We are barely into the third month of the year, but New Pacific Metals Corp. (NUAG:TSX.V; NUPMF:OTCQX) has been moving nonstop, announcing major land expansion news and off-the-charts drill results.
In January, the company announced a major land expansion of its Silver Sand project in Bolivia though an agreement with Corporación Minera de Bolivia (COMIBOL) granting New Pacific the right to carry out exploration, mining and production on lands adjoining Silver Sand.
The Mining Production Contract (MPC) is for a total of 56.9 square kilometers, a many-fold increase from the original 3 square kilometer Silver Sand land package.
"Silver Sand is a significant discovery." - Joe Reagor, ROTH Capital Partners
"It was the most significant mining transaction Bolivia has concluded in more than 10 years," Gordon Neal, president of New Pacific Metals, told Streetwise Reports. "The MPC is a first of its kind agreement between a public resource company and the Bolivian government."
New Pacific released drill results from Silver Sand. It has drilled 55,000 meters in 195 holes and has released assay results in stages. The first release covered 98 holes, and mineralization was found in 94 of the 98. This news was followed by the release of the remaining 97 holes; near-surface mineralization was found in 190 of the total 195 holes.
"The results have been impressive," Neal stated. "Mineralization starts near surface; the average width of the mineralized intercepts is about 60 meters, which is enormous, and if you average all the grade and use a cut off of 40 g/t silver, it's about 100 g/t silver. It's a recipe for a very large bulk-minable situation; it essentially starts at surface and goes down 300 to 350 meters."
The company has budgeted $10 million to drill another 50,000 meters this year on the core Silver Sand property. It noted in the Feb. 20 press release, "Assay results of surface sampling of hundreds of artisanal mining dumps and continuous chip-sampling from artisanal underground mining tunnels reveal the silver mineralized fracture zones could extend at least by 3,000m to the north and 500m to the west and the east, as well as extending up to 1,000 m to the south of the areas drilled in 2018. These newly identified extensions of the mineralized fracture zones will be the targets of the continuing drilling program in 2019 once the rainy season ends by the end of March."
"These were exceptional results that argue for a massive silver resource." - Brien Lundin, Gold Newsletter
In addition, New Pacific "will be drilling on the COMIBOL land also this year. We have to spent $6 million on exploration on that land over the next five years; our plan is to spend about $2 million this year. We've already begun to do fieldwork and sampling on that land." Neal stated.
The company noted that it is applying for permits on the COMIBOL land and that drill program "will commence once the drilling permits are granted by local authorities in two to three months."
Although the land is fairly remote, Neal explained that there are secondary roads and the government has indicated that it has plans to build a new road close to Silver Sand. "If we want to build a mill, there is power and water for that; in fact, there is tin mine about 3 km away and it's fully powered up."
New Pacific has found the Bolivian government supportive of its mining efforts. "I have worked in the highest levels of government, in the Prime Minister's office in Canada, under the old Trudeau, and I have never worked with a government that is so determined to prove that it is open for mining investment," Neal relayed.
Industry observers have their eye on New Pacific. Analyst Joe Reagor of ROTH Capital Partners wrote on Jan. 22, after the release of the first drill results, "We believe the results confirmed our expectations that the company has a significant silver discovery in Bolivia. We believe the company will take the next step to pursue an initial resource estimate while simultaneously targeting additional zones on the property in 2019."
And after the second release of assay results, in a Feb. 20 report, Reagor stated, "NUAG released its final 97 drill holes from its 2018 drill campaign at Silver Sand. Grades and thicknesses were consistent with the averages seen in the first 98 drill holes released in January, which we believe supports our view that Silver Sand is a significant discovery. . . Average grade and interval length add support to our resource expectations."
ROTH capital maintains a Buy rating and CA$3 target price on New Pacific. Shares are currently trading at around CA$2.28.
Brien Lundin, in the February issue of Gold Newsletter, noted that the drill results "were well worth the wait. . . These assays give a sense of the tremendous scope of the Silver Sand project. Company founder Rui Feng is not one to pursue small projects, and this one is no exception. These were exceptional results that argue for a massive silver resource."
Rui Feng is chairman and CEO of Silvercorp Metals Inc., in addition to being CEO and a director of New Pacific.
New Pacific Metals has about 132 million shares issued and outstanding and about 146 million shares fully diluted. In November 2017, Pan American Silver Corp. and Silvercorp Metals Inc. made a strategic investment in New Pacific of $27 million.
"It's steady ahead now for New Pacific," Neal stated. "We are cashed up. We are going to keep drilling and I suspect that we're going to put out a resource by early next year."[NLINSERT]
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from ROTH Capital Partners, New Pacific Metals Corp., Company Note, February 20, 2019
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
An Associated Person owns debt or equity securities of New Pacific Metals Corp.
Shares of New Pacific Metals Corp. and Silvercorp Metals Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.
ROTH makes a market in shares of Silvercorp Metals Inc. and as such, buys and sells from customers on a principal basis.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.
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