The Santander operation in Peru
CSE-listed Cerro de Pasco Resources (CDPR) on Monday announced that it would buy the Santander polymetallic underground mine and 2 000 t/d mill, in Peru, from TSX-listed Trevali Mining.
The transaction entails 10-million common shares of Cerro De Pasco, C$1-million in cash and a 1% net smelter return royalty on certain areas of the Santander mine site.
Trevali CEO Ricus Grimbeek said that the divesture of Santander was consistent with the company’s capital allocation strategy of focusing on corporate debt reduction and investing in the RP2.0 expansion project at Rosh Pinah, in Namibia.
For CDPR, the acquisition of a profitable mine would be transformational, CEO Guy Goulet said, stating that the mine offered material potential to grow operating cashflow and significant exploration upside.
The company planned to extend the operating life of the Magistral orebody, while developing access into the higher-grade Santander Pipe orebody over the next 24 to 36 months, which will extend the life of the mine by five years.
Furthermore, the proximity to CDPR’s El Metalurgista concession provided the company potential to use Santander infrastructure for future development, Goulet added.
Trevali’s guidance for 2021 indicates Santander will produce 50-million to 55-million pounds of payable zinc, four-million pounds of payable lead and 282 000 oz to 297 000 oz of payable silver a year at an all-in sustaining cost of $1.08/lb to $1.14/lb payable zinc.