic demand quadrupling since 2015.
• The company's tailings reprocessing approach eliminates 40 percent of conventional mining costs, with base-case scenarios projecting $39 per tonne profit and $2.9 billion life-of-mine value at 10,000 tonnes-per-day throughput, scaling to $85 per tonne profit and $6.3 billion at 20,000 tonnes-per-day.
• Beyond silver, zinc, and lead, the deposit contains gallium (53 g/t) and indium (19.9 g/t), providing exposure to critical semiconductor materials amid geopolitical supply concerns with China controlling 98 percent of global gallium production.
• Multiple value-unlock events including remaining Phase 1 drill results, metallurgical studies, expanded Phase 2 drilling, and scoping study completion position the company for resource classification upgrades throughout 2025 and 2026.

The precious metals sector stands at an inflection point. A major research report issued October 13, 2025 lifted gold forecasts to $5,000 per ounce and silver to $65 per ounce for 2026, reflecting structural changes in supply-demand dynamics that favor producers with scale, low-cost operations, and near-term production pathways. Against this backdrop, Cerro de Pasco Resources (TSXV: CDPR | OTC: GPPRF | BVL: CDPR | FRA: N8HP) presents a compelling investment case centered on the world's largest above-ground silver-equivalent resource located in Peru's historic Pasco mining district.

The company's positioning addresses two critical market realities. First, the silver market has entered its fifth consecutive year of structural deficit, with the 184-million-ounce shortfall recorded in 2023 expected to expand by 17 percent in 2024 according to the Silver Institute. Second, traditional primary silver production faces declining grades and rising costs, creating opportunities for alternative supply sources. Cerro de Pasco Resources' tailings reprocessing approach offers a solution that circumvents conventional mining challenges while providing environmental remediation benefits.

With a market capitalization of approximately $270 million as of September 5, 2025, and share price of $0.51, the company trades at a significant discount to the potential value embedded in its 423-million-ounce silver-equivalent Quiulacocha deposit and 42.9-million-ounce Excelsior stockpile. This valuation gap, combined with multiple near-term catalysts, warrants closer examination by investors seeking precious metals exposure.

Company Overview

Cerro de Pasco Resources operates in the Pasco Region of Peru, a legacy mining district with extensive historical silver production dating to the early 1900s. The company's primary asset, the Quiulacocha tailings deposit, represents accumulated waste from nearly a century of mining operations that ceased in 1992. Modern drilling and assaying techniques have revealed significantly higher metal values than historical operators could economically recover, transforming yesterday's waste into today's resource.

The corporate structure reflects strong institutional backing. Eric Sprott, a prominent precious metals investor, holds 16.4 percent of outstanding shares, while management and directors control 13.7 percent, demonstrating meaningful insider alignment. The company maintains 529.3 million shares outstanding with a fully diluted count of 675 million shares. Leadership includes Executive Chairman Steven Zadka, CEO Guy Goulet, Executive Director and President Manuel Rodriguez, and CFO James Cardwell, bringing international mining, finance, legal, and environmental expertise to the operation.

Cerro de Pasco Resources trades on multiple exchanges including the Toronto Venture Exchange, OTC markets, the Lima Stock Exchange, and Frankfurt, providing liquidity across jurisdictions. This multi-market presence facilitates access for both North American retail investors and institutional funds seeking emerging-market precious metals exposure. The company's September 2025 corporate presentation positions the firm to "unlock the value of the world's largest above-ground metal resource," a tagline supported by the scale and grade characteristics of its deposits.

Key Development: Quiulacocha Tailings Resource

The Quiulacocha tailings deposit contains a historic estimate of 423 million ounces of silver equivalent, derived from sulphide ores deposited between the 1900s and 1992. Historical mining operations processed the deposit through distinct eras, with the copper era yielding material grading 80 g/t silver and 1.6 percent copper, while the polymetallic era produced 39 g/t silver, 1.3 percent copper, 2.2 percent lead, 770 thousand tonnes of lead, 1.253 million tonnes of zinc, and 73 million ounces of silver. Overall historic contained metal totals approximately 250 million ounces of silver.

Recent drilling has substantially upgraded understanding of the deposit's economics. The company completed 40 holes with all assays returned, revealing average grades of 1.66 ounces per tonne silver, 1.47 percent zinc, and 0.89 percent lead. Significantly, the deposit also contains gallium at 53 g/t and indium at 19.9 g/t, strategic metals critical for semiconductor manufacturing, electric vehicles, solar panels, and LED production. The composite average grade across all metals reaches 5.5 ounces per tonne silver equivalent, substantially higher than many conventional primary silver operations.

