VANCOUVER, BC, May 8, 2023
/PRNewswire/ - New Pacific Metals Corp. ("New Pacific" or
the "Company") reports its financial results for the three and nine
months ended March 31, 2023.
All figures are expressed in US dollars unless otherwise
stated.
FISCAL 2023 Q3 HIGHLIGHTS
- The Company filed its independent preliminary economic
assessment (the "PEA") of the Silver Sand Project on February 16, 2023. The PEA shows a post-tax net
present value ("NPV") (at a 5% discount rate) of $726 million with an internal return rate ("IRR")
of 39%, underpinned by a total silver production of 171 million
ounces over 14 years of mine life. Please see "Cautionary Note
Regarding Results of Preliminary Economic Assessment"
- The Company completed the 2022 drill program at the Carangas
Silver Gold Project for a total of 50,368 meters ("m"). To date,
assay results of all 115 drill holes drilled in 2022 have been
received and released. The assay results continue to indicate that
a thick zone of gold mineralization occurs beneath a shallow silver
horizon measuring approximately 1,000
m long, 800 m wide, and up to
200 m thick. The 2022 drill results
also indicate the gold system is open to the north and north-east
directions with these targets being drill tested as part of the
Company's 2023 drill program. Please see "Carangas Project".
- The Company completed the 2023 drill program at the Carangas
Project for a total of 17,650 m in 39
drill holes pending assay results. The results from the 2023 drill
program, together with the results from 2021 and 2022 drill
programs, will be used for an inaugural mineral resource estimate
("MRE") to be completed later in 2023.
- Received results of an expanded 3D Bipole-Dipole IP-MT program
completed in January 2023 at the
Carangas Project. The results show multiple chargeability anomalies
outside the current area of drilling. These new chargeability
anomalies display a similar geophysical signature to those of the
known silver-gold system and will be drill tested in future
drilling campaigns.
- The Company strengthened the management team by appointing Mr.
Andrew Williams as President of the
Company.
FINANCIAL RESULTS
Net loss attributable to equity holders of the
Company for the three months ended March 31, 2023 was $2.28 million or $0.01 per share (three months ended March 31, 2022 – net loss of $1.41 million or $0.01 per share). The Company's financial
results were mainly impacted by the following: (i) operating
expenses of $2.38 million compared to
$1.52 million in the comparative
quarter; (ii) net income from investments of $0.12 million compared to $0.12 million in the comparative quarter; and
(iii) foreign exchange loss of $0.02
million compared to $0.04
million in the comparative quarter.
For the nine months ended March 31,
2023, net loss attributable to equity holders of the Company
was $6.23 million or $0.04 per share compared to net loss of
$4.08 million or $0.03 per share for the nine months ended
March 31, 2022.
Operating expenses for the three and nine months ended
March 31, 2023 were $2.38 million and $6.36
million, respectively (three and nine months ended
March 31, 2022 - $1.52 million and $4.49
million, respectively).
Net Income from investments for the three months ended
March 31, 2023 was $0.12 million (three months ended March 31, 2022 – $0.12
million) and is comprised of a $0.01 million loss on the Company's equity
investments (three months ended March
31, 2022 – gain of $0.06
million), a $0.05 million gain
on bonds (three months ended March 31,
2022 – gain of $0.03 million),
and $0.08 million interest earned
from cash accounts (three months ended March
31, 2022 - $0.03 million).
For the nine months ended March 31,
2023, income from investments was $0.16 million (nine months ended March 31, 2022 – $0.21
million).
Foreign exchange loss for the three months
ended March 31, 2023 was $0.02 million (three months ended March 31, 2022 – $0.04 million).
The Company holds a portion of cash and short-term
investments in USD to support its operations in Bolivia.
Revaluation of these USD-denominated financial assets to their
Canadian dollar ("CAD") functional currency equivalents resulted in
unrealized foreign exchange gain or loss for the relevant reporting
periods. For the three months ended March 31, 2023, the USD depreciated by 0.1%
against the CAD (from 1.3544 to 1.3533) while in the comparative
period the USD depreciated by 1.4% against the CAD (from 1.2678 to
1.2496).
For the nine months ended March 31,
2023, foreign exchange loss was $0.03
million (nine months ended March
31, 2022– gain of $0.16
million).
Working Capital: As of March 31,
2023, the Company had working capital of $8.53 million.
