Cerro de Pasco Resources Inc — Management Reports 2020

May 6, 2020

CERRO DE PASCO RESOURCES INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

Year ended December 31, 2019 (Fourth Quarter)

This management discussion and analysis ("MD&A") of Cerro de Pasco Resources Inc.., ("Cerro de Pasco Resources" or "CDPR" or the "Company") (formerly known as Genius Properties Ltd.) follows rule 51-102 of the Canadian Securities Administrators regarding continuous disclosure.

The following MD&A is a narrative explanation, through the eyes of the management of Cerro de Pasco Resources, on how the Company performed during the three-month period and year ended December 31, 2019. It includes a review of the Company's financial condition and a review of operations for the three-month period and year ended December 31, 2019 as compared to the three-month period and year ended December 31, 2018.

This MD&A complements the audited consolidated financial statements for the year ended December 31, 2019 but does not form part of them. It is intended to help the reader understand and assess the significant trends, risks and uncertainties related to the results of operations and it should be read in conjunction with the audited annual consolidated financial statements as at December 31, 2019 and related notes thereto.

The audited consolidated financial statements for the years and year ended December 31, 2019 and 2018 have been prepared in accordance with the International Financial Reporting Standards ("IFRS") applicable to the preparation of annual consolidated financial statements. The accounting policies applied in the financial statements are based on IFRS issued and effective as at December 31, 2019. On May 5, 2020, the Board of Directors approved, for issuance, the condensed annual consolidated financial statements.

All figures are in Canadian dollars unless otherwise stated. Additional information relating to the Company can be found on SEDAR at www.sedar.com. The shares of Cerro de Pasco Resources are listed on the Canadian Securities Exchange ("CSE") under the symbol "CDPR".

REPORT'S DATE

The MD&A was prepared with the information available as at May 5, 2020.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

This MD&A contains forward-looking statements that are based on the Company's expectations, estimates and projections regarding its business, the mining industry in general and the economic environment in which it operates as of the date of the MD&A. To the extent that any statements in this document contain information that is not historical, the statements are essentially forward-looking and are often identified by words such as "anticipate", "expect", "estimate", "intend", "project", "plan" and "believe". In the interest of providing shareholders and potential investors with information regarding Cerro de Pasco Resources, including management's assessment of future plans and operations, certain statements in this MD&A are forward-looking and are subject to the risks, uncertainties and other important factors that could cause the Company's actual performance to differ materially from that expressed in or implied by such statements. Such factors include, but are not limited to: volatility and sensitivity to market metal prices, impact of change in foreign currency exchange rates and interest rates, imprecision in reserve estimates, environmental risks including increased regulatory burdens, unexpected geological conditions, adverse mining conditions, changes in government regulations and policies, including laws and policies; and failure to obtain necessary permits and approvals from government authorities, and other development and operating risks. The preliminary assessments contained in the Technical Report referred to in this MD&A, and the estimates contained therein to date are preliminary in nature and are based on a number of assumptions, any one of which, if incorrect, could materially change the projected outcome.

Although the Company believes that the expectations conveyed by the forward-looking statements are based upon information available on the date that such statements were made, there can be no assurance that such expectations will prove to be correct. The reader is cautioned not to rely on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements unless required to do so by applicable Securities laws. All subsequent forward-looking statements, whether written or orally attributable to the Company or persons acting on its behalf, are expressly qualified in their entirety by these cautionary statements.

NATURE OF ACTIVITIES

Cerro de Pasco Resources Inc. and its subsidiaries (hereafter the "Company" or "Cerro de Pasco Resources" or "CDPR") is a resource management company attuned to the most demanding environmental, social and legal compliance required by global institutions and investors. The key strategic strength of the Company is an unparalleled knowledge of the challenges and opportunities presented by the minerals endowment within the city of Cerro de Pasco combined with a highly experienced and practical team of both Peruvian and international management. The key focus of the Company will be on developing the El Metalurgista mining concession using world class geo-resource and industrial development solutions in order to secure long-term economic operational sustainability in harmony with a healthy and prosperous local population. The plan of the Company is to reprocess tailings and stockpiles at the Quiulacocha and Cerro de Pasco sites and also to revive and modernize all existing installations at the mining complex the "Project" or "Quiulacocha Project"

BUSINESS DEVELOPMENT HIGHLIGHTS

Community Relations

On October 17, 2019, the Company signed a Definitive Agreement with the Quiulacocha Rural Community.

The Agreement provides CDPR with rights of use over 77.54 ha. held by the Quiulacocha Rural Community for developing the Quiulacocha Project, and the "social license" to develop exploration and reuse activities within the Quiulacocha tailings, located within and beyond the El Metalurgista concession. In addition, the Community will help CDPR to attain all the necessary authorizations from the mining authority for developing the Quiulacocha Project.

Furthermore, the Agreement sets out guidelines under which the Community and CDPR will join forces to take forward the environmental remediation measures which will apply once the Quiulacocha Project starts.

Benefits include an increase of local employment, special royalties for the Community and a new source of revenue for the Central, Regional and Local governments, which can be reinvested in works that benefit the entire population.

Transaction with Volcan Compañia Minera S.A.A.

On November 27, 2019, the Company has executed a definitive share purchase agreement with Volcan Compañia Minera S.A.A. and its subsidiaries (collectively, "Volcan"), whereby CDPR will acquire all of the issued shares of Oxidos de Pasco S.A.C. ("Oxidos"), Empresa Administradora de Cerro S.A.C ("Cerro SAC") and Remediadora Ambiental S.A.C. (together the "Target Companies"). The arm's length transaction (the "Transaction") will provide CDPR ownership and operation of all mining and processing assets in Cerro de Pasco, Central Peru.

Under the terms of the Agreement, 100% of the Target Companies' issued and outstanding common shares will be acquired by CDPR for a total cash consideration of USD 30 million, a variable consideration and a net smelter royalty over the concessions, as outlined in the Transaction details below.

Transaction Highlights

CDPR will acquire the Target Companies as a going concern, including all their permits, licenses and concessions. The Target Companies' properties are located at the Cerro de Pasco mining complex and consist of the following:

• The Oxidos precious metals leach processing facility, permitted at 2,500tpd;
• The Paragsha base and precious metals concentrator, permitted at 17,500tpd;
• The San Expedito base and precious metals concentrator, permitted at 1,800tpd;
• The Santa Rosa oxide open pit that hosts mineral for processing through the Oxidos plant;
• The Raul Rojas sulphide open pit;
• The Lourdes and Excelsior Underground shafts;
• All associated surface infrastructure including the Ocroyoc tailings storage facility, offices, workshops, staff accommodations; and
• Over 12,000 hectares of exploitation and exploration concessions that host existing skarn and porphyry exploration potential. As of Dec 31, 2017 Volcan reported JORC compliant mineral resources as follows:

	Total Cerro de Pasco JORC‐ Compliant Mineral Resources (Dec 31, 2017)
		Grade					Contained metal
Class	Tonnes	Zn	Pb	Cu	Ag	Zn	Pb	Cu	Ag
	(M)	%	%	%	oz/t	Mlbs	Mlbs	Mlbs	Moz
Measured	30.8	2.62	0.95	0.06	1.86	1,780	643	39	57
Indicated	84.6	2.24	0.83	0.10	2.46	4,186	1,554	184	208
Inferred	25.5	1.28	0.52	0.12	3.63	720	292	65	92

Neither CDPR nor their technical QP have fully audited the mineral resources. CDPR plans to issue new resource statements in 2020 and these resource estimates are historical in nature and should not be relied upon.

CDPR has already acquired the mineral rights on the Excelsior mineral pile and the Quiulacocha tailings on the El Metalurgista mining concession and plans to complete a 43-101 resource calculation in a near future.

