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New Pacific Metals at a new frontier after it delivers maiden silver resource for Silver Sand in Bolivia

Snapshot

Silver Sand is one of the more significant primary silver discoveries made within the last decade

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Quick facts: New Pacific Metals

Price: 6.475 CAD

TSX:NUAG
Market: TSX
Market Cap: $990.12 m
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  • Silver Sand project is near the famous Cerro Rico silver, base metal deposit
  • Favourable landscape for open cut mining
  • District potential: hundreds of surface dump sites and artisanal tunnels

What New Pacific Metals does:

Vancouver-headquartered explorer 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 was added to the portfolio when it bought Alcira for US$40 million in 2017 and it is one of the group's seven polymetallic properties in Bolivia.

The core project 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 early last year. This MPC was approved by the Bolivian government, but remains subject to ratification and approval by the Plurinational Legislative Assembly of Bolivia.

The Silver Sand 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, the group increased its land footprint at the Silver Sand property with six new hectares immediately to the north.

Nearby infrastructure is relatively good. It lies 54 km from the city of Potosi, of which 27 km is paved and the rest is gravel. Water is available for any future operations.

Notably, in December last year, the firm acquired a 98% stake in the Silverstrike silver 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 the firm's Silver Sand project 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 plc (LON:RIO) 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 group's other five properties in Bolivia are early-stage exploration projects (Wara, Polaris, Orion, Constacia, Rigel) which, the firm says, have either been subject to limited small-scale mining or historical drilling.

Elsewhere, New Pacific owns the Tagish Lake gold project in Yukon, Canada (1,512 claims), where three projects have been defined - Goddell, Skukum Creek and Mt Skukum.

New Pacific's largest shareholder is Silvercorp Metals Inc (NYSEAMERICAN:SVM) - the largest primary silver producer in China, which owns 28.9% of the company's shares. Silvercorp's chairman and CEO Dr Rui Feng is the CEO at  New Pacific Metals, and he owns 7% of the company.

Silver mining giant Pan American Silver Corp (NASDAQ:PAAS) also owns 16.8% of New Pacific's stock. It operates six mines, including the San Vicente mine which is located in the Potosí Department of Bolivia.

How is it doing:

New Pacific published a maiden resource for the project highlighting a 35.4-million-ton resource grading at 137 grams per ton silver for a total of 155.9 million ounces of silver in the measured and indicated category. The project also has 9.8 million tons at 112 grams per ton silver for 35.6 million ounces in the inferred category.

Detailed drilling reveals “good mineral continuity,” the company said in a statement accompanying the news in April, giving it high confidence at a lower technical risk. The 35.4 million tons in the measured and indicated category represents around 70% of the resource estimate. As well, mineralization begins at or near the surface, making it potentially amenable to open-pit extraction.

What’s more, the resource estimate does not include the recently discovered Snake Hole zone, where drilling intercepted 72.4 metres grading at 279 grams per ton silver in January 2020.

In January this year, New Pacific announced the discovery of the Snake Hole prospect at the Silver Sand project.

It came after drilling was carried out around 600 metres east of the core Silver Sand area. Snake Hole is one of nine high priority silver targets identified by the firm.

New Pacific said 15 of the 19 holes drilled on the prospect returned results that outlined structurally controlled, sandstone-hosted silver mineralization. Results included 72.4 metres at 279 grams per ton (g/t) silver from 60.5 metres to 132.9 metres, including nearly 33 metres at 517 g/t silver.

That came a month after the firm hit near-surface silver mineralization, with results, ranging from around 50 to 200 metres thick and returning average silver values from 33 to 289 g/t of the precious metal.

Recently at the main Silver Sand deposit, New Pacific kicked off a four-hole, 800 metre metallurgical drill sampling campaign to support subsequent PEA studies, including designing an initial processing flowsheet.

What the broker says:

In April this year, broker Roth Capital repeated a 'Buy' rating and C$6.25 price target on New Pacific following its impressive maiden resource estimate on Silver Sand.

Roth’s Joe Reagor wrote that the initial resource showed “stronger than expected” grade, which increases the project’s value on a per-ounce basis. “We expect the initial resource is only the beginning for the Silver Sand project as the deposit remains open,” Reagor wrote. “We also note that the initial resource excludes two areas that NUAG provided potential ranges for. On the low end of these ranges, these areas would add an additional 46.5 million ounces of silver.”

Inflection points:

  • More exploration results
  • MPC news

What the boss says:

In January this year, New Pacific president Gordon Neal spoke to Proactive about the Snake Hole new discovery east of the main project, which he said, added to the 'pervasive' nature of the mineralization in the whole area.

"We're really excited about it. The whole project just keeps giving and giving..," he told broadcaster Steve Darling.

"When you add the Silver Sand 600m to the west. When you add all those numbers, we're looking at wide intercepts of about 30m to 40m wide, anywhere between 85 to 100 g/t."

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New Pacific Metals provides update at their Silver Sand and Silverstrike...

New Pacific Metals (TSE: NUAG-OTCQX: NUPMF) President Gordan Neal joined Steve Darling from Proactive to provide an update on their two key projects that have seen some new developments. Neal talking about Silver Sands and the Silver Strike projects in Bolivia, which has seen reconnaissance and...

2 weeks, 2 days ago

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