Cerro de Pasco Resources Acquires the Remaining Quiulacocha Tailings and Secures Surface Rights, Consolidating 100% of the Tailings

The agreements secure surface use for up to 30 years while adding recurring fees, treatment costs and royalty obligations.

Rhea-AI Summary

Cerro de Pasco Resources (CDPMF) consolidated rights over all Quiulacocha tailings through agreements with AMSAC that closed on October 20, 2026.

The subsidiary acquired the remaining tailings rights and secured surface use over approximately 123.39 hectares for the project's useful life, up to 30 years. Cash paid at closing totaled US$6.65 million, plus taxes. Subsequent obligations include an annual US$1.435 million surface-use fee, a contractual royalty, water-treatment costs and social-trust contributions.

The transaction remains subject to TSX Venture Exchange acceptance. Commercial reprocessing requires approval of the environmental impact assessment (EIA). Next steps include a reprocessing application to Peru's Ministry of Energy and Mines, work toward a first Mineral Resource Estimate and technical studies supporting a future EIA submission. No NI 43-101 mineral resource or reserve has been established.

3 points · 0 major

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0 major · 12 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate point100% of Quiulacocha tailings rights consolidated through definitive agreements with AMSAC, closed October 20, 2026.
• Minor pointSurface use over approximately 123.39 hectares secured for the project's useful life, up to 30 years.
• Minor point. Forward-looking: it has not happened yet and may not happen.Pre-operational plans include a reprocessing application, first Mineral Resource Estimate, technical studies and future EIA submission.

Negative

• Moderate pointUS$6,650,000 plus taxes paid at closing for the tailings transfer, surface-use premium and first annual fee. 1.9% of market cap
• Moderate point. Forward-looking: it has not happened yet and may not happen.Full plant operating costs payable pending AMSAC's water evaluation; additional project-caused costs remain the subsidiary's responsibility.
• Moderate pointTailings existence, volume, quality, value and recoverability risks rest with the subsidiary; no NI 43-101 resource or reserve established.
• Minor point. Forward-looking: it has not happened yet and may not happen.US$1,435,000 plus applicable taxes payable annually after closing throughout the surface-use term.
• Minor pointSurface-use consideration cannot be renegotiated for subsequent economic, technical, environmental or legal circumstances.

7 minor points

• Minor point. Forward-looking: it has not happened yet and may not happen.Contractual royalty payable quarterly, plus applicable taxes, with a minimum of 1% of revenue.
• Minor point. Forward-looking: it has not happened yet and may not happen.Water-treatment costs plus a 7% management charge payable quarterly from signing the transfer contract's public deed.
• Minor point. Forward-looking: it has not happened yet and may not happen.Social trust requires US$520,000 at constitution and US$520,000 within 45 days of EIA approval.
• Minor point. Forward-looking: it has not happened yet and may not happen.US$260,000 annual social-trust contributions required from operations' start throughout the project's useful life.
• Minor pointEIA approval required before exploitation, processing, sale or removal, except for studies, sampling and mitigation.
• Minor pointTSX Venture Exchange acceptance remains pending for the transaction.
• Minor point. Forward-looking: it has not happened yet and may not happen.Ancillary works require subsidiary-funded operation and maintenance; existing and added permanent works remain with AMSAC without compensation at expiry.

News Explained

Until AMSAC completes its water assessment, CDPR Perú bears the full operating cost of the treatment plant.

The transaction closed on October 20, 2026: the transfer gives CDPR Perú the tailings, not ownership of the land, plants, infrastructure or acid-water treatment systems. Separately, its usufruct covers 13 existing works, which it must operate and maintain at its own cost; those works and permanent additions revert to AMSAC without compensation when the usufruct ends.

The contractual royalty is based on operating profit, with its rate linked to operating margin: it ranges from 1% of revenue at margins of 36.6% or less to 6% at margins above 80%, and cannot be less than 1% of revenue. No royalty accrues until reprocessing generates revenue.

Until AMSAC completes its hydrological and hydrogeological evaluation, CDPR Perú pays the treatment plant’s full operating cost; the evaluation is to determine water origins and volumes attributable to the project and inform any compensation, credit or adjustment.

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MONTREAL, Oct. 21, 2026 (GLOBE NEWSWIRE) -- Cerro de Pasco Resources Inc. (TSXV CDPR | OTCQX CDPMF | FRA N8HP | BVL CDPR) ("CDPR" or the "Company") is pleased to announce that its subsidiary, Cerro de Pasco Resources del Perú S.A.C. ("CDPR Perú"), signed, on October 20, 2026, definitive agreements with Activos Mineros S.A.C. ("AMSAC") for the acquisition of the Quiulacocha tailings, including the portion located outside the Company's El Metalurgista concession, together with a surface usufruct of up to 30 years over the land associated thereto (the "Transaction"). The Transaction consolidates the rights over 100% of the Quiulacocha tailings for the Company's Quiulacocha tailings reprocessing project (the "Project").