Transaction Details

Under the terms of the Agreement, 100% of the Target Companies' issued and outstanding common shares will be acquired based on the following components:

• A cash payment of USD 30 million, comprised as follows;

  • o USD 15 million on the closing date of the Transaction (the "Closing Date") and an additional USD 15 million on the first anniversary of the Closing Date.

• In respect of the silver and gold doré production from the Oxidos precious metals leach processing facility during the Initial Term ending on or prior to 31 December 2026:

  • o CDPR will pay Volcan 100% of the price difference between the average monthly spot silver price and USD 9.00/oz (the "Base Silver Price") and where average monthly spot silver price is above USD 18.00/oz, CDPR would share 50% of the difference in price;
    • The Minimum Silver Amount to be produced during the Initial Term is 17,677,264 ounces plus a prorata amount of 3,687,535 ounces in 2020 to be adjusted based on actual Closing Date.
  • o CDPR will pay Volcan 100% of the price difference between the average monthly spot gold price and USD 950.00/oz (the "Base Gold Price"), and where average monthly spot gold price is above USD 1,400.00/oz, CDPR will share 50% of the difference in price;
  • o The Base Silver Price and Base Gold Price shall increase by a percentage equal to the increase in the Consumer Price Index over the previous twelve-month period on each anniversary of the Closing;

• The Minimum Gold Amount to be produced during the Initial Term is 202,054 ounces plus a prorata amount of 18,767 ounces in 2020 to be adjusted based on actual Closing Date.

• o The Silver and Gold Oxide Resource as estimated by Cerro S.A.C.(June 2019) is shown below. Neither CDPR nor their technical QP have revised this estimate and should be considered historic in nature and not be relied upon.

	Resource - Insitu Oxides - Santa Rosa (June 2019)
			Grades	Contained metal
Class	Tonnes	Oz Ag	g/t Au	Oz Ag	Oz Au
Indicated	5,590,019	4.75	1.43	26,552,590	257,008
Inferrred	1,154,673	3.81	1.34	4,399,304	49,746
	6,744,692	4.59	1.41	30,958,136	305,759

Volcan will receive a royalty of 2% of the net smelter return as provided under a net smelter return royalty deed to be entered into between Cerro SAC, CDPR and Volcan (the "NSR Royalty Deed") on all metal production from all the concessions owned by Cerro SAC, other than material processed through the Oxidos facilities.

In addition and in accordance with the terms of an offtake agreement to be entered into between Cerro SAC and Volcan (the "Off-take Agreement"), Volcan will have an offtake in respect of 100% of all zinc and lead concentrates from ore resources owned by Cerro SAC as at the Closing Date, as well as a right of first refusal to purchase all concentrates produced from CDPR's El Metalurgista concessions.

Post-closing of the Transaction, CDPR will adopt a health, safety, environment and community work plan (the "HSEC Work Plan") based on Volcan´s existing HSEC Work Plan prior to entering into this transaction. The HSEC Work Plan will have an agreed budget to be financed from Cerro SAC´s and Oxidos' future cash flows. As CDPR will take over the operations and the assets, it intends to maintain Volcan's commitments with regards to mitigating the impact of the operations.

All flows and assets will remain held in trust until such time as provided under a security trust agreement to be entered into between Volcan, CDPR, the Target Companies and a Peruvian trustee.

Closing

The closing of the Transaction is subject to standard closing conditions as well as certain specific closing conditions, such as provided under the SPA agreement, by the Long Stop Date.

The Long Stop Date on the executed SPA on November 27th, 2019, was set for March 27th, 2020. On March 17th, 2020 the Parties agreed to a 90 days extension setting the new Long Stop Date at June 27th, 2020.

BUSINESS DEVELOPMENT SUBSEQUENT EVENTS

Financing – Promissory note

On February 6, 2020, the Company entered into a promissory note agreement with Alpha Capital Anstalt for USD $300,000, which bears interest at 12% annually until the maturity date and 18% anually after the maturity date (April 2020). The Company may prepay the full principal amount plus any other sums due on this Note at any time without any penalty. If the Company completes a capital raise with gross proceeds of at least $1,000,000, the Company shall pay off this Note within one business day of the closing of such financing raise. The promissory note is secured by personal guaranty from the Executive Chairman of the Board and the CEO.

Financing – Private placement

On February 28, 2020, the Company concluded a private placement by issuing 1,291,000 units at a price of $0.40 per unit for proceeds of $516,400. Each unit consists of one common share and one warrant for a total of 1,291,000 common shares and 1,291,000 warrants. Each warrant will entitle the holder to acquire one additional common share of the Company at an exercise price until February 28, 2022. The Company may, at its option, accelerate the expiry date under certain conditions.

On March 6, 2020, the Company concluded a private placement by issuing 1,052,500 units at a price of $0.40 per unit for proceeds of $421,000. Each unit consists of one common share and one warrant for a total of 1,052,500 common shares and 1,052,500 warrants. Each warrant will entitle the holder to acquire one additional common share of the Company at an exercise price of $0.65 until March 6, 2022. The Company may, at its option, accelerate the expiry date under certain conditions.

Amendment to the Transaction

The Company and Volcan Compania Minera S.A.A have agreed to extend the closure date of CDPR's acquisition of the Cerro de Pasco Mine (the "Transaction"), to June 27th, 2020.

NI 43-101

The Company has engaged international mining industry consulting firm, CSA Global Consultants Canada Ltd. ("CSA Global"), to complete a geological and Mineral Resource estimate review and audit at Cerro de Pasco and to complete a Technical Report on the resources included as part of the Transaction.

Environmental Audit

The Company engaged Ausenco / Hemerra, to conduct an Environmental Audit for baseline operations as it relates to the Transaction.

Appointment of President and Director

On March 9, 2020, the Company announced the appointment of Mr. Neil Ringdahl as president and director of the Company effective immediately.

Mr. Ringdahl is a mining executive with over 27 years of international operations and project experience in Latin America, Europe and Africa. Mr. Ringdahl has a strong technical background and previously worked with Volcan at Cerro de Pasco as the Corporate Project Manager, Orvana Minerals Corp. as COO, Apogee Silver as CEO, and is currently the COO at Ascendant Resources Inc where he has effectively doubled the metal production and reduced the cost of production by over 40% at its El Mochito Mine over the past three years. While at Orvana, he was successful in implementing programs to improve safety and profitability of its operations in Spain as well as increasing the life of its Bolivian operation by four years. At Apogee Silver, he held the position of Chief Executive Officer where he significantly derisked the rehabilitation and construction at the Pulacayo mine in Bolivia while fostering proactive community relations improvements and reaching agreements to avoid nationalization of the assets. Mr. Ringdahl has also held senior positions with Golden Star Resources in West Africa, Anglo Platinum and Anglogold in South Africa. Mr. Ringdahl holds a bachelor's degree with Honors in mining engineering from the University of the Witwatersrand in South Africa.

Guy Goulet remains the Chief Executive Officer and Director of the Company

Other

On March 30, 2020, the Company issued to service providers 30,000 common shares for business development consultancy.

COVID-19

Subsequent to the year end, the COVID-19 pandemic is causing significant financial market and social dislocation. The situation is dynamic with various cities and countries around the world responding in different ways to address the outbreak. The Company assess the impact COVID-19 will have on its business activities. The extent of the effect of the COVID-19 pandemic on the Company is uncertain.

PROJECT DEVELOPMENT HIGHLIGHTS

The Company continues to focus its efforts on further developing the Project. These efforts were focused on all areas of importance as summarized below:

Community relations

The Company continued to spend a significant amount of time communicating the opportunities of the El Metalurgista Project to the two adjacent local communities, Quiulacocha and the human settlement of Champamarca. Community support is integral for the success of any project in Peru. The Company continued to spend capital and time effort in communicating all the benefits of the proposed project to the members of the community. This was achieved by production of materials highlighting those benefits, distribution of those materials to the local communities, one on one communication with relevant stakeholders of the communities and general assembly meetings with the community population at large. The Company also hosted several cultural activities, participated in several sponsorship opportunities, and donated miscellaneous items to the children attending school.

