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| Almost completely under the radar, a company has just gained access to one of the largest above-ground metals deposits in the world.
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| To understand the implications of this development, you need to understand the history of the Cerro de Pasco mine in Peru — a mine that has yielded more than 300 million tonnes of ore over the last 400 years.
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| This legendary mine’s most productive period began in 1906, when J.P. Morgan himself invested and helped it become the largest copper-gold-silver mine in the world and the cash cow of the entire country.
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| The copper mining era lasted until 1965, while the polymetallic mining era began in 1952 and lasted until 1992. Over that near-90-year period, the mine amassed a huge stockpile of unprocessed material and a massive tailings storage area.
Low metals prices in the 1990s nearly shuttered the mine...leaving behind a huge environmental liability located right next to a population center.
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| Fast-forward to 2024, and Cerro de Pasco Resources (CPDR.CN; GPPRF.OTC) has secured access to its mineral rights at the project’s Quiulacocha Tailings.
This is a big deal: Dubbed the El Metalurgista concession, Cerro de Pasco’s rights to Quiulacocha give this outfit access to an above-ground metals resource that stands as one of the largest on the planet.
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| Cerro de Pasco Resources brings a plan to process the Quiulacocha tailings, making big profits for the company and driving economic development for the State, while simultaneously mitigating various environmental issues related to acid mine drainage.
And, just this week, the company received word that the government of Peru has finalized a “forced easement” and it is awaiting final signatures so that CPDR can begin assessment work on the tailings.
Things are going to start happening at Quiulacocha quickly now, making this a great time to take a closer look at Cerro de Pasco Resources.
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| Historic Mine Leaves Behind Massive
Tailings Facility and Mineral Stockpile
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| When the mine was in full-scale operation, the miners were extracting 20,000 tonnes per day from the open pit, processing 13,000 tonnes in the facilities on site and stockpiling 7,000 tonnes per day of material plus some waste.
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| The result of decades of mining was the vast tailings storage facility at Quiulacocha and the huge adjoining stockpile.
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| The Quiulacocha tailings facility is estimated to hold 75 million tonnes of mineralized material, while the stockpile is estimated to hold 100 million tonnes of mineralized material.
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| Click image to enlarge.
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| A 2020 mineral resource estimate for the stockpile showed a 30.1-million-tonne resource containing 42.9 million ounces of silver, 184,000 tonnes of lead and 437,000 tonnes of zinc.
And consider this: An analysis of the historic records on Quiulacocha indicated it contains non-43-101 compliant 458 million ounces of silver-equivalent material.
Simply put, El Metalurgista covers two potentially massive sources of base metals and silver.
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| Easement is Project’s Starting Gun
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| Cerro de Pasco Resources has been chomping at the bit to perform confirmatory exploration drilling on Quiulacocha, but has been blocked by a deadlock over the facility with the state-owned Activos Mineros.
Imminently, the government of Peru will resolve that deadlock by granting the company a forced easement that provides access to the area.
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| The receipt of this easement is a big deal, as it allows Cerro de Pasco Resources to undertake a resource-defining drill program during the Andean dry season.
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| As it moves forward with this work, the company will agree to terms to extend drilling to the entire Quiulacocha tailings site, beyond the boundaries of the El Metalurgista concession.
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| Doing Well by Doing Good
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| Cerro de Pasco’s plans for Quiulacocha call for it to produce an NI 43-101 estimate on the tailings facility in preparation for a re-processing of this material.
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| This project, once in operation, will have tremendous benefits for the local population.
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| The mine used to employ several thousand people out of the population of 67,000. The project promises to be a new economic boon to the community and to generate substantial income taxes for Peru from an estimated $150 million in yearly cash flow.
The acid water issues will be mitigated by re-processing the tailings, and in 10 years there’ll be no more acid water from this source because all tailings will have been processed. CPDR is also looking at producing in-demand sulfuric acid from the pyrite.
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| While the Quiulacocha project is kicking off a huge amount of cash flow, the company will be restoring the site. The image above is a rendering of what CPDR expects the site to look like post closure.
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| News Will Begin to Flow Now...
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| Again, with the easement in place, Cerro de Pasco Resources can begin its work in earnest on Quiulacocha.
This tailings facility alone is estimated to have more than $12 billion worth of base and precious metals. Because this material has already been processed, no mining is required, and mining typically represents about 40% of the cost of producing base and precious metals.
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| Simply put, the processing operation at Quiulacocha could print money, all while remediating the environmental issues that these tailings present.
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| And that doesn’t even account for the huge potential of processing the Excelsior stockpile.
With a market cap hovering around C$35 million, Cerro de Pasco Resources is getting nowhere near full credit for the huge project it has on its hands.
The news will start to flow soon from CPDR’s work on Quiulacocha, making now the time to begin doing your homework on this undervalued company.
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