Economic modeling presented in the company's September 2025 corporate presentation outlines two scenarios. The base case assumes 10,000 tonnes per day throughput, generating $39 per tonne profit and $2.9 billion life-of-mine value. The upside case models 20,000 tonnes per day throughput, producing $85 per tonne profit and $6.3 billion life-of-mine value. These projections reflect the inherent cost advantages of tailings reprocessing, which avoids drilling, blasting, and primary crushing expenses that typically represent 40 percent of conventional hard-rock mining costs.

Strategic Significance: Market Backdrop

An October 13, 2025 research note reported by Reuters established the first major analyst forecast of $5,000 per ounce gold and $65 per ounce silver for 2026. The analysis includes average forecasts of $4,400 per ounce for gold and $56.25 per ounce for silver, reflecting conviction in precious metals' role under current macroeconomic conditions. Analysts cited the White House's "unorthodox policy framework" characterized by large fiscal deficits and rising debt as supporting gold demand, while efforts to reduce the U.S. current-account deficit combined with rate-cut intentions amid approximately 3 percent inflation underpin the bullish outlook.

For silver specifically, the research acknowledges an expected 11 percent demand decline in 2026 but emphasizes that structural supply shortfalls override near-term demand fluctuations. The Silver Institute confirms the market entered its fifth consecutive year of structural deficit, with the 184-million-ounce shortfall recorded in 2023 driven primarily by industrial consumption. Photovoltaic demand alone quadrupled from 59 million ounces in 2015 to 232 million ounces in 2024, reflecting solar panel manufacturing's insatiable appetite for the metal. Silver's price performance validates this supply-demand imbalance, with the metal rising 134 percent from $14.01 per ounce in 2016 to $32.75 per ounce in early 2025, reaching record highs near $51.70 per ounce as of the report date.

The research cautioned about near-term correction risks, particularly noting dislocations in the London silver market where lease rates spiked following transfers of physical metal to New York in anticipation of tariffs that ultimately did not materialize. However, analysts maintain that even if investor demand increases by 28 percent to push gold to $6,000 per ounce, the underlying fiscal and monetary dynamics support sustained precious metals strength. This macro environment creates ideal conditions for silver producers with low-cost operations and scalable production profiles.

Extraction Methodology & Cost Advantages

Cerro de Pasco Resources employs a tailings reprocessing methodology that fundamentally differs from conventional hard-rock mining. The operation utilizes submersible pumps mounted on barges to create slurry, which moves through floating pipelines to the processing facility. This approach eliminates trucking, blasting, and dust generation while enabling 24-hour-per-day, seven-day-per-week operation regardless of weather conditions. The absence of traditional mining activities reduces both capital expenditure and operating costs while minimizing environmental impact.

The cost advantage becomes evident when comparing tailings reprocessing to conventional mining. Traditional hard-rock operations incur substantial expenses for drilling, blasting, primary crushing, and waste rock handling before material reaches the mill. These activities typically represent 40 percent of total mining costs. Tailings reprocessing eliminates these expenses entirely, as the material has already been extracted, crushed, and processed once. The resulting economic profile supports profitable operations at lower metal prices than many conventional producers require.

Environmental benefits complement the economic advantages. The Quiulacocha deposit currently generates acid water contamination, a legacy of decades of sulphide mineral exposure to air and water. Reprocessing removes the contamination source while recovering valuable metals, transforming environmental remediation from a cost center into a revenue generator. The company's vision includes post-closure rehabilitation of the entire Cerro de Pasco mining district, positioning the project within the circular economy framework that increasingly attracts capital from ESG-focused investors.

Additional Assets: Excelsior Stockpile

Beyond Quiulacocha, Cerro de Pasco Resources controls the Excelsior stockpile, an inferred resource containing 30.1 million tonnes at 44 g/t silver, 1.5 percent zinc, and 0.6 percent lead. This translates to 42.9 million ounces of contained silver, with substantial zinc and lead credits. The project models a 20-year lifespan at approximately 3.6 million tonnes per annum throughput, producing zinc and lead concentrates with silver as a byproduct.