In September 2019, the Quiulacocha Community has voted decisively in favor of CDPR's tailings reprocessing plan. This represents a crucial step towards achieving the required social license and key permits. Perhaps more important than any legal authorization, the landmark vote reinforces the Company's partnership with the communities. It enables CDPR to remove and reprocess mining waste at the famous Cerro de Pasco mine, and in doing so would provide an effective and practical environmental remediation solution with long -term economic and social benefits.

The decisive result was achieved on the 15th of September, 2019 at the General Assembly of the Community chaired by Mr. Miguel Baldeon Hermitaño and ratified on the 19th of September, 2019. Ninety Eight percent (98%) of the community members attending the event voted in favor of the CDPR's initiative. According to the count made by community officials, the ratification of the "Agreement to Support the Reprocessing Project of Mining Tailings" was approved by one hundred three (103) votes in favor, only three (3) against and zero (0) abstentions.

The community has agreed to assist CDPR, in the remediation of contamination specifically found in old tailings within the historical El Metalurgista Concession, through its removal & reuse. The Community of Quiulacocha owns an area of approximately 40 km2 located in the area of influence of the El Metalurgista project.

Individual meetings with the representatives of the community of Quiulacocha, the human settlement of Champamarca, the Provincial Municipality of Cerro de Pasco, and the Municipality of Rancas are held on a regular basis to ensure a good information flow regarding the planned Quiulacocha exploration project and the acquisition of the Target Companies by CDPR. These meetings also serve as a platform to discuss other relevant issues, such as company policies, local development needs, and contract opportunities for local communities.

Government relations

The Company continued to spend time and capital communicating the opportunities of the El Metalurgista Project to the local and national government of Peru. The company employed various consultants to produce technical materials, related to health, safety, environment and communities. The materials highlighted the opportunities of the project and the potential positive impact it will have on Cerro De Pasco.

Environmental Impact Declaration

On July 26, 2019, the Company presented an Environmental Impact Declaration (Declaración de Impacto Ambiental) (the "DIA") for the exploration of the Quiulacocha tailings deposit before the Peruvian Ministry of Energy and Mines for evaluation and approval.

The DIA is being updated by the certified environmental consultancy company called Julio Cesar Ingenieros y Consultores (JCI) and will be submitted to the Ministry of Energy and Mines in May 2020 for its review and approval. The expected approval date is June 2020.

The DIA provides the details and coordinates for the 40-hole Drilling Program that CDPR intends to carry out on its El Metalurgista concession located within the Quiulacocha tailings deposit. The Quiulacocha tailings deposit covers 115 hectares and is estimated to hold approximately 70 million tonnes of tailings which contain recoverable metals such as silver, zinc, lead, copper, gold and other strategic metals.

Formal Proposal to Peruvian Ministry of Energy and Mines

Since the start of 2019, the Company has been in discussions with the legal department of the Peruvian Ministry of Energy and Mines (the "MINEM") with regards to finding the best legal mechanism for the State of Peru to grant the company with the tailings areas which surround the El Metalurgista concession. On July 26th, 2019 the Company provided MINEM with a formal proposal and legal remedy for the State to grant the Company rights to the entire tailings area for the Company to conduct a comprehensive analysis and develop an effective retreatment and remediation plan. In this regard the Company has proposed to provide MINEM with an irrevocable performance guarantee with respect to the activities the Company plans to carry out on the surround tailings.

The Company's Commitments to Internationally-Accepted Industry Practices for Environmental, Community, Safety, Anti-Corruption, and Corporate Social Responsibility (CSR) Matters

In the second quarter of 2019, the Company board of directors approved several policies related to Environment, Community, Safety, Anti-Corruption, and Corporate Social responsibility (CSR).

CDPR's key focus is the environmental remediation through the extraction of remaining valuable minerals from the stockpiles and deposits generated by previous local mining activities. CDPR endorses and conducts responsible mining practices. CDPR will utilize up-to-date technology and industrial development solutions to secure long-term economic sustainability and a healthy and prosperous local population at Cerro de Pasco.

CDPR clearly recognizes that the communities and the environments in which it operates in are interdependent and that it may be held accountable for any effects and potential consequences. The proper management of these inter-connecting activities is essential to the economic well-being of CDPR. Therefore, CDPR is totally committed to having first-rate programs for: protection of the environment; providing safe workplaces for its employees and contractors; responsibly and ethically managing our relationships with its Project stakeholders and in the local communities where it operates; and, ensuring that CDPR is one that readily accepts and promotes itself as following the principles of corporate social responsibility or CSR.

CDPR has a rigorous commitment to the principles of corporate social responsibility, anti-corruption ethics, sound environmental practices, safe working conditions for our employees, and positive community involvement in its Projects. To that end, CDPR has strong, formal policies on these matters, which conform to generally-accepted international standards, that have been formally adopted by the CDPR Board.

CDPR's development of the Cerro de Pasco Project will be guided by internationally-accepted core principles and strategic goals. As such, CDPR will be driven by the Principles of Performance (listed below) of the International Council on Mining and Metals (ICMM), a well-respected international organization dedicated to a safe, fair, and sustainable mining and metals industry. The ICMM is comprised of 26 of the world's leading mining and metals companies and 35 regional and commodities associations.

• 1. Apply ethical business practices and sound systems of corporate governance and transparency to support sustainable development;
• 1. Integrate sustainable development in corporate strategy and decision-making processes;
• 1. Respect human rights and the interests, cultures, customs and values of employees and communities affected by our activities;
• 1. Implement effective risk-management strategies and systems based on sound science and which account for stakeholder perceptions of risks;
• 1. Pursue continual improvement in health and safety performance with the ultimate goal of zero harm;
• 1. Pursue continual improvement in environmental performance issues, such as water stewardship, energy use and climate change;
• 1. Contribute to the conservation of biodiversity and integrated approaches to land-use planning;
• 1. Facilitate and support the knowledge-base and systems for responsible design, use, re-use, recycling and disposal of products containing metals and minerals;
• 1. Pursue continual improvement in social performance and contribute to the social, economic and institutional development of host countries and communities; and
• 1. Proactively engage key stakeholders on sustainable development challenges and opportunities in an open and transparent manner. Effectively report and independently verify progress and performance.

Code of Business Conduct and Ethics

On November 15, 2019 the Company adopted a Code of Business Conduct and Ethics embodies our commitment to conduct our business according to the highest ethical standards.

CDPR success is built on a commitment to high standards of corporate governance, business conduct, and professional integrity. We conduct our business around the world in an ethical, honest and accountable manner and in accordance with applicable laws, rules and regulations. We value, and are committed to, transparency in our business practices, consistent with good commercial confidentiality. Our company is committed to the principles of Responsible Mining.

The CDPR Corporate Code of Business Conduct and Ethics outlines our obligations regarding: business integrity, labor practices, security, human rights, transparency, public disclosure, cultural heritage, avoiding conflicts of interest, avoiding insider trading, anti-fraud, and anti- corruption & anti-bribery, among others.

CORPORATE OBJECTIVES FOR 2020

• Complete the acquisition of the Cerro de Pasco Mine with Volcan Compañia Minera S.A.A. (BVL:VOLCABC1)("Volcan") outlined in the press releases on March 31, 2020 and November 28, 2019, (the "Transaction");
• Improve the efficiencies of the main operating assets contemplated in the Transaction, namely the oxide mining and leach processing plant and the two base metals concentrators currently treating stockpiles;
• Complete Mineral Resource Estimates of the business combination on completion of the Transaction. Specifically, the new NI43-101 Mineral Resource Estimates will include the following areas:
  • o Oxides
  • o Sulphides
  • o Excelsior stockpile
  • o Miraflores stockpile
  • o Pyrite stockpile
  • o Rumilliana stockpile
• Commence with the exploration of the Quiulacocha historical tailings deposit;
• Conduct metallurgical test work on the Quiulacocha tailings material;
• Complete an Environmental Audit for baseline operations; and
• Commence a post-transaction, dual-listing process to the TSX-V/TSX and BVL (Lima) Stock Exchanges.

