Cerro de Pasco Resources has entered into a project development agreement with the U.S. International Development Finance Corporation (DFC) for the Quiulacocha Tailings Reprocessing Project in Peru. The agreement initially provides Cerro de Pasco Resources (TSXV: CDPR; Frankfurt: N8HP; WKN: A2N7XK) with access to up to $5 million in milestone-based project financing while opening the prospect of significantly larger construction financing.

According to the company, the DFC—the U.S. government’s development finance institution—is providing the funds to advance key development work on the project. In parallel, the agency is evaluating the possibility of providing a long-term direct loan of up to $300 million for the construction of Quiulacocha in the future. However, such financing is subject to several conditions and is not guaranteed.

Cerro de Pasco Resources Secures Funds for Project Development

The agreement provides Cerro de Pasco Resources with structured financing for the next phase of project development. The up to $5 million will be disbursed in tranches tied to defined technical milestones.

The Quiulacocha project is considered one of the largest historical tailings resources worldwide. The initiative focuses on reprocessing old mining waste in the traditional Peruvian mining district of Cerro de Pasco. The objective is to recover multiple commodities:

• Silver
• various base metals
• Gallium
• Indium

While silver and base metals represent the traditional mining aspect, gallium and indium are increasingly becoming the focus of strategic resource supply. Both metals are used in semiconductors, energy systems, and defense applications, among others.

The involvement of the DFC underscores the growing importance of secure supply chains for critical minerals. At the same time, Cerro de Pasco Resources emphasizes that the financing is strictly tied to project progress.

Scope of Development Work on the Quiulacocha Project

Under the agreement, Cerro de Pasco Resources commits to implementing a series of clearly defined project development activities. This so-called “PD Activity” includes in particular:

• sonic drilling programs
• geotechnical drilling
• hydrogeological studies
• preparation of a feasibility study
• engineering work
• development of a comprehensive Environmental and Social Impact Assessment (ESIA)

The DFC finances selected components of this work. Importantly, for the funded workstreams, Cerro de Pasco Resources must contribute equity capital at a 1:1 ratio. This matching model increases the company’s capital participation in project development.

Disbursements are made as reimbursable amounts tied to specific technical deliverables. Should the project achieve qualifying financing within the agreed timeframe, the DFC is entitled to repayment of the development amounts provided according to the contract terms and retains certain financing rights.

Option for Major Financing Through the DFC

In addition to the immediate development financing, the agreement contains a further option: the DFC is evaluating possible long-term project financing of up to $300 million for the construction of the facility in Peru.

However, this potential financing is subject to several conditions, including:

• successful completion of development work
• satisfactory due diligence review
• internal credit approvals by the DFC
• execution of binding financing documents

Cerro de Pasco Resources explicitly emphasizes that there is no guarantee of future loan approval. Nevertheless, the agreement creates an institutional framework within which potential construction financing can be evaluated.

Executive Chairman Steven Zadka described the agreement as an important step for the company and the Quiulacocha project. He noted that few mining development projects receive direct support through a structured U.S. government institution. He also highlighted the recently intensified cooperation between the United States and Peru in securing responsible mineral supply chains.

Strategic Significance of Quiulacocha

For Cerro de Pasco Resources, Quiulacocha combines several areas: the economic utilization of historical tailings, the recovery of precious and base metals, and the potential production of strategic technology metals. At the same time, the project has an environmental component, as the reprocessing of mining waste is often accompanied by remediation measures.

The development facility now agreed upon initially provides the financial resources to advance key fundamentals such as the feasibility study, engineering, and environmental review. These steps are typically considered prerequisites for larger project financing in the industry.

With the DFC’s involvement, the Quiulacocha project by Cerro de Pasco Resources receives an institutional structure for the next development phase. Whether this actually results in comprehensive construction financing will likely depend significantly on the results of the upcoming technical programs and review processes.