Cerro de Pasco Resources (CSE:CDPR, OTC:GPPRF) (CDPR) said it produced 12.1 million pounds of zinc, 874,000 pounds of lead, and 70,000 ounces of silver at its Santander Mine in Peru during the second quarter.
Mill recovery during the quarter was 93.64% for zinc and 68.61% for lead, the company said.
It also reported concentrate production of 11,508 tonnes of zinc concentrate with 47.37% grade, and 773 tonnes of lead concentrate with 51.29% grade.
CDPR said it processed an average of 61,637 tonnes of ore during 2Q, a 5% improvement over the first quarter and 96.4% more than the year-ago quarter.
It also highlighted that between January and June 2023 that it implemented an aggressive cost-reduction plan which reduced its operating costs by 30.3% over this period.
"During the quarter, zinc production from our Santander operations improved as a result of higher processed tonnes, furthermore we have achieved steady production with significant cost optimization,” CDPR chief operating officer Jorge Lozano said.
New operations plan
However, the company pointed out that from January to June 2023 the realized price of zinc fell by more than 28% due to inflationary pressures and broader market volatility.
Despite this, CDPR noted that it had secured two term sheets totalling $32.5 million in funding to execute the Santander Pipe project.
As such, while the company said it believes the macro-economic pressures on zinc price were “transient,” it is adopting a new operations plan that is expected to include the temporary curtailment of operations at Santander.
The company expects to temporarily suspend production from the Magistral area until the fourth quarter of 2023 when mining will be limited to stope areas at rates that remain profitable at a low zinc price environment.
With CDPR anticipating the processing of ore from the Pipe project from the first quarter of 2023, it said it expects the Santander Mine will return to normal milling production by the end of 2Q 2024.
“The actions taken as part of the Curtailed Operations Plan are key to ensuring the successful execution of the Santander Pipe project,” Lozano said in a statement.
“Our operational readiness and proven ability to secure term sheets demonstrate the robust economics of the Pipe project."
CDPR is a mining and resource management company, with the goal to become the next mid-tier producer of base metals in Peru.
The company is currently engaged in mining, developing and exploring its wholly-owned 6,000-hectare Santander Mine in the highly prospective Antamina-Yauricocha Skarn Corridor, located 215 kilometres from Lima.
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