Cerro de Pasco Resources (CSE:CDPR, OTC:GPPRF) (CDPR) announced that it has strengthened its balance sheet by restructuring the liabilities of its wholly-owned subsidiary and owner of the Santander zinc-lead-silver mine in Peru, Cerro de Pasco Subsidiaria del Perú SAC.
The company said it remains optimistic about the project’s long-term prospects following a drop in the zinc price and reduced head grades at Santander’s legacy El Magistral deposit.
As part of the restructuring plan, its Santander subsidiary has applied for a Preventive Restructuring Proceeding before the Peruvian National Institute for the Defense of Competition and the Protection of Intellectual Property (INDECOPI) and, following a review, has been granted a framework to reach effective agreements with recognized creditors and ensure the long-term continuity of operations.
The plan will also allow the subsidiary to restructure payables with suppliers in a controlled and orderly way and in tandem with any potential project financing, CDPR said.
CDPR CEO Guy Goulet said now was a good moment to draw the line, agree on terms, and look ahead to a promising new beginning for Santander, which continues to carry out safe and reliable operations on a care maintenance basis.
“Santander is uniquely located with claims across one of the most prospective mineralized zones of Peru,” Goulet said. “The Pipe Project is shovel-ready and we have completed extensive due diligence with several prospective lenders.”
The CEO also highlighted that the Peruvian regulatory framework is effective for all parties in circumstances like CDPR’s and will allow it to return to profitable operations at Santander within a reasonable timeframe.
“Meanwhile, the Quiulacocha Tailings Project is also progressing well, along its own separate path,” he noted.
CDPR is a mining company with the goal of becoming the next mid-tier producer in Peru.