PROJECT OVERVIEW
SILVER SAND PROJECT
In 2021, the Company completed a drill program of 13,313.7 m in 55 holes. The 2021 drill
program comprised structure orientation drilling, step-out and
infill drilling as well as exploration drilling. Assay
results of all drill holes have been received. Detailed
structural logging and assays of the oriented drill cores confirmed
previous understanding of the orientation of mineralized structures
and resource model which are dominantly striking in the direction
of north and northwest and dipping in the direction of west at high
angles which are also evidenced at surface outcrops and historical
underground workings. Step-out drilling was carried out
mainly outside of the major mineralized trends with results
indicating the existence of multiple smaller satellite mineralized
zones between the major mineralized trends. For details of
the 2021 drill program, please refer to the Company's news release
dated April 6, 2022.
In 2022, the Company conducted a resource infill drilling and
step-out drilling program at the Silver Sand south block and
completed 19,323 m in 86 drill holes.
Assay results for all drill holes have been received. The
resource infill drilling aimed to improve the confidence in the
continuity of mineralization in the core area of the Silver Sand
Project and upgrade resources, while the step-out drilling
was designed to test the extension of the mineralized zones up and
down dip as well as on strike. The infill and step-out drilling
results were included in the MRE update and incorporated into the
PEA. For details on the 2022 drill program, please refer to the
Company's news releases dated September 19,
2022, May 31, 2022, and
April 6, 2022.
On February 16, 2023, the Company
filed its independent PEA technical report for its Silver Sand
Project. AMC Mining Consultants (Canada) Ltd. (mineral resource, mining,
infrastructure and financial analysis) was contracted to conduct
the PEA in cooperation with Halyard Inc. (metallurgy and
processing), and New Fields Canada Mining & Environment ULC
(tailings, water and water management). The PEA is based on
the MRE, which was reported on November
28, 2022. Please see "Cautionary Note Regarding
Results of Preliminary Economic Assessment". For more
details on the PEA, please refer to the Company's news release
dated February 16, 2023 and
January 9, 2023.
For the three and nine months ended March
31, 2023, total expenditures of $1.22
million and $5.42 million,
respectively (three and nine months ended March 31, 2022 - $1.02
million and $4.44 million,
respectively) were capitalized under the project.
CARANGAS PROJECT
In 2021, the Company completed an initial discovery drill
program of 13,209 m in 35 drill
holes. Assay results of all drill holes have been
received. Results from the 2021 discovery drill program
confirmed the broad silver-rich polymetallic mineralization near
surface and intersected a wide zone of gold mineralization below
it. For details of the 2021 discovery drill program, please
refer to the Company's news releases dated May 17, 2022, February 23,
2022, and February 10,
2022.
Following the success of the 2021 discovery drill program, the
Company completed the 2022 resource definition drill program for a
total of 50,368 m in 115 drill
holes. Assay results of all 115 drill holes have been
received and released to date. The assay results continue
to indicate that a thick zone of gold mineralization occurs beneath
a shallow silver horizon measuring approximately 1,000 m long, 800 m
wide, and up to 200 m
thick. The 2022 drill results also indicate the gold
system is open to the north and north-east directions with these
targets being drill tested as part of the Company's 2023 drill
program. For details of the 2022 drill program, please
refer to the Company's news releases dated April 6, 2023, February
21, 2023, February 1, 2023,
January 24, 2023, October 19, 2022, August
8, 2022, and July 13,
2022.
To date, the Company completed its 2023 drill program at the
Carangas Project for a total of 17,650
m in 39 drill holes pending assay
results. The results from the 2023 drill program,
together with the results from 2021 and 2022 drill programs, will
be used for an inaugural MRE to be completed later in
2023.
For the three and nine months ended March
31, 2023, total expenditures of $3.34
million and $9.19 million,
respectively (three and nine months ended March 31, 2022 - $1.16
million and $3.13 million,
respectively) were capitalized under the project.
SILVERSTRIKE PROJECT
In 2022, the Company commenced a 6,000
m initial discovery drill program at the Silverstrike
Project. As of the date of this news release, a total of
3,200 m in 10 drill holes have been
completed, of which assay results of the two drill holes have been
received. The assay results intersected broad gold
mineralization starting near surface. For details of the
initial discovery drill program, please refer to the Company's news
releases dated November 1, 2022 and
September 12, 2022.
For the three and nine months ended March
31, 2023, total expenditures of $0.20
million and $1.35 million,
respectively (three and nine months ended March 31, 2022 - $0.03 million and $0.04
million, respectively) were capitalized under the
project.
MANAGEMENT DISCUSSION AND ANALYSIS
This news release should be read in conjunction with the
Company's management discussion and analysis and the
unaudited condensed consolidated interim financial statements
and notes thereto for the corresponding period, which have been
filed with the Canadian Securities Administrators and are available
under the Company's profile on SEDAR at www.sedar.com,on EDGAR at
www.sec.gov and on the Company's website at
www.newpacificmetals.com.
