Cerro de Pasco Resources wins Quiulacocha tailings auction
Definitive agreements would consolidate mineral and surface rights, while the issuer has yet to establish a resource for the Peruvian tailings.
Mara Quinlan
Cerro de Pasco Resources Inc. CVECDPR OTCMKTSCDPMF FRAN8HP said on Monday it won the Quiulacocha tailings auction. The company expects signing to consolidate the tailings' mineral and surface rights alongside its 100 per cent owned El Metalurgista concession.
Shares closed higher at C$0.69 on the TSX Venture Exchange at 4:00 p.m. EDT on Oct. 9, according to CVECDPR. That Canadian quote predates the auction award announced on Monday.
The award went to subsidiary Cerro de Pasco Resources del Perú S.A.C. and remains subject to definitive agreements with AMSAC. The auction covers the tailings and associated surface rights required for reprocessing at the Quiulacocha storage facility in the Simón Bolívar district of Pasco, central Peru.
AMSAC's Oct. 12 announcement projects more than 500 million Peruvian soles in contractual payments and contributions over an estimated 21 years of operation. Those projections are the state-owned seller's estimates; Cerro de Pasco has yet to establish a mineral resource or reserve for Quiulacocha.
The issuer does not give a payment timetable for the transfer.
AMSAC also projects a social trust of approximately 20 million soles to finance programs, projects and development works for communities in the project's area of influence. Its Oct. 12 statement says the investor will assume environmental obligations and risks assigned under applicable contracts and authorizations.
The agency identifies work to reduce environmental risks, stabilize the deposit and contribute progressively to its recovery among those obligations. Cerro de Pasco's strategy is to recover metals from historic mining waste while addressing the environmental liabilities associated with the tailings.
The company is developing silver-rich tailings and stockpiles at El Metalurgista that accumulated over more than a century of mining. AMSAC, which remediates legacy mining liabilities in Peru, called the auction under a decree allowing the transfer of accumulated mining waste for economic use.
"The Company has not established a mineral resource or mineral reserve for the Quiulacocha tailings in accordance with NI 43-101," the company said in its Oct. 12 release.
Cerro de Pasco says drilling, assays, metallurgical testing and related technical work are intended to support a first resource estimate and feasibility-level studies. Its release gives no completion date or assurance that the studies will support advancing the project.
The company's forecasts assume timely permits, authorizations and community agreements, as well as financing on acceptable terms. It also flags possible challenges to the award and the risk that definitive agreements are not executed on the expected terms or timeline.
Cerro de Pasco's Oct. 12 release expects agreements to be signed in the coming days, while AMSAC's auction timetable says the signing date will be announced by circular.
