A collaboration agreement between Cerro De Pasco Resources Inc (CSE: CDPR; OTCMKTS: GPPRF; FRA: N8HP) and Peruvian mining company Volcan Compania Minera S. A.A opens the first opportunity to permanently clean up a significant portion of historic mining waste – the Quiulacocha tailings – at the world-renowned Cerro de Pasco project in Peru.
A collaboration agreement between Cerro De Pasco Resources Inc (CSE: CDPR; OTCMKTS: GPPRF; FRA: N8HP) and Peruvian mining company Volcan Compania Minera S. A.A opens the first opportunity to permanently clean up a significant portion of historic mining waste – the Quiulacocha tailings – at the world-renowned Cerro de Pasco project in Peru.
The two companies have signed a Memorandum of Understanding that sets out common objectives for working together towards the first phase of development and exploration of CDPR’s Quiulacocha Tailings Project (“QT Project”). Accompanying the agreement, Volvan’s majority shareholder, Glencore International AG, will provide CDPR with a US$2 million loan to cover the costs of the first phase of the QT Project. This includes geophysical studies, a 40-hole sonic drilling program, laboratory testing, mineralogical studies, resource estimates and economic assessments. Funds will be disbursed on a milestone schedule. Repayment will be made within 12 months of commencement of commercial production.
CDPR is the current holder of the El Metalurgista concession in Peru, which grants it the right to explore and exploit the Quiulacocha Tailings in its assigned area. The enforceability of these rights has been formally confirmed by the General Mining Bureau of the Peruvian Ministry of Energy and Mines.
Figure 1: The massive dimensions of the kilometer-long Quiulacocha tailings basin in the El Metallurgista mining concession are clearly visible from a bird’s eye view. According to historical records, Quiulacocha contains mining waste from about 100 years of production – about 75 million tons.
CDPR has obtained most of the certifications and permits required to commence exploration activities on the concession, including an environmental certification and an agreement with the Quiulacocha community providing for certain surface rights. The easements also required for exploration of the concession area are being finalized and CDPR anticipates that the first phase of the QT project will commence in the coming months, coinciding with the dry season in the Peruvian Andes.
Volcan, through its wholly owned subsidiaries, owns the processing concessions at Cerro de Pasco with rights to process metallic minerals at a throughput rate of 17,500 tonnes per day at the Paragsha and San-Expedito processing plants and 2,500 TPD at the Oxides plant. These processing concessions are located in the vicinity of the concession.
The MOU calls for collaboration in several phases to achieve the objectives of both parties. In the first phase, Volcan will provide the necessary access and facilities to conduct metallurgical testing. Subsequent phases may include a partnership to develop an effective processing solution.
Guy Goulet, CEO of Cerro De Pasco Resources commented, “The MOU with Volcan sends a strong signal to all stakeholders in the Quiulacocha Tailings Project, from national and local authorities to the local community. Working with Volcan brings us closer to our main goal of leaving virtually no waste behind while economically recovering existing residual values. We look forward to working with Volcan on a shared vision of a circular economy at Cerro de Pasco.”
Nick Popovic, Head of Zinc and Copper Concentrates Marketing at Glencore stated, “The Glencore loan will help CDPR advance the exploration of QT with the goal of treating the tailings in the future. We are pleased to support CDPR in their important redevelopment project in the Cerro de Pasco area.”
Carlos Francisco Fernandez Navarro, CEO of Volcan added, “The MOU with CDPR lays the foundation for a future collaboration between CDPR’s QT material and our processing facilities that can lead to potential synergies between the two companies. We look forward to working with CDPR in their efforts to close and clean up a legacy resource while creating value for both companies and surrounding stakeholders.
Volcan Compania Minera SAA is one of the world’s largest producers of zinc, lead and silver. The company strives to maximize shareholder value through operational excellence and the highest standards of occupational safety and environmental management, and contributes to the development of its people and community.
Glencore International AG is one of the world’s largest, globally diversified natural resources companies. Through the scale and diversity of its industrial and marketing businesses, it has a responsibility to supply raw materials that are fundamental to the building blocks of life.
Cerro de Pasco Resources Inc. has for years pursued the goal of eliminating historic mining waste in the Quiulacocha tailings basin while mining one of the world’s largest surface mineral deposits using the latest techniques.
Conclusion: Finally, all parties involved around Cerro de Pasco seem to have found a common denominator. The Peruvian government is preparing the final permit for work on the Quiulacocha tailings; Cerro de Pasco will determine the resource of metal contained in the tailings pond; and Volcan/Glencore will provide the adjacent refineries for processing. If everyone works well together, there will be only winners in the end: the biggest winners would be the residents of the mining town of Cerro de Pasco, who have suffered for many years from pollution caused by mining waste. For them, the agreement now reached could become a historic date.
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