Montreal, October 21 (Reuters/ GlobeNewswire ) – Cerro de Pasco Resources Inc. ( TSXV : CDPR | OTCQX : CDPMF | FRA : N8HP | BVL : CDPR ) indicates that its subsidiary Cerro de Pasco Resources del Per ú S.A.C. (“ CDPR Per ú”) signed a final agreement on October 20, 2026, with Activos Mineros S. A.C. (“ AMSAC ”) to acquire the tailings of Quiulacocha, including the portion located outside the company's El Metalurgista franchise area, and obtained the related surface use rights for a maximum of 30 years ( usufruct ). The company stated that this transaction gives it 100% ownership of the Quiulacocha tailings project.

The company stated that the final agreements include the "Accumulated Waste Economic Reprocessing and Transfer Contract" ( Transfer Contract ) and the "Surface Use Right Contract" ( Usufruct Contract ), both of which were signed under the framework of public auction number 001-2026- AMSAC . The company had previously announced its winning bid for this auction on October 12th. AMSAC is a state-owned company in Peru responsible for repairing environmental liabilities from historical mining activities, and it organized this auction in accordance with Supreme Decree number 013-2008- EM , which allows it to transfer the accumulated mining waste from closed mines and restoration projects to the private sector for economic utilization.

Key Points

• 100% of the rights to the tailings of Quiulacocha have now been covered by the relevant rights of CDPR.
• Approximately 123 hectares of surface use rights, with a maximum term of 30 years.
• Pay $6.65 million at the time of delivery; thereafter, pay an annual usufruct fee of $1.435 million.
• In addition, it is necessary to pay contract royalties to AMSAC.
• Next step: Submit a reprocessing application to the Ministry of Energy and Mines, followed by the first estimation of mineral resources and an environmental impact assessment.

Cerro de Pasco Resources Chief Executive Officer Guy Goulet stated: "By signing these agreements, we have secured the portion of Quiulacocha tailings that we did not previously hold. With our acquisition of the rights to the entire tailings site as well as a 30-year surface use right, the necessary certainty of ownership for the project is now in place. We would like to thank AMSAC and its sales committee for their organizational efforts throughout the process."

According to the transfer contract, CDPR Per acquired tailings with the number 6752, which are classified as mining environmental liabilities. These tailings are located within a residual area of approximately 128.07 hectares in Sim ón Bol í var in Pasco Province, Peru, and are intended for economic reprocessing. This transfer only covers the tailings themselves and does not include the land, factories, infrastructure, acidic water treatment systems, or other assets owned by AMSAC.

According to the usufruct contract, CDPR Per ú enjoys usufruct over an area of approximately 123.39 hectares within Parcel K, which is registered under the name of AMSAC with the registration number 11003003. This includes 13 existing ancillary projects, mainly comprising the main dam, and this usufruct can only be used for that specific project. CDPR Per ú is responsible for operating and maintaining these projects at their own expense. Upon the expiration of the usufruct rights, these projects, as well as any permanent projects added by CDPR Per ú, will become the property of AMSAC without any compensation. The term of this usufruct right lasts for the effective life of the project, with a maximum duration of 30 years from the date of transaction delivery, which is October 20, 2026. Within the usufruct area, 42.47 hectares overlap with the concession area of El Metalurgista, and the holder of that concession, CDPR Per ú, already has existing rights over the tailings within that area.

According to the transfer contract, CDPR Per assumes the risks regarding the existence, volume, quality, value, and recyclability of the tailings. The company has not yet established a mineral resource volume or reserves for the Quiulacocha tailings in accordance with NI 43-101 'Mining Project Disclosure Standards'.

Cerro de Pasco Resources President Manuel Rodriguez Mariategui stated: "This is a decisive moment for Cerro de Pasco Resources. After years of continuous investment, technical work, and strategic determination, we have acquired the necessary property rights and development rights to advance Quiulacocha. By combining our position in historical tailings with our 100% ownership of the El Metalurgista franchise, we are laying the foundation for a long-term recycling project. This milestone marks a fundamental shift for the company from locking in strategic assets to advancing development. We believe that Quiulacocha can become a flagship project for responsible resource recycling, environmental restoration, and creating sustainable value for shareholders and the Pasco community."

