Pasco Resources’ Quiulacocha tailings facility and the Excelsior Stockpile, on the right, in Cerro de Pasco, Peru. Credit: Blair McBride
CERRO DE PASCO, PERU — Standing on a hilltop over central Peru’s Cerro De Pasco at 4,300 metres above sea level, two sites are visible that show the mining city’s past and potential future.
On the left is a gaping open pit where silver, gold, copper and zinc have been mined since the 17th century and around which the city grew. On the right, and further away, is a lake and hill where Quebec-based Cerro de Pasco Resources (TSXV: CDPR; US-OTC: GPPRF) might mine historic tailings while restoring the environment at its El Metalurgista project. The city is located in the central Andes, 250 km northeast of the capital Lima.
“We’re not only doing business here in Peru but also cleaning the environment,” Manuel Rodriguez, Pasco’s executive director and president, told The Northern Miner during a June site visit. “It’s a large liability. It’s a very contaminated city, a very poor city where the communities expect this mining [to continue].”
Watch a video of the site visit
Local communities expect and rely on responsible mining activities not only to drive economic opportunity, but also to ensure a cleaner, more sustainable future for the region, the company says.
Last August, the Peru government granted Eric Sprott-backed Pasco a permit to explore and mine tailings there – the first time in Peru that the government has classified a tailings site as an exploration project. Pasco’s potential mining of the site would continue the city’s circular mining economy and take it in a greener direction.
Pasco shares rose 8.5% to close at 44¢ apiece in Toronto, for a market capitalization of C$228.25 million. Earlier the stock hit an almost-five-year high of 45¢ in intraday trading.
Decades of tailings
El Metalurgista comprises two sites just southwest of the city. Its Excelsior stockpile hosts more than 70 million tonnes, of which 30.1 million tonnes sits inside the El Metalurgista concession, according to an initial resource from 2020. The stockpile grades at 44 grams silver per tonne, 1.5% zinc and 0.6% lead for 42.9 million oz. contained silver, 437,000 tonnes zinc and 184,000 tonnes lead.
After a lunch of local trout and giant cobs of corn that provided needed energy for walking around the site amid the low-oxygen air, Pasco’s senior project manager Alfonso Palacio Castilla gestured at a grassy hill.
The 679,200-sq.-metre Excelsior stockpile, now remediated and covered in a geo-membrane, topsoil and vegetation, comprises ore mined from 1952 to 1996.
“[But] the material buried under the cover is still…generating acid mining drainage, so this cover isn’t the ideal closure plan,” Castilla said. “The plan is to reprocess this material, muck it out with heavy machinery and take it to the plant.”
Next to Excelsior is the 1.15-sq.-km Quiulacocha site, which comprises tailings deposited from the early 1900s to 1992. About two-thirds of it looks like grey mud, and the rest is a lake, turned brownish-red from tailings leaching. Quiulacocha hosts more than 70 million tonnes of tailings grading 1.6% copper, 1.3% lead, 1.2 grams gold and 57.9 grams silver for estimated contained metal of 1.25 million tonnes zinc, 632,000 tonnes gold, 115 million oz. silver, 262,000 tonnes of copper and 770,000 tonnes lead, according to an historic resource.
High-grade tailings
Pasco is conducting a two-stage drill program to support a resource for Quiulacocha. Between August and November last year, crews completed the first stage of 927 metres across 40 holes.
Highlight hole SPT1_4 cut 25 metres from surface grading 53 grams silver, 1.46% zinc, 1.22% lead and 92 grams gallium – an important energy transition metal for its use in semiconductors, LED lights and solar panels.
SPT1_5 cut the same width at 54.06 grams silver, 1.65% zinc, 1.23% lead and 79.81 grams gallium from surface. The first eight metres of both holes returned 141 grams gallium and 115 grams gallium, respectively, the company said.
The second, 80-hole stage of more than 3,000 metres is to start imminently. Like the first stage, it will use sonic drills, better suited for penetrating tailings slurry and down to hard rock than rotary or diamond drilling.
The Quiulacocha resource is targeted for release in the second half of 2026, to be incorporated into a pre-feasibility study, with a feasibility study to follow in about two years, Rodriguez said. Though production would be further down the road, Pasco plans to start producing first at Quiulacocha before determining a timeline for Excelsior’s development.
The company is funded for its activities through to the PFS. Eric Sprott, who invested C$5 million in Pasco last November, holds 16.6% of its shares.
Mining the slurry
Pasco envisions recovering tailings from Quiulacocha using a pump mounted under a floating barge which will suck up the slurry and deliver it to a processing plant through a pipeline. That approach removes the need to use heavy machinery, haul trucks, explosives and roads to move tailings, reducing environmental impacts.
The associated costs of such an operation are much lower than at a conventional mine, Rodriguez explained.
“When you look at an economic evaluation, if you have $130 per tonne for net smelter return, you will have $40 to $50 mining costs in dollars per tonne. In this case, you have $1 or $2 [because] the mining has already been done.”
But he noted that recoveries are also low, since Quiulacocha isn’t a primary ore site. The company is working to increase recoveries through ongoing metallurgical testing that will be part of the PFS.
And while mining the tailings looks straightforward on paper, with manageable costs, the scale of the cleanup task given to Pasco by the Peruvian government is large, Rodriguez said.
“Shareholders and the market are really looking forward [to developing] this,” he said. “It’s been such a long time and it took so many years and challenges. And in August, we finally got a permit, and so that was really game changing.”