CURRENT PROJECTS

Cerro De Pasco

• Cerro de Pasco is one of the oldest and largest polymetallic mines in the world, operating for almost 400 years.
• The Quiulacocha tailings facility contains approximately 79MT of processable mineral, from the Cerro de Pasco mining complex.
• The Excelsior Stockpile, likewise, from the mine, contains 104MT with an estimated 43Mt of mineral that could be processed at nearby concentrators Paragsha and San Expedito.
• Currently, these facilities are working well below installed capacity and efficiency and therefore, the possibility exists for either a tolling agreement or an acquisition of all processing facilities at Cerro de Pasco

The Excelsior Mineral Pile and Quiulacocha Tailings

The Excelsior property consists of the Excelsior Mineral Pile ("EMP") and Quiulacocha Tailings ("QT") which are residues generated by the processing of the Cerro de Pasco Mine Pb-Zn-Ag-Cu ore located 310 km from Lima, in east-central Peru.

The Cerro de Pasco mine became one of the world's richest silver producing regions after base and precious metals were discovered in 1630. The EMP left from the mine operations contains an estimated 104Mt of which an estimated 43Mt can be economically processed and the QT contains 79Mt of which an estimated 79Mt could be economically processed. Cerro de Pasco Resources Inc. through its Peruvian Branch, Cerro de Pasco Resources Sucursal del Peru, owns 100% of the mineral rights of the El Metalurgista Concession, where the EMP and QT are located.

The Excelsior stockpile has been extensively explored by RC drilling, trenching and tested through metallurgical test work programs.

The EMP occupies an area of 94 ha and contains 26,400,000 m3 of fragmentary rocks forming terraces composed of sulfide-rich rocks, sericitized volcanic and carbonate (dolomitic) rocks. Metal-bearing minerals consist of sphalerite (Zn), tennantite (Cu), cerussite (Pb), enargite (Cu) and galena (Pb, Ag-rich). The more reliable Historical Resources Estimate generated 42.89 Mt @ 0.09 wt. % Cu (85.1 M lb), 0.73 wt. % Pb (690.3 M lb), 1.59 wt. % Zn (1696.1 M lb) and 66.1 g/t Ag (91.1 M oz) with Pb+Zn= 2.33 wt. %*.

The QT cover a surface of 114 ha and contain approximately 79 Mt of pyrite-bearing tailings of two different types: Cu-rich and Zn-Pb-rich sulphides. The best Historical Resources Estimate generated a total of 2.94 Mt @ 43.1 g/t Ag (4.1 M oz), 418 ppm Cu, 0.79 wt. % Pb (51.2 M lb) and 1.43 wt. % Zn (92.7 M lb)*.

Satellite view of the Cerro de Pasco area showing the ancient Raul Rojas open pit and the Quiulacocha Tailing (QT) and Excelsior Mineral Pile (EMP).

* The estimates presented above are treated as historic information and have not been verified or relied upon for economic evaluation by the Issuer or the writer. These are considered historical Mineral Resources and do not refer to any category of sections 1.2 and 1.3 of the NI-43-101 Instrument such as Mineral Resources or Mineral Reserves as stated in the 2010 CIM Definition Standards on Mineral Resources and Mineral Reserves. The explanation lies in the inability by the authors to verify the data acquired by the various historical drilling campaigns and other sampling works. The authors have read the documents pertaining to the description of the different methods used in the historical evaluation of the Mineral Resources. The Issuer has not done sufficient work yet to classify the historical estimates as current Mineral Resources or Mineral Reserves. Therefore, the Issuer is in the opinion that the above quoted resources for the EMP and QT cannot be relied upon.

Our Business Plan

The plan of the Company is to reprocess tailings and stockpiles at Cerro de Pasco and to use these to revive and modernise all existing installations at the mining complex.

The pit still holds significant reserves and resources. The current political, social and economic climate in Peru creates a positive platform from which the Company can execute its vision for a fully integrated and multi-dimensional economic rehabilitation of all of the current and legacy minerals assets around the city of Cerro de Pasco. Cerro de Pasco Resources continues to advance a dialogue with leading experts on mineral waste recycling and site remediation with the aim of achieving an ambitious "zero waste" solution and the creation of a Circular Economy for the city of Cerro de Pasco. The Company has received encouraging signals from multiple levels of the Peruvian Ministry of Energy and Mines beckoning an intensive exploration and development phase starting in 2019.

Our Concept Proposal

"SUSTAINABLE DEVELOPMENT OF THE CERRO DE PASCO COMPLEX TOWARDS A MODERN ZERO WASTE OPERATION"

The future of Cerro de Pasco will depend on the application of the latest science in geo-resource and industrial development. The town's history has, until now depended entirely on conventional "dirty" mining of commodity metals. However, new science can secure long-term economic sustainability in harmony with a healthy and prosperous local population. The initial objective of this project will be to drive the productive utilization of all material resources available at Cerro de Pasco and new industrial activities that will further perpetuate prosperity into the future. To achieve a series of objectives, CDPR will need to start by integrating all its resources and introducing techniques to reprocess all tailings and stockpiles contained within the entire complex.

The Concept starts with a complete exploration of the potential of the resources present at Cerro de Pasco and their current impact on the environment (to include a Baseline study of the entire Cerro de Pasco Watershed). It also includes the development of a sustainable inline extraction process towards the elimination of all waste. This implies a search for and separation of critical elements like Rare Earth Elements (REE), Platinium Group Elements (PGE) and other strategic elements (Ge, In, Ga) as well research and innovation to use of the main volume of the known waste material (pyrite, carbonates, and silicates). An example is the innovative exploitation of the heat capacity of pyrite for home heating systems for the population of Cerro de Pasco. Additionally, a new concept for the sustainable urban development of Cerro de Pasco will be created to strengthen the social impact by providing better living conditions for the whole population of Cerro de Pasco. This implies the attraction of secondary industries drawing benefit from the entire range of geo-resources present at Cerro de Pasco (including classical commodities (Pb, Zn, Ag, Bi, Cu, Au) as well as innovative commodities (including pyrite, carbonate, silicates).

The positive impacts will be immense in terms of job creation, poverty reduction and quality of life at Cerro de Pasco, a city with over 50,000 inhabitants and a unique history in, and loyalty to mining. CDPR will promote a broad spectrum of initiatives including urban re-planning, health and welfare in collaboration with the local and national authorities. Under the initial plan, households will be relocated from the most heavily contaminated areas. Cerro De Pasco Resources can therefore become the nucleus for sustainable growth, renewing the site's ageing infrastructure and plant and employing the latest technologies to create an emblematic project.

Exploration outlook

As part of the next steps in the development of the project, the Company will first need to update the historical Mineral Resource Estimates performed on the QT and EMP to render them compliant with the NI43-101 and CIMM norms. Regarding the EMP Resource Estimate, re-sampling of the 2009 RC drill holes (if retrievable) and pits, and sinking of twin holes will be necessary. The upgrading to Indicated or Measured Mineral Resources may also require additional RC drill holes to tighten the spacing which currently sits at 30 to 50 m. Note the QT Mineral Resource Estimates concerns about 225,000 m2 of tailings area; less than half of the total surface. The Company is evaluating a sonic drilling program to expand the QT resources.

In addition, CSA Global Consultants Canada Ltd has been commissioned by Cerro de Pasco Resources Inc. to validate the Mineral Resource estimates provided by Volcan Compañía Minera and to generate CDPR´s Mineral Resource Statement. As of April 2020, CSA has completed the site visits and is currently reviewing the Mineral Resource estimates.

MINING PROPERTIES & EXPLORATION AND EVALUATION ASSETS

Mining properties and exploration and evaluation assets for the three-month period ended December 31, 2019.

