Profitable mine with potential to grow operating cash flow and significant exploration upside

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Cerro de Pasco Resources to acquire Trevali's Santander Mine. (Credit: Khusen Rustamov from Pixabay)

Cerro de Pasco Resources Inc. (CSE: CDPR) (Frankfurt: N8HP) (“CDPR,” or the “Company”) is very pleased to announce that the Company has entered into a share purchase agreement (the “Agreement”) with Trevali Mining Corporation (“Trevali”) (TSX: TV) (BVL: TV) (OTCQX: TREVF) (Frankfurt: 4TI), pursuant to which it will acquire Trevali’s Santander Mine (the “Transaction”), located approximately 215 kilometres northeast of Lima, Peru and comprising an underground mine, a 2,000-tonne-per-day processing mill, a conventional sulphide flotation mill, and associated infrastructure.

The Santander Mine

The Santander Mine consists of the currently operational and fully permitted polymetallic Magistral underground mine, a concentrator plant and tailings facilities within a very prospective mining and exploration concession covering 44 square km. Trevali Guidance for 2021 Santander operations indicates the mine will produce approximately 50-55Mlb of payable zinc, 4Mlbs of payable lead and 282-297koz of payable silver per year at an All-in Sustaining Costs of USD1.08-1.14 per payable pound of zinc produced.

Transaction Rationale

  • Profitable mine with potential to grow operating cash flow and significant exploration upside
  • Steady state, fully permitted operation with stable workforce and good community relations
  • A modern 2,000 tonne per day concentrator which could be used ultimately for treating material from our El Metalurgista concession, located only 60 km away from the Santander Mine;
  • Significant tailings resource which can be retreated at the end of the life of mine;
  • CDPR plans to develop the Santander Pipe orebody by linking the existing underground mine, increasing payable zinc equivalent metal and reducing All-in Sustaining Costs after two years;
  • Closing Date Working Capital will remain positive and intact at USD7.5million.

Guy Goulet, CEO of CDPR commented: “The acquisition of this profitable mine will be transformational for CDPR with material potential to grow operating cashflow and significant exploration upside. Furthermore, the proximity to CDPR’s El Metalurgista concession provides the Company potential to utilize Santander infrastructure for future development.”

The Company plans to extend the operating life of the Magistral orebody, while developing access into the higher-grade Santander Pipe orebody over the next 24-36 months, which would extend the life of the mine by five years. Additionally, CDPR plans to increase exploration expenditure on the property.

Source: Company Press Release