The Excelsior deposit provides operational diversification and production optionality. While Quiulacocha represents the flagship asset, Excelsior offers a secondary production source that could commence operations independently or in parallel. The stockpile's grade profile of 44 g/t silver exceeds the Quiulacocha composite grade, though the tonnage represents roughly 7 percent of the primary deposit. This combination allows management flexibility to optimize production scheduling based on metal prices, processing capacity, and capital availability.

The presence of two substantial deposits within the same district generates infrastructure synergies. Processing facilities, power supply, water management systems, and tailings disposal solutions can serve both operations, reducing per-tonne capital and operating costs. The 20-year mine life projection for Excelsior, combined with the larger Quiulacocha deposit, supports a multi-decade operational outlook that justifies investment in robust infrastructure and provides long-term employment for the region's established mining workforce.

Current Activities & Catalysts

Cerro de Pasco Resources has outlined a clear development roadmap with multiple near-term catalysts. The company continues releasing Phase 1 drill results, with 40 of 40 holes assayed and reported as of September 2025. Additional results from this program will further refine grade distributions and mineral zonation, supporting resource estimation and mine planning. Mineralogical and metallurgical studies currently underway will determine optimal processing flowsheets and recovery rates for each metal component.

The company is formalizing claims on surrounding tailings deposits, expanding the potential resource base beyond the current Quiulacocha footprint. An expanded Phase 2 drilling program will test extensions and increase drill density in higher-grade zones identified during Phase 1. These activities support advancement toward an initial resource estimate compliant with NI 43-101 standards, a critical milestone for attracting institutional investment and potential strategic partners.

Scoping studies encompassing geotechnical analysis, hydrogeology, environmental baseline data, infrastructure requirements, logistics planning, and mining method trade-offs are progressing concurrently. These studies will culminate in preliminary economic assessments that quantify capital requirements, operating costs, and financial returns under various production scenarios. Completion of these technical milestones through 2025 and 2026 will substantially de-risk the project and provide investors with transparent metrics to evaluate the investment opportunity.

The Investment Thesis for Cerro de Pasco Resources

• Leverage silver's structural deficit with direct exposure to a 423-million-ounce AgEq deposit amid analyst forecasts of $65/oz for 2026.
• Capitalize on 40 percent cost advantage versus conventional mining through proven tailings reprocessing methodology.
• Position for resource estimate and PEA catalysts through 2025-2026 that will establish valuation metrics and attract institutional capital.
• Diversify into strategic metals (gallium/indium) to capture semiconductor supply-chain premiums beyond precious metals cycles.
• Monitor Phase 2 drill results for grade expansion that could support upside scenarios toward $6.3 billion life-of-mine value.
• Consider entry points during precious metals volatility that analysts flag as near-term risk despite bullish long-term outlook.

Cerro de Pasco Resources presents a differentiated precious metals investment combining world-class resource scale with low-cost production economics and strategic metals optionality. The company's 423-million-ounce silver-equivalent Quiulacocha deposit and 42.9-million-ounce Excelsior stockpile position it among the largest undeveloped silver resources globally. The tailings reprocessing approach eliminates 40 percent of conventional mining costs while providing environmental remediation, creating a sustainable business model aligned with ESG priorities. Major analyst forecasts of $65 per ounce silver for 2026 reflect the structural supply deficit that has persisted for five consecutive years, supporting Cerro de Pasco Resources' economic case across multiple price scenarios.

TL;DR

Cerro de Pasco Resources controls the 423-million-ounce silver-equivalent Quiulacocha tailings deposit in Peru, the world's largest above-ground metal resource. Recent drilling confirms 5.5 oz/t AgEq composite grades with strategic metals gallium (53 g/t) and indium (19.9 g/t). The company's tailings reprocessing methodology eliminates 40 percent of conventional mining costs, supporting base-case economics of $39/t profit and $2.9 billion life-of-mine value at 10,000 tpd throughput, scaling to $85/t profit and $6.3 billion at 20,000 tpd. An October 2025 research report projects silver reaching $65/oz in 2026, driven by the fifth consecutive year of structural market deficit with 184 million ounces shortfall in 2023. Multiple near-term catalysts include Phase 1 drill results, metallurgical studies, Phase 2 drilling expansion, and scoping study completion through 2025-2026. With market cap of $270 million, Eric Sprott holding 16.4 percent, and management controlling 13.7 percent, CDPR offers leveraged exposure to silver's bull market with strategic metals optionality and ESG-aligned environmental remediation.

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