CERRO DE PASCO RESOURCES INC.

Mining properties Mining properties

For the three-month period ended December 31, 2019		For the three-month period ended December 31, 2018
	PERU			PERU
	Quiulacocha tailingsand Excelsior Stockpile	Total		Quiulacocha tailingsand Excelsior Stockpile	Total
	$	$		$	$
Mining properties			Mining properties
Mining rights	-	-	Mining rights	-	-
Community relations	285,039	285,039	Community relations	-	-
Exchange gain	25,894	25,894	Exchange gain	50,160	50,160
	310,933	310,933		50,160	50,160
Balance, beginning of period	1,078,910	1,078,910	Balance, beginning of period	1,060,183	1,060,183
Balance, end of period	1,389,843	1,389,843	Balance, end of period	1,110,343	1,110,343

PERU PERU and Excelsior Stockpile Total Quiulacocha tailings and Excelsior Stockpile Total $ $ $ $ Mining rights - - Mining rights - - Community relations 285,039 285,039 Community relations - - Exchange gain 25,894 25,894 Exchange gain 50,160 50,160 310,933 310,933 50,160 50,160

For the three-month period ended December 31, 2019 For the three-month period ended December 31, 2018

Exploration and evaluation assets Exploration and evaluation assets

	PERU			PERU
	Quiulacocha tailingsand Excelsior Stockpile	Total		Quiulacocha tailingsand Excelsior Stockpile	Total
	$	$		$	$
Exploration and evaluation assets			Exploration and evaluation assets
Installation pre-operative expenses	-	-	Installation pre-operative expenses	-	-
Exchange loss	(3,675)	(3,675)	Exchange gain	8,872	8,872
	(3,675)	(3,675)		8,872	8,872
Balance, beginning of period	190,846	190,846	Balance, beginning of period	187,534	187,534
Balance, end of period	187,171	187,171	Balance, end of period	196,406	196,406

Mining properties and exploration and evaluation assets for the year ended December 31, 2019.

CERRO DE PASCO RESOURCES INC.

Mining properties Mining properties

	Quiulacocha tailings
Mining properties		Mining properties

For the year ended December 31, 2019 For the year ended December 31, 2018

	PERU			PERU
	Quiulacocha tailingsand Excelsior Stockpile	Total		Quiulacocha tailingsand Excelsior Stockpile	Total
	$	$		$	$
Mining properties			Mining properties
Mining rights	-	-	Mining rights	246,814	246,814
Community relations	285,039	285,039	Community relations	-	-
Exchange loss	(5,539)	(5,539)	Exchange gain	90,845	90,845
	279,500	279,500		337,659	337,659
Balance, beginning of period	1,110,343	1,110,343	Balance, beginning of period	772,684	772,684
Balance, end of period	1,389,843	1,389,843	Balance, end of period	1,110,343	1,110,343

	Quiulacocha tailings
Exploration and evaluation assets		Exploration and evaluation assets

Exploration and evaluation assets Exploration and evaluation assets

For the year ended December 31, 2019 For the year ended December 31, 2018

	PERU			PERU
	Quiulacocha tailingsand Excelsior Stockpile	Total		Quiulacocha tailingsand Excelsior Stockpile	Total
	$	$		$	$
Exploration and evaluation assets			Exploration and evaluation assets
Installation pre-operative expenses	-	-	Installation pre-operative expenses	-	-
Exchange loss	(9,235)	(9,235)	Exchange gain	15,694	15,694
	(9,235)	(9,235)		15,694	15,694
Balance, beginning of period	196,406	196,406	Balance, beginning of period	180,712	180,712
Balance, end of period	187,171	187,171	Balance, end of period	196,406	196,406

QUALIFIED PERSON

Dr. Michel Boily P.Geo, is the qualified person under NI 43-101 who has reviewed and approved the technical information contained in this document for the Canadian and Peruvian properties.

FINANCIAL INFORMATION

Functional and presentation currency

These selected quarterly financial information and other financial information are presented in Canadian dollars, the Company's functional currency.

IFRS Accounting policies

The Company's significant accounting policies under IFRS are disclosed in Note 5 in the audited annual consolidated financial statements for the year ended December 31, 2019.

Use of estimates and judgements

Please refer to Note 3.5 of the 2019 audited annual consolidated financial statements for an extended description of the information concerning the Company's significant judgments, estimates and assumptions that have the most significant effect on the recognition and measurement of assets, liabilities, income and expenses.

Changes in accounting policies

The Company's changes to accounting policies are disclosed in Note 4.1 in the audited annual consolidated financial statements for the year ended December 31, 2019.

New standards and interpretations that have not yet been adopted

The information is provided in Note 5.21 in the audited annual consolidated financial statements for the year ended December 31, 2019.

Reverse takeover

The information is provided in Note 6 in the audited annual consolidated financial statements for the year ended December 31, 2019.

Dividends

Since its incorporation, the Company has not paid any cash dividends on its outstanding common shares. Any future dividend payment will depend on the Company's financial needs to fund its exploration programs and its future growth, and any other factor that the Board may deem necessary to consider. It is highly unlikely that any dividends will be paid in the near future.

SELECTED ANNUAL FINANCIAL INFORMATION

The following selected financial information is derived from our audited financial statements for each of the three most recently completed financial years.

CERRO DE PASCO RESOURCES INC.SELECTED ANNUAL FINANCIAL INFORMATION
	December 31	December 31	December 31
	2019	2018	2017
			(restated) 1
	$	$	$
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
Operating expensesGeneral and administrative expenses	4,793,797	1,765,688	625,069
	4,793,797	1,765,688	625,069
Other expenses
Finance expense	29,673	5,396	91,100
Non-receverable sales taxes	130,297	51,412	23,898
Loss on settlement of receivables	35,937	-	-
Gain on settlement of payables	-	(76,961)	-
Write-off of payables	(32,119)	-	-
Non cash listing costs related to the reverse takeover ("RTO") (2)	-	13,754,103	-
Exchange gain	77,985	(115,865)	(9,958)
	241,773	13,618,085	105,040
Income tax	62,795	-	-
Net loss	5,098,365	15,383,773	730,109
Other comprehensive loss
Currency translation adjustment	(14,420)	(54,140)	4,464
Other comprehensive loss net of tax	(14,420)	(54,140)	4,464
Net loss and comprehensive loss	5,083,945	15,329,633	734,573
Net loss attributable to:
Shareholders of Cerro de Pasco Resources Inc	5,098,365	15,383,773	730,109
Non-controlling interests	-	-	-
Other comprehensive loss attributable to:
Shareholders of Cerro de Pasco Resources Inc	(14,420)	(54,140)	4,464
Non-controlling interests	-	-	-
Basic and diluted loss per share:	0.02	0.10	0.01
	December 31	December 31	December 31
	2019	2018	2017
			(restated) 1
	$	$	$
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Cash and cash equivalents	275,466	1,349,140	38,441
Property and equipment	67,953	22,886	1,028
Mining properties	1,389,843	1,110,343	722,684
Exploration and evaluation assets	187,171	196,406	180,712
Total assets	2,329,583	2,954,032	1,111,031
Total current liabilities	884,578	560,512	2,012,634
Equity (deficit)	1,304,976	2,391,302	(901,603)

(1) See Note 4.1 in the audited annual consolidated financial statements for the year ended December 31, 2018.

(2) See Note 6 in the audited annual consolidated financial statements for the year ended December 31, 2019.

The basic and diluted loss per share during the year ended December 31, 2019 is $0.02 ($0.10 in 2018 and $0.01 in 2017). During the year ended December 31, 2019, the Company realized a net loss of $5,098,365 as compared to a net loss of $15,383,773 for the year ended December 31, 2018 (a significant decrease of $10,285,408 in 2019 compared to 2018) and to a net loss of $730,109 for the year ended December 31, 2017 (an increase of $14,653,664 in 2018 compared to 2017).