QUALIFIED PERSON
The scientific and technical information contained in this news
release has been reviewed and approved by Alex Zhang, P. Geo., Vice President of
Exploration, who is a Qualified Person for the purposes of NI
43-101. The Qualified Person has verified the information disclosed
herein using standard verification processes, including the
sampling, preparation, security and analytical procedures
underlying such information, and is not aware of any significant
risks and uncertainties or any limitations on the verification
process that could be expected to affect the reliability or
confidence in the information discussed herein.
ABOUT NEW PACIFIC
New Pacific is a Canadian exploration and development company
with precious metal projects in Bolivia. The Company's flagship Project, the
Silver Sand Silver Project, has released its inaugural PEA study in
January 2023. The PEA study shows a
post-tax NPV (5% discount) of US$726
millions with an IRR of 39%, underpinned by total silver
production of 171 million ounces over 14 years of mine life.
At the recently discovered Carangas Silver-Gold Project, a resource
drilling program of more than 81,000 meters has been completed to
date. The third project, the Silverstrike Silver-Gold
Project, had a 6,000 m discovery
drill program in June 2022.
For further information, please contact:
Andrew Williams,
President
New Pacific Metals Corp. Phone: (604)
633-1368 Ext. 236
U.S. & Canada toll-free: 1 (877)
631-0593
E-mail:
invest@newpacificmetals.com
For additional
information and to receive company news by e-mail, please register
using New Pacific's website at
www.newpacificmetals.com.
CAUTIONARY NOTE REGARDING RESULTS OF PRELIMINARY ECONOMIC
ASSESSMENT
The PEA results of are preliminary in nature and are intended
to provide an initial assessment of the Silver Sand Project's
economic potential and development options. The PEA mine schedule
and economic assessment includes numerous assumptions and is based
on both indicated and inferred mineral resources. Inferred
resources are considered too speculative geologically to have the
economic considerations applied to them that would enable them to
be categorized as mineral reserves, and there is no certainty that
the project economic assessments described herein will be achieved
or that the PEA results will be realized. The estimate of mineral
resources may be materially affected by geology, environmental,
permitting, legal, title, socio-political, marketing or other
relevant issues. Mineral resources are not mineral reserves and do
not have demonstrated economic viability. Additional exploration
will be required to potentially upgrade the classification of the
inferred mineral resources to be considered in future advanced
studies. AMC Mining Consultants (Canada) Ltd. (mineral resource, mining,
infrastructure and financial analysis) was contracted to conduct
the PEA in cooperation with Halyard Inc. (metallurgy and
processing), and NewFields Canada Mining & Environment ULC
(tailings, water and waste management). The qualified persons for
the PEA for the purposes of NI 43-101 are Mr. Wayne Rogers P.Eng and Mr. Mo Molavi P.Eng both Principal Mining Engineers
with AMC Mining Consultants (Canada) Ltd, Mr. Andy
Holloway P.Eng, Process Director with Halyard Inc., and Mr.
Leon Botham P.Eng., Principal
Engineer with NewFields Canada Mining & Environment ULC. This
is in addition to Ms. Dinara Nussipakynova, P.Geo., Principal
Geologist with AMC Consultants (Canada) Ltd. Who estimated the mineral
resources. All qualified persons for the PEA have reviewed the
disclosure of the PEA herein. The PEA is based on the MRE, which
was reported on November 28, 2022.
The effective date of the MRE is October
31 2022. The cut-off applied for reporting the
pit-constrained mineral resources is 30 g/t silver. Assumptions
made to derive a cut-off grade included mining costs, processing
costs and recoveries and were obtained from comparable industry
situations. The model is depleted for historical mining activities.