Transaction consideration and payment methods

The consideration for this transaction shall be paid in full in cash, and applicable taxes and fees must also be added. This includes the amount paid at the time of delivery, as well as the obligations that are due within the final agreement period.

After delivery, CDPR Per shall pay AMSAC an annual usufruct fee of $1.435 million per year during the term of the usufruct right, in addition to applicable taxes and fees, as well as the contract royalties described below. The consideration under the usufruct contract shall not be renegotiated due to subsequent economic, technical, environmental, or legal circumstances.

As of the date of signing the notarized transfer contract, CDPR Per shall also pay AMSAC quarterly fees related to the treatment of acidic water, in addition to a 7% management and support fee. Until AMSAC completes the hydrological and hydrogeological assessment of the tailings water, CDPR Per shall bear all the operating costs of the treatment plant. AMSAC will determine the source and volume of the water sources that need to be treated based on the assessment results, as well as the portion of the costs that should be borne by the project, and will evaluate whether compensation, deduction, or adjustment should be made to CDPR Per. Any additional costs incurred due to the project shall be borne by CDPR Per. The treatment plant will continue to be operated, managed, and controlled by AMSAC.

CDPR Per will also establish a private trust fund within 12 months after the signing of the transfer contract notarization agreement, to specifically fund social projects that benefit residents in the project's affected area. Initially, $520,000 will be invested upon the establishment of the trust; another $520,000 will be injected within 45 days after the approval of the project's environmental impact assessment ( EIA ); and from the start of the operational phase until the end of the project's validity period, an annual investment of $260,000 will be made.

Contract Royalty

The transfer contract stipulates that AMSAC will receive contract royalties for the reprocessing of tailings, regardless of whether the tailings are sold directly or sold within or outside Peru in the form of concentrate, metal, or other products after processing. The royalties are calculated on a quarterly basis and are paid in US dollars within two months after the end of each quarter, plus applicable taxes and fees. AMSAC may audit each payment.

Royalties are based on the operating profit of tailings, which is the income minus the direct costs of processing, refining, and related sales and management expenses. The applicable royalty rate increases in steps according to the operating profit margin: it starts at 1% of the income when the profit margin does not exceed 36.6%, and rises to 6% of the income when the profit margin exceeds 80%. In no quarter will the royalties be less than 1% of the income.

Although the statutory mining royalties do not apply in this case, the transfer contract still adopts a method that refers to the Peruvian mining royalties system, which is based on Law No. 28258 and its revised version under Law No. 29788 and was in effect at the time the comprehensive auction rules were approved. The contract specifies that this reference is not dynamically applied, and subsequent changes to royalty laws will not alter the contract formula. Moreover, the royalties stipulated in this contract are considered part of the consideration for the contract and are independent of the statutory mining royalties.

Before the environmental impact assessment is approved, the transfer contract does not allow for the mining, processing, sale, or removal of tailings, except for research, sampling, and mitigation measures. Therefore, no royalties will be generated until the project generates income from reprocessing.

Regulatory Matters

No referral fee is required for this transaction, and no non-independent party of the company holds any interests in AMSAC or in this transaction. This transaction still requires approval from the Toronto Venture Exchange (TSXV).

Next step

With the signing of the agreement, the project has entered the pre-production phase, which will last until the environmental impact assessment is approved. The pre-production work will begin with submitting an application for tailings reprocessing to the General Directorate of Mines of Peru's Ministry of Energy and Mining. At the same time, it will also support the first estimation of mineral resources for Quiulacocha tailings, technical research, and future environmental impact assessment submissions.

Eligible individuals

CDPR Senior Project Manager Alfonso Palacio Castilla Mr. ( MIMMM / Certified Engineer CEng ) has reviewed and approved the scientific and technical information in this press release. Palacio Mr. meets the qualifications required by NI 43-101.

Regarding Cerro, de, and Pasco Resources

Cerro de Pasco Resources Inc. Focusing on the development of its 100% owned El Metalurgista concession located in central Peru. This concession includes some of the most mineral-rich polymetallic mining areas in the Americas, with rich silver tailings and ore piles accumulated over more than a century of mining activities. The company's strategy is to recover value from the reprocessing of historical mining waste, while also addressing the long-term environmental liabilities associated with these tailings.