The basic and diluted loss per share during the year ended December 31, 2018 is $0.10 ($0.01 in 2017 and $0.00 in 2016). During the year ended December 31, 2018, the Company realized a net loss of $15,383,773 as compared to a net loss of $730,109 for the year ended December 31, 2017 (an increase of $14,653,664 compared to 2017) and to a net loss of $35,838 for the year ended December 31, 2016 (an increase of $694,271 compared to 2016).

The significant decrease of $10,285,408 for the year ended December 31, 2019 as compared to 2018 in net loss is attributable to listing costs expenses incurred for the completion of the RTO ($Nil in 2019 compared to $13,754,103 in 2018).

The significant increase of $14,653,664 for the year ended December 31, 2018 as compared to 2017 in net loss is attributable to listing costs expenses incurred for the completion of the RTO ($13,754,103 in 2018 compared to $Nil in 2017).

The total assets as at December 31, 2019 were $2,329,583 as compared to $2,954,032 and $1,111,031 for the years ended December 31, 2018 and 2017 respectively. The decrease of $624,449 in total assets in 2019 compared to 2018 ($2,329,583 compared to $2,954,032) is mainly due to a decrease of $1,073,674 in cash and cash equivalents held as at the year ended ($275,466 as at December 31, 2019 compared to $1,349,140 as at December 31, 2018).

The total assets as at December 31, 2018 were $2,954,032 as compared to $1,111,031 and $503,781 for the years ended December 31, 2017 and 2016 respectively. The increase of $1,843,001 in total assets in 2018 compared to 2017 ($2,954,032 compared to $1,111,031) is mainly due to the proceeds of $1,600,501 from private placements concluded in December 2018.

The total current liabilities as at December 31, 2019 were $884,578 as compared to $560,512 and $2,012,634 for the years ended December 31, 2018 and 2017 respectively. The increase of $324,066 in total current liabilities in 2019 compared to 2018 is mainly due to an amount of $137,571 relating to agreements with communities recognized in 2019 in accrued liabilities combined with an increase of $167,571 of sources deductions & contributions payable ($189,076 as at December 31, 2019 compared to $21,505 as at December 31, 2018).

The total current liabilities as at December 31, 2018 were $560,512 as compared to $2,012,634 and $670,811 for the years ended December 31, 2017 and 2016 respectively. The decrease of $1,452,122 in total current liabilities in 2018 compared to 2017 is mainly due to the settlement of accounts payables of $1,310,334 concluded in May and June 2018.

The decrease of $1,086,326 in equity in 2019 compared to 2018 ($1,304,976 compared to a deficit $2,391,302) is mainly due to the proceeds of $2,618,332 from the warrants exercised in March and April 2019 combined with the value of $1,094,087 of the share options granted in March and December 2019 and decreased by the net loss and comprehensive loss of $5,083,945 for 2019.

The increase of $3,292,905 in equity in 2018 compared to 2017 ($2,391,302 compared to a deficit $901,603) is mainly due to the proceeds of $1,600,501 from private placements concluded in December 2018 combined with the value of $411,644 of the warrants issued from the private placements and the addition of the warrants estimated at $652,493 from the RTO of October 5, 2015.

Since its incorporation, the Company has not paid any cash dividends on its outstanding common shares. Any future dividend payment will depend on the Company's financial needs to fund its exploration programs and its future growth, and any other factor that the Board may deem necessary to consider. It is highly unlikely that any dividends will be paid in the near future.

Results of operations for the year ended December 31, 2018

Net loss

During the year ended December 31, 2019, the Company realized a net loss of $5,098,365 as compared to a net loss of $15,383,773 for the year ended December 31, 2018.

The significant decrease of $10,285,408 for the year ended December 31, 2019 as compared to 2018 in net loss is attributable to listing costs expenses incurred for the completion of the RTO ($Nil in 2019 compared to $13,754,103 in 2018).

During the year ended December 31, 2018, the Company realized a net loss of $15,383,773 as compared to a net loss of $730,109 for the year ended December 31, 2017.

The significant increase of $14,653,664 for the year ended December 31, 2018 as compared to 2017 in net loss is attributable to listing costs expenses incurred for the completion of the RTO ($13,754,103 in 2018 compared to $Nil in 2017).

Operating expenses

During the year ended December 31, 2019, operating expenses were $4,793,797 as compared to $1,765,688 for the year ended December 31, 2018.

The significant increase of $3,028,109 for the year ended December 31, 2019 as compared to 2018 in operating expenses is attributable to a significant increase of $735,245 in management and consulting fees ($1,455,973 in 2019 compared to $720,728 in 2018) combined with an increase of $274,314 in salaries and employee benefit expense ($606,392 in 2019 compared to $332,078 in 2018), an increase of $380,386 in professional fees ($674,990 in 2019 compared to $294,604 in 2018), an increase of $348,708 in business development expense ($599,833 in 2019 compared to $251,125 in 2018) and an increase of $1,094,087 in share-based compensation ($1,094,087 in 2019 compared to $Nil in 2018). The increase of $3,028,109 reflects the increase in the effort deployed to achieve the company's objective, which is to bring its mining properties into operation in Peru.

During the year ended December 31, 2018, operating expenses were $1,765,688 as compared to $625,069 for the year ended December 31, 2017.

The significant increase of $1,140,619 for the year ended December 31, 2018 as compared to 2017 in operating expenses is attributable to a significant increase of $719,673 in management and consulting fees ($720,728 in 2018 compared to $1,055 in 2017) combined with an increase of $194,052 in salaries and employee benefit expense ($332,078 in 2018 compared to $138,026 in 2017).

Other expenses

During the year ended December 31, 2019, the other expenses was $241,773 as compared to other expenses of $13,618,085 for the year ended December 31, 2018 and other expenses of $105,040 for the year ended December 31, 2017.

The decrease of $13,376,312 in 2019 as compared to 2018 (other expenses of $241,773 in 2019 compared to other expenses of $13,618,085 in 2018) in other expenses is attributable to listing costs expenses incurred for the completion of the RTO ($Nil in 2019 compared to $13,754,103 in 2018).

During the year ended December 31, 2018, the other expenses was $13,618,085 as compared to other expenses of $105,040 for the year ended December 31, 2017 and other revenues of $14,790 for the year ended December 31, 2016.

The increase of $13,513,045 in 2018 as compared to 2017 (other expenses of $13,618,085 in 2018 compared to other expenses of $105,040 in 2017) in other expenses is attributable to listing costs expenses incurred for the completion of the RTO ($13,754,103 in 2018 compared to $Nil in 2017).

SELECTED QUARTERLY FINANCIAL INFORMATION

Cerro de Pasco Resources anticipates that the quarterly and annual results of operations will primarily be impacted for the near future by several factors, including the timing and efforts of the exploration's expenditures and efforts related to the development of the Company. Due to these fluctuations, the Company believes that the quarter to quarter and the year-to-year comparisons of the operating results may not be a good indication of its future performance.

The following selected quarterly financial information is derived from our unaudited condensed annual financial statements for each of the two most recently completed financial years.

CERRO DE PASCO RESOURCES INC. SELECTED QUARTERLY FINANCIAL INFORMATION

2018Q1$
160,883160,883
830
9,217
-
-
-
-
(40,136)
(30,089)
-
130,794
29,693
29,693
160,487
160,487
-
29,693
-
0.00

(1) See Note 6 in the audited annual consolidated financial statements for the year ended December 31, 2019.