Mineral resources are constrained by optimized pit shells at a
silver price of US$22.50 per ounce,
silver metallurgical recovery of 91%, silver payability of 99%,
open pit mining cost of US$2.6/t,
processing cost of US$16/t, G&A
cost of US$2/t, and slope angle of
44-47 degrees. Key assumptions used for pit optimization for the
PEA mining pit include silver price of US$22.50 per ounce, silver metallurgical recovery
of 91%, silver payability of 99%, open pit mining cost of
US$2.6/t, incremental mining cost of
US$0.04/t (per 10 m bench), processing cost of US$16/t, tailing storage facility operating cost
of US$0.7/t, G&A cost of
US$2/t, royalty of 6.00%, mining
recovery of 92%, dilution of 8%, and cut-off grade of 30 g/t
silver.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain of the statements and information in this news
release constitute "forward-looking statements" within the meaning
of the United States Private Securities Litigation Reform Act of
1995 and "forward-looking information" within the meaning of
applicable Canadian provincial securities laws. Any
statements or information that express or involve discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions or future events or performance (often, but
not always, using words or phrases such as "expects", "is
expected", "anticipates", "believes", "plans", "projects",
"estimates", "assumes", "intends", "strategies", "targets",
"goals", "forecasts", "objectives", "budgets", "schedules",
"potential" or variations thereof or stating that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved, or the negative of any of these terms
and similar expressions) are not statements of historical fact and
may be forward-looking statements or information. Such statements
include, but are not limited to: statements regarding anticipated
exploration, drilling, development, construction, and other
activities or achievements of the Company; inferred, indicated or
measured mineral resources or mineral reserves on the Company's
projects; the results of the PEA; timing of receipt of permits and
regulatory approvals; and estimates of the Company's revenues and
capital expenditures.
Forward-looking statements or information are subject to a
variety of known and unknown risks, uncertainties and other factors
that could cause actual events or results to differ from those
reflected in the forward-looking statements or information,
including, without limitation, risks relating to: global economic
and social impact of COVID-19; fluctuating equity prices, bond
prices, commodity prices; calculation of resources, reserves and
mineralization, general economic conditions, foreign exchange
risks, interest rate risk, foreign investment risk; loss of key
personnel; conflicts of interest; dependence on management,
uncertainties relating to the availability and costs of financing
needed in the future, environmental risks, operations and political
conditions, the regulatory environment in Bolivia and Canada, risks associated with community
relations and corporate social responsibility, and other factors
described under the heading "Risk Factors" in the Company's Annual
Information Form for the year ended June 30,
2022 and its other public filings.
This list is not exhaustive of the factors that may affect
any of the Company's forward-looking statements or
information.
The forward-looking statements are necessarily based on a
number of estimates, assumptions, beliefs, expectations and
opinions of management as of the date of this news release that,
while considered reasonable by management, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies. These estimates, assumptions, beliefs,
expectations and options include, but are not limited to, those
related to the Company's ability to carry on current and future
operations, including: the duration and effects of COVID-19 on our
operations and workforce; development and exploration activities;
the timing, extent, duration and economic viability of such
operations; the accuracy and reliability of estimates, projections,
forecasts, studies and assessments; the Company's ability to meet
or achieve estimates, projections and forecasts; the stabilization
of the political climate in Bolivia; the Company's ability to obtain and
maintain social license at its mineral properties; the availability
and cost of inputs; the price and market for outputs; foreign
exchange rates; taxation levels; the timely receipt of necessary
approvals or permits, including the ratification and approval of
the Mining Production Contract with the Corporacion Minera de
Bolivia ("COMIBOL") by the
Plurinational Legislative Assembly of Bolivia; the ability of the Company's Bolivian
partner to convert the exploration licenses at the Carangas Project
to AMC; the ability to meet current and future obligations; the
ability to obtain timely financing on reasonable terms when
required; the current and future social, economic and political
conditions; and other assumptions and factors generally associated
with the mining industry.
Although the forward-looking statements contained in this
news release are based upon what management believes are reasonable
assumptions, there can be no assurance that actual results will be
consistent with these forward-looking statements. All
forward-looking statements in this news release are qualified by
these cautionary statements. Accordingly, readers should not
place undue reliance on such statements. Other than specifically
required by applicable laws, the Company is under no obligation and
expressly disclaims any such obligation to update or alter the
forward-looking statements whether as a result of new information,
future events or otherwise except as may be required by law.
These forward-looking statements are made as of the date of this
news release.
CAUTIONARY NOTE TO US INVESTORS
This news release has been prepared in accordance with the
requirements of the securities laws in effect in Canada which differ from the requirements of
United States securities laws. All
mining terms used herein but not otherwise defined have the
meanings set forth in NI 43-101. Unless otherwise indicated,
the technical and scientific disclosure herein has been prepared in
accordance with NI 43-101, which differs significantly from the
requirements adopted by the U.S. Securities and Exchange
Commission.
Accordingly, information contained in this news release
containing descriptions of the Company's mineral deposits may not
be comparable to similar information made public by U.S. companies
subject to the reporting and disclosure requirements of
United States federal securities
laws and the rules and regulations thereunder.
Additional information relating to the Company, including the
Company's Annual Information Form, can be obtained under the
Company's profile on SEDAR at www.sedar.com, on EDGAR at
www.sec.gov, and on the Company's website at
www.newpacificmetals.com.
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SOURCE New Pacific Metals Corp.