New Pacific Metals is a first mover in an underexplored, world-class silver belt

New Pacific Metals is a first mover in an underexplored, world-class silver belt

Well-funded with US$48 million in cash and investments Experienced board and management Near term catalysts What New Pacific Metals does: New Pacific Metals Corp (CVE:NUAG) (OTCMKTS:NUPMF) is advancing its flagship Silver Sand project in Bolivia – one of the fastest-growing economies in South America. The asset is described as a “significant global primary silver discovery” and it was added to the portfolio when the company bought Alcira for US$40 million in 2017. The core mineral area spans a total area of 3.17 square kilometres (sq km) but the firm has full exposure to the district over a broader area of more than 60 sq km due to its Mining Production Contract (MPC) with the Bolivian Mining Corporation (COMIBOL) signed in 2019. This MPC was approved by the Bolivian government, but remains subject to ratification and approval by the Plurinational Legislative Assembly of Bolivia. The project boasts a large silver measured and indicated (M&I) resource at 35.39 million tonnes (Mt) at a grade of 137 g/t silver, which contains 155.86 million ounces (Moz) of silver. Notably, 70% of the resources are within 200 metres (m) of the conceptual open pit surface and the deposit is open to the north, south and at depth. The project has been subject to some small-scale, historic mining and was drilled during the period 2012 through to 2015 by a previous company. In December, 2020, the firm acquired a 98% stake in the polymetallic Silverstrike project from a private Bolivian firm by making a one-time cash payment of US$1.35 million. Silverstrike lies about 450 km northwest of Silver Sand and contains extensive silver mining dumps, the results of Spanish colonial mining activities which exploited near-surface silver-gold-lead-zinc (Ag-Au-Pb-Zn). London-listed major Rio Tinto extensively sampled the dumps and drilled four holes at Silverstrike North, and 4 diamond holes and 12 RC holes in Silverstrike Central in 1995. Near-surface silver-gold-lead-zinc mineralization was identified in all three areas. The company also acquired in April 2021, a 98% stake in the Carangas silver project in the Oruro Department of Bolivia, which, it said, cemented its first-mover status in an under-explored silver district. Carangas comprises two exploration concessions totaling 6.25 sq km and the project sits within the South American epithermal belt, which hosts large precious metal deposits and operations in neighboring countries but remains under-explored in Bolivia. New Pacific’s largest shareholder is Silvercorp Metals Inc – the largest primary silver producer in China, which owns 28.6% of the company’s shares. New Pacific’s management and board hold around 8%. Silver mining giant Pan American Silver Corp also owns 9.6% of New Pacific’s stock. How is it doing: New Pacific reported its fourth-quarter results in February 2021, which showed the group had nearly C$63 million in working capital as of the end of December 2020. The C$62.79 million will primarily be used to advance the company’s flagship Silver Sand project, with a portion dedicated towards exploration around the Silverstrike project, it said. During the fourth quarter, the company successfully completed the spin out of Whitehorse Gold Corp (CVE:WHG.V) (OTCMKTS:WHGDF) and its Tagish Lake gold project, a move it said would allow shareholders to realize the value of the property in a strong gold price environment. At Silver Sand, the company started environmental and social baseline studies and chose three consultants to lead those initiatives, as well as a preliminary economic assessment (PEA). The PEA is expected in the second half of 2021. New Pacific said it spent $870,000 over the three-month period to end December 31 2020 and cumulatively spent $1.78 million during the second half of the year on the project. Over at the Silverstrike asset, New Pacific said it generated a number of high-priority drill targets and strengthened its local presence with a new community outreach team and office. In November 2020, it said fieldwork included mapping and sampling focused on the Silverstrike Central and South areas. In all, 452 samples were collected, including 441 channel chip samples and 11 mine dump grabs. New Pacific said it had identified three significant new zones of gold and silver-rich polymetallic mineralization, namely, at the Manco Kapac, Tatitu Kkollu North and Tatitu Kkollu South areas. Announcing its acquisition in April, 2021 of a 98% stake in the Carangas silver project from a private Bolivian company, the company said it planned a 5,000 metres (m) discovery diamond drill program this year upon receipt of a permit. The property, which is not currently actively mined, hosts two separate domes known as West and East Domes, which are dissected by a series of laterally extensive, steeply dipping to sub-vertical, extensional fault and fracture zones. The company believes there is potential for near-surface bulk tonnage mineralization and high-grade mineralization at relatively shallow depths. New Pacific’s own due diligence sampling included 30m at an average grade of 101 g/t silver, 15m at an average grade of 252 g/t silver, and 8m at an average grade of 512 g/t silver. Inflection points: Start of drilling at Carangas More news from Silver Sand and Silverstrike Precious metals moves What the boss says: In April’s statement about the Carangas purchase, New Pacific CEO Dr Mark Cruise said it “fits well with the company’s strategy to become a premier Latin American focused precious metal explorer and developer”. “Initial field work, including target generation, positions us well for a successful drill program and compliments our planned exploration programs at our Silverstrike project, in addition to the advanced exploration and development studies currently in progress on our flagship Silver Sand project,” he added. Contact the author at giles@proactiveinvestors.com

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