				2019				2018
	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
	$	$	$	$	$	$	$	$
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Cash and cash equivalents	275,466	1,147,065	2,107,619	630,800	1,364,140	135,624	181,698	96,218
Property and equipment	67,953	60,636	21,529	21,071	22,886	1,045	1,086	1,058
Mining properties	1,389,843	1,078,910	1,066,201	1,088,687	1,110,343	1,060,183	1,079,142	1,051,026
Exploration and evaluation assets	187,171	190,846	188,598	192,576	196,406	187,534	190,887	185,914
Total assets	2,329,583	2,883,841	3,694,929	2,154,280	2,954,032	1,534,143	1,636,829	1,456,299
Total current liabilities	884,578	286,272	448,851	565,295	560,512	239,159	295,148	1,595,612
Equity	1,304,976	2,594,318	3,244,592	1,584,629	2,391,302	(442,292)	42,959	(965,123)

The net loss of $1,108,820 for Q4-2019 is attributable to general and administrative expenses of $980,676.

The net loss of $714,829 for Q3-2019 is attributable to general and administrative expenses of $646,745.

The net loss of $944,219 for Q2-2019 is attributable to general and administrative expenses of $851,506.

The net loss of $2,330,496 for Q1-2019 is mostly attributable to the grant of 5,450,000 share options to directors, officers, consultants and an employee which the fair value was estimated at $1,337,905.

The net loss of $14,385,457 for Q4-2018 is attributable to listing costs expenses of $13,754,103 related to the RTO of October 5, 2018.

The net loss of $491,534 for Q3-2018 is attributable to general and administrative expenses of $474,702.

The net loss of $375,988 for Q2-2018 is attributable to general and administrative expenses of $359,534.

Results of operations for the three-month period ended December 31, 2019

Net loss

The basic and diluted loss per share for the three-month period ended December 31, 2019 is $0.01 as compared to $0.06 for the three-month period ended December 31, 2018.

During the three-month period ended December 31, 2019, the Company realized a net loss of $1,108,820 as compared to a net loss of $14,385,457 for the three-month period ended December 31, 2018.

The significant decrease of $13,276,637 for the three-month period ended December 31, 2019 as compared to 2018 in net loss is attributable to listing costs expenses incurred for the completion of the RTO ($Nil in Q4- 2019 compared to $13,754,103 in Q4-2018).

Operating expenses

During the three-month period ended December 31, 2019, operating expenses were $980,676 as compared to $770,569 for the three-month period ended December 31, 2018.

The increase of $210,107 for the three-month period ended December 31, 2019 as compared to 2018 in operating expenses is attributable to an increase in the level of activity since December 31, 2018.

Other expenses (revenues)

During the three-month period ended December 31, 2019, the other expenses were $65,349 as compared to other expenses of $13,614,888 for the three-month period ended December 31, 2018.

The significant decrease of $13,549,539 for the three-month period ended December 31, 2019 as compared to 2018 in net loss is attributable to listing costs expenses incurred for the completion of the RTO ($Nil in Q4- 2019 compared to $13,754,103 in Q4-2018).

CASH FLOWS

Cash flows used for operating activities

Cash flows used for operating activities were $3,532,765 during the year ended December 31, 2019, an increase of $2,179,213 as compared to cash flows of $1,353,552 from operating activities during the year ended December 31, 2018. The increase of $2,179,213 in cash flows used for operating activities is mostly explained by an increase of $1,934,022 in general and administrative expenses excluding the share-based compensation of $1,094,087 ($3,699,710 for the year ended December 31, 2019 excluding the share-based compensation of $1,094,087 as compared to $1,765,688 for the year ended December 31,2018).

Cash flows from financing activities

Cash flows from financing activities were $2,597,696 during the year ended December 31, 2019, a decrease of $158,585 as compared to cash flows of $2,756,281 from financing activities during the year ended December 31, 2019.

The decrease of $158,585 is mostly attributable to an increase of $1,055,331 from the proceeds from private placements and from warrants exercised ($2,668,332 for the year ended December 31, 2019 as compared to $1,613,001 for the year ended December 31, 2018) combined with a decrease of $1,152,445 from amount due to a non-related company ($Nil for the year ended December 31, 2019 as compared to $1,152,445 for the year ended December 31, 2018).

Cash flows used for investing activities

Cash flows used for investing activities were $154,725 (acquisition of property and equipment and mining property) during the year ended December 31, 2019, an increase of $104,128 as compared to cash flows of $50,597 used for investing activities during the year ended December 31, 2018 for the acquisition of rights to a mining property combined with an amount of $221,476 in cash and cash equivalents acquired through the RTO of October 5, 2018.

OTHER FINANCIAL DISCLOSURES

Related party transactions

Please refer to Note 25 of the annual audited consolidated financial statements for the year ended December 31, 2019, for a summary of the Company's transactions with related parties.

Commitments and contingency

Please refer to Note 29 and 30 of the annual audited consolidated financial statements for the year ended December 31, 2019, for a summary of the Company's commitments and contingencies.

Subsequent events

Please refer to Note 31 of the annual audited consolidated financial statements for the year ended December 31, 2019, for a summary of the Company's subsequent events.

Off-financial position arrangements

As at December 31, 2019, the Company had no off-financial position arrangements.

Going concern assumption

The accompanying consolidated financial statements have been prepared on the basis of the on going concern assumption meaning the Company will be able to realize its assets and discharge its liabilities in the normal course of business. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but not limited to, 12 months from the end of the reporting period.

Management is aware, in making its assessment, of material uncertainties related to events and conditions that may cast a significant doubt on the Company's ability to continue as a going concern and, accordingly, the appropriateness of the use of accounting principles applicable to a going concern. These financial statements do not reflect the adjustments to the carrying values of assets and liabilities, expenses and financial position classifications that would be necessary if the going concern assumption was not appropriate. These adjustments could be material.

For the year ended December 31, 2019, the Company recorded a net loss of $5,098,365 ($15,383,773 in 2018) and has an accumulated deficit of $22,511,673 as at December 31, 2019 ($17,413,308 as at December 31, 2018). Besides the usual needs for working capital, the Company must obtain funds to enable it to meet the timelines of its exploration programs and to pay its overhead and administrative costs. As at December 31, 2019, the Company had a negative working capital of $340,142 (a positive working capital of $1,063,885 as at December 31, 2018) consisting of cash and cash equivalents of $275,466 ($1,349,140 as at December 31, 2018). Management believes that these funds will not be sufficient to meet the obligations and liabilities of the Company. These uncertainties cast significant doubt regarding the Company's ability to continue as a going concern. Any funding shortfall may be met in the future in a number of ways, including but not limited to, the issuance of new equity instruments. Given that the Company has not yet determined whether its mineral properties contain mineral deposits that are economically recoverable, the Company has not yet generated income nor cash flows from its operations. The recovery of the cost of exploration and evaluation assets as well as other tangible and intangible assets, is subject to certain conditions: the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to continue the exploration, evaluation, development, construction and ultimately disposal of these assets. During the year ended December 31, 2019, the Company has raised $2,668,332 from warrants exercised and private placements consisting of common shares to fund exploration works and working capital ($1,613,001 during the year ended December 31, 2018). While management has been successful in raising financing in the past, there is no assurance that it will succeed in obtaining additional financing in the future.

Capital management policies and procedures

The Company's capital management objectives are to ensure its ability to continue as a going concern and to maximize the return of its shareholders. The Company's definition of capital includes all components of equity. Capital for the reporting periods under review is summarized in Note 27 and in the consolidated statement of changes in equity in the annual audited consolidated financial statements for the year ended December 31, 2019. In order to meet its objectives, the Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. The Company finances its exploration and evaluation activities principally by raising additional capital either through private placements or public offerings. When financing conditions are not optimal, the Company may enter into option agreements or other solutions to continue its exploration and evaluation activities or may slow its activities until conditions improve. No changes were made in the objectives, policies and processes for managing capital during the reporting periods.

Disclosure of outstanding share data

The following selected financial information is derived from our unaudited financial statements.

CERRO DE PASCO RESOURCES INC.

