Legendary mining investor Eric Sprott has acquired 20m shares as part of a non-brokered private placement by Cerro de Pasco Resources [CSE:CDPR]. The placement raised CAD 3.2m for the Canadian miner, which is focused on the El Metalurgista mining concession in Peru.
Sprott acquired shares through a corporate entity he owns called Ontario Limited. He now beneficially owns or controls 37m common shares in Cerro de Pasco and 20m warrants, representing approximately 9% of the outstanding common shares on a non-diluted basis and 13.3% on a partially diluted basis assuming the exercise of the warrants.
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Eric Sprott is a renowned Canadian business who has a track record of taking winning bets in the mining sector. A former Merrill Lynch analyst, he has set up and successfully grown two asset management firms. Sprott Asset Management, founded in 1981, is recognised for its expertise in the mining sector. Sprott himself actively invests in the mining sector through a variety of entities. His participation in a stock is often cited as a stamp of approval by management.
Cerro de Pasco said Sprott has a long-term view of the investment and may increase or decrease his beneficial ownership of or control over the shares in the future, whether in the open market, by privately negotiated agreements or otherwise, subject to a number of factors, including general market conditions and business opportunities.
Guy Goulet, CEO of Cerro de Pasco said: “We are pleased to close this critical funding round and in parallel delighted to welcome Mr. Sprott as an investor into Cerro de Pasco Resources. We look forward to moving ahead with drilling activities at the Quiulacocha Tailings Project in late July, with the objective of producing a master plan for reprocessing the entire Quiulacocha tailings resource.”
The net proceeds from the offering will be used for drilling and general working capital. All securities issued in connection with the Offering are subject to a statutory hold period ending four-month-and-one-day from the date of their issuance, in accordance with applicable securities laws.
Cerro’s Quiulacocha Tailings in Peru
Cerro de Pasco Resources is the titleholder of a concession located in Peru called El Metalurgista, which grants it the right to explore and exploit the Quiulacocha Tailings located within its assigned area. The enforceability of these rights has been formally confirmed by the General Mining Bureau of Peruvian Ministry of Energy and Mines.
The Quiulacocha tailings storage facility covers approximately 115 hectares and is estimated to hold approximately 75 million tonnes of material processed from the 1920s to 1990s.
The facility is comprised of processing residues that came from the Cerro de Pasco open pit and underground mine. Noteworthy reports indicate an estimated 458 million ounces of silver equivalent across silver, zinc, copper, lead and gold within the tailings.
There is also evidence of additional valuable metals such as germanium, tellurium, indium, and gallium; this resource has not been confirmed yet.
Initially, these tailings resulted from the mining of 16+ million tonnes of copper-silver-gold mineralization with reported historical grades of up to 10% Cu, 4 g/t Au and over 300 g/t Ag and later from the mining of 58+ million tonnes of zinc-lead-silver mineralized material with average historical grades of 7.41% Zn, 2.77% Pb and 90.33 g/t Ag.
With minimal mining costs due to surface-level material and current reprocessing capacity at adjacent plants, Cerro de Pasco’s Quiulacocha Project has the potential to be one of Peru’s key mining initiatives. According to the miner, it not only promises economic benefits but also aims to restore the environment and create employment opportunities, aligning with the local community’s needs.