For more information, please visit www.pascoresources.com.

Further information

Donna Yoshimatsu, Vice President of Investor Relations

Forward-looking Statements

Some of the information contained in this document may constitute “forward-looking information” as defined by Canadian securities regulations. Generally, forward-looking information can be identified by using forward-looking language such as “plans,” “intends,” “expects,” “estimates,” “aims to,” “projects,” “believes,” “may,” “perhaps,” “is likely to,” “has arranged,” or similar expressions.

Forward-looking statements include, but are not limited to: management's judgment regarding expected transactional benefits, including the combination of the acquired rights with the mining concession; payments, royalties, costs, and contributions specified in the final agreement and their timing; the establishment and contribution of private trusts; the costs for acidic water treatment that must be paid to AMSAC; the progress of pre-production work within the company's available areas; the company's compliance with environmental and mitigation obligations under the final agreement; the timing, progress, and results of applications for reprocessing submitted to the Ministry of Energy and Mines; the preparation, submission, timing, and approval of environmental impact assessments; the advancement, timing, scope, and completion of the project work plan; the preparation and timing of the first estimate of mineral resources in the tailings Quiulacocha; approval of the transaction TSXV; and the timing, results, and impacts of licensing and regulatory procedures. This forward-looking information is based on estimates as of the date of this press release CDPR and is subject to known and unknown risks, uncertainties, and other factors that may result in significant differences between the actual results, activity levels, performance, or achievements of CDPR and those stated or implied in these forward-looking statements or information. The forward-looking information is based on management's opinions, estimates, and assumptions as of the date of this press release. These assumptions include: the company will have the funds necessary to fulfill the payments and other obligations under the final agreement; the required licenses and authorizations will be obtained within the time frame specified in the transfer contract; pre-production work can be carried out within the area of use rights and the El Metalurgista mining concession; the costs for acidic water treatment will be determined according to Annex 4 of the transfer contract, and the treatment plant will remain open to the project; and the contract royalties will be the only royalties payable for the tailings, including those located within the El Metalurgista mining concession.

Forward-looking statements are also subject to commercial and economic factors and other uncertainties, which may result in significant differences between actual results and such forward-looking statements. These include: if no reprocessing authorization is obtained within one year after the application, the transfer contract may terminate; environmental impact assessment approval must be obtained within 36 months after signing, and AMSAC may be extended for up to an additional 12 months at the discretion of the relevant parties upon request; risks related to the performance guarantees and termination clauses in the final agreement, including pre-commissioning performance guarantees and liquidated damages under the transfer contract, with payments made to AMSAC not being refundable; increased costs of acidic water treatment; delays in hydrological and hydrogeological assessments by AMSAC, or if such assessments do not reduce the cost proportion borne by CDPR Per; risks associated with limited availability of the treatment plant; the possibility that regulatory authorities may determine that statutory mining royalties apply to any part of the project, including the tailings within the El Metalurgista mining concession, and that these royalties will be levied in addition to the contractual royalties; the need for additional authorization to coordinate the rights under the El Metalurgista concession with overlapping area agreements; traffic or permit restrictions that affect pre-commissioning work; delays in obtaining permits; and other risk factors listed in the public documents of CDPR, which can be viewed on the SEDAR website at www.sedarplus.ca. There is no guarantee that these statements will necessarily be accurate, and actual results and future events may differ significantly from these expectations.

The company has not yet established mineral resource quantities or reserves for the tailings of Quiulacocha in accordance with NI 43-101. The ongoing drilling, testing, metallurgy, and related technical work are intended to support the first estimation of mineral resource quantities and future technical research; however, there is no guarantee that such estimations or research will definitely be completed, nor that even if they are completed, they will necessarily support the advancement of the project.

Although CDPR believes that the assumptions and factors on which the forward-looking statements are based are reasonable, excessive reliance should not be placed on these statements. The forward-looking information is only valid as of the date of issuance of this press release. Except as required by applicable laws, CDPR assumes no intention or obligation to update or revise any forward-looking statements due to new information, future events, or other reasons.

TSXV and its regulatory service providers (as defined by the TSXV policy) shall not be liable for the sufficiency or accuracy of this press release.

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