Reports indicate an estimated 458 million ounces (moz) of silver equivalent across silver, zinc, copper, lead and gold within the tailings. Credit: RHJPhtotos/Shutterstock.

Canadian investor Eric Sprott has acquired a stake in Cerro de Pasco Resources (CDPR), a mining company in Peru, in a non-brokered private placement.

Sprott bought 20 million units and 17 million common shares from an existing shareholder, thus gaining approximately 9% of the company’s outstanding common shares on a non-diluted basis and 13.3% on a partially diluted basis.

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The private placement concluded with total aggregate gross proceeds of $3.3m (C$4.5m).

Sprott’s acquisition was made through 2176423 Ontario, a corporation beneficially owned by him. The deal involved the issuance of 32,980,000 units at $0.10 per unit, each consisting of one common share and one common share purchase warrant.

According to CDPR, the net proceeds from the offering will be used for drilling and general working capital needs.

The securities acquired by Sprott were for investment purposes, and he may consider adjusting his beneficial ownership in the future based on various factors including market conditions and business opportunities.

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Securities issued in connection with the offering are subject to a statutory hold period ending four months and one day from the date of their issuance, in accordance with applicable securities laws.

CDPR holds the El Metalurgista concession in Peru, which grants it the right to explore and exploit the Quiulacocha tailings.

The Quiulacocha Tailings Storage Facility covers approximately 115 hectares and is estimated to hold around 75 million tonnes of material processed from the 1920s to 1990s.

Reports indicate an estimated 458moz of silver equivalent across silver, zinc, copper, lead and gold within the tailings.

The enforceability of CDPR’s rights has been confirmed by the General Mining Bureau of the Peruvian Ministry of Energy and Mines.

Cerro de Pasco CEO Guy Goulet said: “We are pleased to close this critical funding round and in parallel delighted to welcome Sprott as an investor into Cerro de Pasco Resources.

“We look forward to moving ahead with drilling activities at the Quiulacocha Tailings Project in late July, with the objective of producing a master plan for reprocessing the entire Quiulacocha tailings resource.”