Mr. Guy Goulet reports

CERRO DE PASCO RESOURCES CLOSES A SUBSCRIPTION RECEIPT AND PRIVATE PLACEMENT FOR A TOTAL OF $2,845,000

Further to its news release of March 22, 2024, Cerro de Pasco Resources Inc. has closed a second tranche of its previously announced non-brokered private placement offering of subscription receipts to cover the fee payable in relation to the legal easement. Upon publication of the supreme resolution granting the easement, Cerro de Pasco Resources will pay 3,647,402.44 sol, or approximately $1.35-million, to a specific bank account of Banco de la Nacion. The two-year easement will provide Cerro de Pasco Resources with access to the surface areas corresponding to its El Metalurgista concession and the Quiulacocha tailings project, enabling the corporation to initiate its 40-hole drilling campaign.

Granting of easement timeline

The change of Minister of Energy and Mines in February, together with normal process clarifications, resulted in a temporary delay in the continuing procedures. At this time, Cerro de Pasco Resources is not aware of any additional requirement that should be met for the granting of the easement and no further delays are expected. Cerro de Pasco Resources has fulfilled all the legal requirements set forth by Peruvian law for those purposes. With the minister himself reiterating full support, the signature of the supreme resolution is expected imminently.

Background

Cerro de Pasco Resources is the titleholder of the El Metalurgista concession, located in Peru, 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 the Peruvian Ministry of Energy and Mines.

The Quiulacocha tailings

The Quiulacocha tailings storage facility covers approximately 115 hectares and is estimated to hold approximately 75 million tonnes of tailings deposited from the 1920s to 1990s.

The Quiulacocha tailings storage facility comprises processing residues that came from the Cerro de Pasco open-pit and underground mine. Initially, these tailings resulted from the mining of copper-silver-gold mineralization, with reported historical grades of up to 10 per cent copper, four grams per tonne gold and over 300 grams per tonne silver, and later from the mining of zinc-lead-silver mineralized material with average historical grades of 7.41 per cent zinc, 2.77 per cent lead and 90.33 grams per tonne silver.

The most recent historical mineral resource estimate for the Quiulacocha tailings, prepared by J.A. Brophy in 2012, contained 7.4 million tonnes at 1.35 per cent to 1.55 per cent zinc, 0.55 per cent to 1.00 per cent lead and 1.20 ounces per ton to 1.35 ounces per ton silver. This estimate was based on a shallow surface auger sampling program, which is estimated to represent only 10 per cent of the expected tonnes of the tailings. Historical mineral estimates are historical in nature and cannot be relied upon for economic evaluations.

Second-tranche financing of subscription receipts

Under the second tranche, the corporation has sold 10.15 million subscription receipts of the corporation at a price of 10 cents per subscription receipt for aggregate gross proceeds of $1,015,000. In total, the corporation raised aggregate gross proceeds of $2.56-million and issued 25.6 million subscription receipts. The funds are held in escrow until the release conditions have been satisfied, namely: (i) the corporation has received subscriptions under the offering for a minimum amount of $1-million (U.S.); (ii) issuance of the supreme resolution, whereby the Peruvian Ministry of Energy and Mines grants and/or acknowledges the corporation's legal easement over certain surface areas owned by Activos Mineros SAC, allowing the corporation to conduct mining activities in the El Metalurgista mining concession; and (iii) notification to the corporation of the issuance of the supreme resolution.

Upon the satisfaction of the release conditions, each subscription receipt will automatically be converted into a unit of the corporation. Each unit will consist of: (i) one common share in the capital of the corporation; and (ii) one-half of one unit purchase warrant. Each warrant shall entitle the holder thereof to acquire one additional unit at a price of 15 cents per warrant unit until the earlier of the date which is 24 months after the issue date of the warrants and, if applicable, the accelerated expiry date (as defined hereinafter). Each warrant unit shall consist of: (i) one additional share; and (ii) one additional share purchase warrant. Each underlying warrant shall entitle the holder thereof to acquire one additional share at a price of 25 cents per underlying warrant share until the expiry date.

In the event that, during the 24-month period following the issue date of the warrants, the volume-weighted average trading price of the shares exceeds 60 cents per share for any period of 20 consecutive trading days, the corporation may, at its option, following such 20-day period, accelerate the expiry date of the warrants by delivery of a notice to the registered holders thereof and issuing a press release, and, in such case, the expiry date of the warrants shall be deemed to be 5 p.m. Montreal time on the 30th day following the later of: (i) the date on which the acceleration notice is sent to warrantholders; and (ii) the date of issuance of the warrant acceleration press release.

Private placement for short-term working capital

The corporation has closed a non-brokered private placement for total gross proceeds of $285,000 through the issuance of 2.85 million units of the corporation at a price of 10 cents per unit.

Each unit comprises one share and half of one warrant. Each whole warrant entitles the holder thereof to purchase one warrant unit at a price of 15 cents per warrant unit until the earlier of March 28, 2026, and, if applicable, the accelerated expiry date (as defined as defined herein). Each warrant unit will consist of: (i) one additional share; and (ii) one underlying warrant. Each underlying warrant will entitle the holder thereof to acquire one underlying warrant share at a price of 25 cents per underlying warrant share until March 28, 2026, subject to acceleration of the expiry date as mentioned herein.

In connection with the unit offering, the corporation paid finders' fees of $17,500 and issued 175,000 warrants to arm's-length third parties that assisted the corporation by introducing subscribers to the unit offering.

The corporation intends to use the net proceeds of the unit offering for general working capital purposes.

All securities issued in connection with the unit offering are subject to a statutory hold period in accordance with applicable securities laws, expiring four months and one day from the issue date of the units.

Technical information

Jorge Lozano, MMSAQP, chief operating officer for Cerro de Pasco Resources, has reviewed and approved the scientific and technical information contained in this news release. Mr. Lozano is a qualified person for the purposes of reporting in compliance with National Instrument 43-101, Standards of Disclosure for Mineral Projects.

About Cerro de Pasco Resources Inc.

Cerro de Pasco Resources is a mining company, with the goal to become the next mid-tier producer in Peru. Cerro de Pasco Resources is focused on the development of its principal 100-per-cent-owned asset, the El Metalurgista mining concession, comprising mineral tailings and stockpiles extracted from the Cerro de Pasco open-pit mine in central Peru. The company's approach at El Metalurgista entails the reprocessing and environmental remediation of mining waste and the creation of numerous opportunities in a circular economy. Cerro de Pasco Resources is also focused on mining, development and exploration of its wholly owned, 6,000-hectare Santander mine in the highly prospective Antamina-Yauricocha skarn corridor, located 215 kilometres from Lima. Cerro de Pasco Resources was founded on clear objectives -- to engender long-term economic sustainability and benefit for the local population, from an economic, social and health point of view.

We seek Safe Harbor.