The definitive agreements comprise the Contract for the Transfer of Accumulated Waste for its Economic Reprocessing (the "Transfer Contract") and the Surface Usufruct Contract (the "Usufruct Contract", and together with the Transfer Contract, the "Definitive Agreements"), both signed under Public Auction No. 001-2026-AMSAC (the "Auction"), which AMSAC awarded to CDPR Perú as previously announced by the Company on October 12, 2026. AMSAC, a Peruvian state-owned company responsible for the remediation of legacy mining environmental liabilities, called the Auction under Supreme Decree No. 013-2008-EM, which allows it to transfer accumulated mining waste from its closure and remediation projects to the private sector for economic use.

Highlights

• 100% of the Quiulacocha tailings now under CDPR rights
• Surface usufruct over approximately 123 hectares for up to 30 years
• US$6.65 million paid at Closing; US$1.435 million annual usufruct fee thereafter
• Contractual royalty payable to AMSAC, as described below
• Social trust of US$1.04 million upfront and US$260,000 per year during operations
• Next step: reprocessing application to the Ministry of Energy and Mines, then a first Mineral Resource Estimate and the EIA
  
  

Guy Goulet, CEO of Cerro de Pasco Resources, commented:

"Signing these agreements secures the part of the Quiulacocha tailings that we did not yet hold. With rights over the entire tailings and a 30-year usufruct over the land, we have the certainty of tenure the Project needs. We thank AMSAC and its Sale Committee for the conduct of the process."

Assets Acquired

Under the Transfer Contract, CDPR Perú acquired the Quiulacocha tailings, identified as mining environmental liability ID No. 6752, over a residue area of approximately 128.07 hectares in the district of Simón Bolívar, province and department of Pasco (the "Residues Area"), for its economic reprocessing. The transfer covers the tailings only, and excludes the land, plants, infrastructure, acid water treatment systems and other assets owned by AMSAC.

Under the Usufruct Contract, CDPR Perú holds a usufruct over approximately 123.39 hectares within Parcel K, a property of AMSAC registered under entry No. 11003003 (the "Usufruct Area"), including 13 existing ancillary works, among them the main dike, to be used exclusively for the Project. CDPR Perú operates and maintains the works at its own cost, which at the end of the usufruct will remain with AMSAC, together with any permanent works added by CDPR Perú, without compensation. The usufruct runs for the useful life of the Project, up to a maximum of 30 years from the closing of the Transaction, which took place on October 20, 2026 (the “Closing”). Of the Usufruct Area, 42.47 hectares overlap with the El Metalurgista concession, whose holder, CDPR Perú, has pre-existing rights over the tailings within its area. Figure 1 shows the Residues Area with the El Metalurgista concession overlaid, and Figure 2 shows the Usufruct Area.

Figure1. Tailings Residues Area with the overlay of the El Metalurgista concession

Figure 2. Usufruct area

Under the Transfer Contract, CDPR Perú bears the risk of the existence, volume, quality, value and recoverability of the tailings. The Company has not established a mineral resource or mineral reserve for the Quiulacocha tailings in accordance with National Instrument 43-101 respecting Standards of Disclosure for Mineral Projects (NI 43-101).

Manuel Rodriguez Mariategui, President of Cerro de Pasco Resources, commented:

"This is a defining moment for Cerro de Pasco Resources. After years of sustained investment, technical work and strategic determination, we have brought together the property and development rights required to advance Quiulacocha. By consolidating our position across the historic tailings and our 100%-owned El Metalurgista concession, we are laying the foundation for a long-term reprocessing project. This milestone marks a fundamental transition for our Company, from securing strategic assets to advancing their development. We believe Quiulacocha can become a flagship project for responsible resource recovery, environmental remediation and sustainable value creation for our shareholders and the communities of Pasco."

Consideration and Method of Payment

The consideration for the Transaction is payable entirely in cash, plus applicable taxes, and comprises the following amounts paid at Closing as well as obligations payable during the term of the Definitive Agreements:

Item	Amount (US$, plus taxes)	Agreement
Transfer price, single payment	3,780,000	Transfer Contract
Usufruct premium, final, non-refundable and not adjustable	1,435,000	Usufruct Contract
First annual usufruct fee	1,435,000	Usufruct Contract
Total paid at Closing	6,650,000

Following Closing, CDPR Perú will pay AMSAC the annual usufruct fee of US$1,435,000, plus applicable taxes, each year for the term of the usufruct, and the contractual royalty described below. The consideration under the Usufruct Contract is not subject to renegotiation for supervening economic, technical, environmental or legal circumstances.