Disclosure of outstanding share data (as at May 5, 2020)

Outstanding common shares:		255,965,706
Outstanding share options:		5,668,500
Average exercise price of:		$0.400
Average remaining life of:		3.80	years
			Exercise	Remaining
	Expiry date	Number	price	life
			$	(years)
December 31, 2022		218,500	0.40	2.66
March 7, 2024		5,400,000	0.40	3.84
March 29, 2024		50,000	0.40	3.90
		5,668,500
Outstanding warrants:		8,954,350
Average exercise price of:		$0.466
Average remaining life of:		0.95	years
			Exercise	Remaining
	Expiry date	Number	price	life
			$	(years)
December 17, 2020		716,000	0.40	0.62
December 21, 2020		5,857,640	0.40	0.63
February 28, 2022		1,300,210	0.65	1.82
March 6, 2022		1,080,500	0.65	1.83
		8,954,350

RISK AND UNCERTAINTIES

Cerro de Pasco Resources is subject to a variety of risks, some of which are described below. If any of the following risks occur, the business, results of operations or financial condition could be adversely affected in a material manner.

Financial instrument risks

Please refer to Note 28 of the annual audited consolidated financial statements for the year ended December 31, 2019 for a summary of the Company's financial instruments risks.

COVID-19

The COVID-19 pandemic is causing significant financial market and social dislocation. The situation is dynamic with various cities and countries around the world responding in different ways to address the outbreak. The Company continues assess the impact COVID-19 will have on its business activities. The extent of the effect of the COVID-19 pandemic on the Company is uncertain.

Certain Risks associated with the Quiulacocha Tailings and Excelsior Stockpile

Cerro de Pasco Resources will be solely focused on the exploration and development of the Property. Cerro de Pasco has initiated negotiations with local stakeholders for gaining access to a portion of the surface lands that Cerro de Pasco Resources will require for processing the tailings, dumps and slag to which Cerro de Pasco's "El Metalurgista" concession entitles it to. It is the intention of Cerro de Pasco Resources to pursue the negotiations and reach an agreement with local stakeholders. There is however no guarantee that such an agreement will be reached. Unless Cerro de Pasco Resources acquires additional property interests, any adverse developments affecting the Property could have a material adverse effect upon Cerro de Pasco Resources and would materially and adversely affect any profitability, financial performance and results of operations of Cerro de Pasco Resources.

Exploration and mining risks

The Company is engaged in the business of acquiring and exploring mineral properties in the hope of locating economic deposits of minerals. The Company's property interests are in the exploration and evaluation stage only. The business of mineral exploration involves a high degree of risk. Few properties that are explored are ultimately developed into production. Currently, there are no known bodies of commercial ore on the mineral properties of which the Company owns an interest. Accordingly, there is little likelihood that the Company will realize any profits in the short to medium term. Any profitability in the future from the Company's business will be dependent upon locating an economic deposit of minerals. However, there can be no assurance, even if an economic deposit of minerals is located, that it can be commercially mined.

Unusual or unexpected formations, fires, power outages, labour disruptions, flooding, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are other risks involved in the conduct of exploration programs.

The economics of developing mineral properties is affected by many factors including the cost of operations, variation of the grade of ore mined and fluctuations in the price of any minerals produced. There are no underground or surface plants or equipment on the Company's mineral properties, nor any known body of commercial ore. Programs conducted on the Company's mineral property would be an exploratory search for ore.

Titles to property

While the Company has diligently investigated title to the various properties in which it has interest, and to the best of its knowledge, title to those properties are in good standing, this should not be construed as a guarantee of title. The properties may be subject to prior unregistered agreements or transfer, or native or government land claims, and title may be affected by undetected defects.

Permits and licenses

The Company's operations may require licenses and permits from various governmental authorities. There can be no assurance that the Company will be able to obtain all necessary licenses and permits that may be required to carry out exploration, development and mining operations at its projects.

Metal prices

Even if the Company's exploration programs are successful, factors beyond the control of the Company may affect marketability of any minerals discovered. Metal prices have historically fluctuated widely and are affected by numerous factors beyond the Company's control, including international, economic and political trends, expectations for inflation, currency exchange fluctuations, interest rates, global or regional consumption patterns, speculative activities and worldwide production levels. The effect of these factors cannot accurately be predicted.

Competition

The mining industry is intensely competitive in all its phases. The Company competes with many companies possessing greater financial resources and technical facilities than itself for the acquisition of mineral interests as well as for recruitment and retention of qualified employees.

Environmental regulations

The Company's operations are subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions of spills, release or emission of various substances produced in association with certain mining industry operations, such as seepage from tailing disposal areas, which could result in environmental pollution. A breach of such legislation may result in imposition of fines and penalties. In addition, certain types of operations require submissions to and approval of environmental impact assessments. Environmental legislation is evolving in a manner which means stricter standards and enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of operations. The Company intends to fully comply with all environmental regulations.

Conflicts of interest

Certain directors or proposed directors of the Company are also directors, officers or shareholders of other companies that are similarly engaged in the business of acquiring, developing and exploiting natural resource properties. Such associations may give rise to conflicts of interest from time to time. The directors of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interest which they may have in any project or opportunity of the Company. If a conflict of interest arises at a meeting of the board of directors, any director in a conflict will disclose his interest and abstain from voting on such matter. In determining whether or not the Company will participate in any project or opportunity, the directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at that time.

Stage of development

The Company's properties are in the exploration stage and to date none of them have a proven ore body. The Company does not have a history of earnings or providing a return on investment, and in future, there is no assurance that it will produce revenue, operate profitably or provide a return on investment.

Industry conditions

Mining and milling operations are subject to government regulations. Operations may be affected in varying degrees by government regulations such as restrictions on production, price controls, tax increases, expropriation of property, pollution controls or changes in conditions under which minerals may be mined, milled or marketed. The marketability of minerals may be affected by numerous factors beyond the control of the Company, such as government regulations. The effect of these factors cannot be accurately determined.

Uninsured risks

The Company's business is subject to a number of risks and hazards, including environmental conditions adverse, environmental regulations, political uncertainties, industrial accidents, labour disputes, unusual or unexpected geological conditions, ground or slope failures, cave-ins, and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to the Company's properties or the properties of others, delays in mining, monetary losses and possible legal liability.

Capital needs

The exploration and evaluation, development, mining and processing of the Company's properties may require substantial additional financing. The only current source of future funds available to the Company is the sale of additional equity capital and the borrowings of funds. There is no assurance that such funding will be available to the Company or that it will be obtained on terms favourable to the Company or will provide the Company with sufficient funds to meet its objectives, which may adversely affect the Company's business and financial position.

In addition, any future equity financings by the Company may result in a substantial dilution of the existing shareholders. Failure to obtain sufficient financing may result in delaying or indefinite postponement of further exploration and evaluation, development or production on any or all of the Company's properties or even a loss of property interest.

Key employees

Management of the Company rests on a few key officers and members of the Board of Directors, the loss of any of whom could have a detrimental effect on its operations. The development of the Company's business is and will continue to be dependent on its ability to attract and retain highly qualified management and mining personnel. The Company faces competition for personnel from other employers.

Canada Customs and Revenue Agency

No assurance can be made that Canada Customs and Revenue Agency will agree with the Company's characterization of expenditures as Canadian exploration expenses or Canadian development expenses or the eligibility of such expenses as Canadian exploration expenses under the Income Tax Act (Canada).

CERTIFICATION OF ANNUAL FILINGS

The President and Chief Executive Officer and the Chief Financial Officer have signed the Basic Certifications of Annual Filings as required by National Instrument 52-109 for venture issuer, thus confirming, the review, the absence of misrepresentations and the fair presentation of the annual filings.

• The President and Chief Executive Officer and the Chief Financial Officer confirm to have reviewed the annual financial statements and the annual MD&A (together, the "annual filings") of the Company for the year ended December 31, 2019.
• Based on their knowledge, having exercised reasonable diligence, the President and Chief Executive Officer and the Chief Financial Officer confirm that the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.
• Based on their knowledge, having exercised reasonable diligence, the President and Chief Executive Officer and the Chief Financial Officer confirm that the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the period presented in the annual filings.