From signing of the public deed of the Transfer Contract, CDPR Perú will also pay AMSAC, each quarter, the cost of treating the acid water linked to the Project at AMSAC's acid water treatment plant, plus a charge of 7% for AMSAC's management and support activities. Until AMSAC has completed a hydrological and hydrogeological evaluation of the water inflows to the tailings, which it will carry out as soon as technically possible, CDPR Perú will pay the full operating cost of the plant. AMSAC will use the results of that evaluation to determine the origin and volume of the water that requires treatment and the portion of the cost that corresponds to the Project, and to evaluate any compensation, credit or adjustment in favour of CDPR Perú. Any additional cost caused by the Project will be borne by CDPR Perú. The plant remains under AMSAC's operation, administration and control.

CDPR Perú will also fund a private trust to be constituted within 12 months of signing of the public deed of the Transfer Contract to finance social projects exclusively for the benefit of the populations of the Project's area of influence. The trust will receive a first contribution of US$520,000 at its constitution, a second contribution of US$520,000 within 45 days of approval of the Project's environmental impact assessment, the environmental management instrument required for the Project (the “EIA”), and annual contributions of US$260,000 from the start of the operation phase and for the useful life of the Project.

Contractual Royalty

The Transfer Contract provides for a contractual royalty in favour of AMSAC on the reprocessing of the tailings, whether the tailings are sold as they are or treated and sold as concentrates, metals or other products, in Peru or abroad. The royalty is calculated each calendar quarter and paid in US dollars, plus applicable taxes, within two months after the end of the quarter. AMSAC may audit each payment.

The royalty is based on the operating profit from the tailings, meaning revenue less the direct costs of treatment, processing and refining and the selling and administrative expenses attributable to that revenue. The rate applied to operating profit rises with the operating margin on a sliding scale, from 1% of revenue at margins of 36.6% or less to 6% at margins above 80% (see Figure 3). In any quarter, the royalty will not be less than 1% of revenue.

Figure 3. Effective rate of contractual royalty in terms of operating margin

Even though a statutory mining royalty is not applicable in this case, the Transfer Contract nevertheless includes a methodology that takes as its reference Peru's mining royalty regime under Law No. 28258, as amended by Law No. 29788, in force when the integrated auction rules were approved. The Transfer Contract states that this reference is not dynamic, so later changes to the royalty law do not modify the contractual formula, and that the contractual royalty is a contractual consideration distinct from the statutory mining royalty.

The Transfer Contract does not permit the exploitation, processing, sale or removal of the tailings before approval of the EIA, other than for studies, sampling and mitigation. No royalties will therefore accrue until the Project generates revenue from reprocessing.

Regulatory Matters

No finder's fee is payable in connection with the Transaction, and no non-arm's length party of the Company has an interest in AMSAC or in the Transaction. The Transaction remains subject to the acceptance of the TSX Venture Exchange (the "TSXV").

Next Steps

With the agreements signed, the Project enters its pre-operational phase, which runs until approval of the EIA. The pre-operational work begins with the application for the reprocessing of the tailings to the General Directorate of Mining of the Ministry of Energy and Mines, and is also intended to support a first Mineral Resource Estimate for the Quiulacocha tailings, technical studies, and future submission of the EIA.

Qualified Person

Mr. Alfonso Palacio Castilla, MIMMM / Chartered Engineer (CEng) and Senior Project Manager for CDPR, has reviewed and approved the scientific and technical information contained in this news release. Mr. Palacio is a Qualified Person for the purposes of reporting in compliance with NI 43-101.

About Cerro de Pasco Resources

Cerro de Pasco Resources Inc. is focused on developing its 100%-owned El Metalurgista concession in central Peru, which hosts silver-rich tailings and stockpiles accumulated over more than a century of mining in one of the most prolific polymetallic districts in the Americas. The Company's strategy is to reprocess historic mining waste to recover value while addressing the long-term environmental liabilities associated with these tailings.

For more information, please visit www.pascoresources.com.

Further Information

Donna Yoshimatsu, VP Investor Relations
Mobile: +1 416-722-2456
Email: dyoshi@pascoresources.com

Forward-Looking Statements

Certain information contained herein may constitute "forward-looking information" under Canadian securities legislation. Generally, forward-looking information can be identified using forward-looking terminology such as "plans", "seeks", "expects", "estimates", "intends", "anticipates", "believes", "could", "might", "likely", "scheduled" or variations of such words or statements that certain actions, events or results "may", "will", "could", "would", "might", "will be taken", "occur", "be achieved" or other similar expressions.

Forward-looking statements, including the expectations of CDPR's management regarding the expected benefits of the Transaction, including the combination of the rights acquired with the El Metalurgista mining concession; the payments, royalty, costs and contributions provided for in the Definitive Agreements, and the timing thereof; the constitution of, and the contributions to, the private trust; the cost of acid water treatment payable to AMSAC; the conduct of the pre-operational work within the areas available to the Company; the Company's compliance with its environmental and mitigation obligations under the Definitive Agreements; the filing, timing and outcome of the reprocessing application before the Ministry of Energy and Mines; the preparation, submission, timing and approval of the EIA; the advancement, timing, scope and completion of work programs at the Project; the preparation and timing of a first Mineral Resource Estimate for the Quiulacocha tailings; the approval of the Transaction by the TSXV; and the timing, outcome and impact of permitting and regulatory processes, are based on CDPR's estimates and are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of CDPR to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Forward-looking information is based on the opinions, estimates and assumptions of management as of the date of this news release. These assumptions include that the Company will have the funds required for its payment and other obligations under the Definitive Agreements; that the required permits and authorizations will be obtained within the periods set by the Transfer Contract; that the pre-operational work can be carried out within the Usufruct Area and the El Metalurgista mining concession; that the cost of acid water treatment will be determined under Annex 4 of the Transfer Contract and that the plant will remain available to the Project; and that the contractual royalty will be the only royalty payable on the tailings, including those located within the El Metalurgista mining concession.

Forward-looking statements are subject to business and economic factors and uncertainties and other factors that could cause actual results to differ materially from these forward-looking statements, including the risk of termination of the Transfer Contract if the reprocessing authorization is not obtained within one year of the application; the requirement to obtain approval of the EIA within 36 months of signing, which AMSAC may extend at its discretion by up to 12 months on request; risks related to the guarantee-enforcement and termination provisions of the Definitive Agreements, including the pre-operational performance guarantee and the penalties under the Transfer Contract, under which amounts paid to AMSAC are not refundable; the risk of increases in the cost of acid water treatment, delays in AMSAC's hydrological and hydrogeological evaluation or an outcome of that evaluation that does not reduce the portion of the cost borne by CDPR Perú, and restrictions on the availability of the plant; a determination by the competent authorities that the statutory mining royalty applies to any part of the Project, including tailings located within the El Metalurgista mining concession, in addition to the contractual royalty; additional authorizations required to coordinate the rights under the El Metalurgista concession with the agreements over the overlapping area; access or permit restrictions affecting the pre-operational work; delays in permitting; and the risk factors set out in CDPR's public documents, available on SEDAR+ at www.sedarplus.ca. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

The Company has not established a mineral resource or mineral reserve for the Quiulacocha tailings in accordance with NI 43-101 respecting Standards of Disclosure for Mineral Projects. Ongoing drilling, assay, metallurgical and related technical work are intended to support a first Mineral Resource Estimate and future technical studies; there can be no assurance that any such estimate or study will be completed or, if completed, that it will support the advancement of the Project.

Although CDPR believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements and forward-looking information. Forward-looking information is provided as of the date of this news release. Except where required by applicable law, CDPR disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.

Photos accompanying this announcement are available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/b70e6194-f4fa-43b6-817f-1899b37aa70c
https://www.globenewswire.com/NewsRoom/AttachmentNg/c752c2b3-b452-4837-b2cd-a03f227dcd8d
https://www.globenewswire.com/NewsRoom/AttachmentNg/f042f2ee-9ff8-477a-ba7f-9aeb82e30053

This press release was published by a CLEAR® Verified individual.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What did Cerro de Pasco Resources acquire in the Quiulacocha transaction?

Cerro de Pasco Resources consolidated rights over 100% of the Quiulacocha tailings and secured surface use for the project's useful life, up to 30 years. The transfer covers tailings across approximately 128.07 hectares, but excludes land, plants, infrastructure, acid water treatment systems and other AMSAC-owned assets. The separate surface-use agreement includes 13 existing ancillary works.

How is Cerro de Pasco Resources' Quiulacocha royalty calculated?

The contractual royalty uses operating profit and a sliding scale linked to operating margin, with a quarterly minimum of 1% of revenue. Operating profit deducts direct treatment, processing and refining costs and attributable selling and administrative expenses from revenue. Payment is due within two months after each quarter, and AMSAC may audit it. Later royalty-law changes do not alter the contractual formula.

Can Cerro de Pasco Resources receive adjustments to Quiulacocha water-treatment costs?

AMSAC's hydrological and hydrogeological evaluation will determine the project's share of treatment costs and evaluate any compensation, credit or adjustment in the subsidiary's favor. Until that evaluation, the subsidiary pays the plant's full operating cost. AMSAC retains operation, administration and control of the plant.

When must Cerro de Pasco Resources establish the Quiulacocha social trust?

The private trust must be constituted within 12 months of signing the transfer contract's public deed. It will finance social projects exclusively for populations in the project's area of influence. Contributions comprise US$520,000 at constitution, US$520,000 within 45 days of EIA approval and US$260,000 annually from operations' start throughout the project's useful life.