VANCOUVER, BC, Feb. 7, 2023
/PRNewswire/ - New Pacific Metals Corp. ("New Pacific" or the
"Company") (TSX: NUAG) (NYSE American: NEWP), reports its financial
results for the three and six months ended December 31, 2022. All figures are
expressed in US dollars unless otherwise stated.
FISCAL 2023 Q2 HIGHLIGHTS
- The Company reported the results of the preliminary economic
assessment (the "PEA") of the Silver Sand Project on January 9, 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 released the updated National Instrument 43-101
- Standards of Disclosure for Mineral Projects ("NI 43-101")
mineral resource estimate (the "MRE") for the Silver Sand Project
on November 28, 2022. The MRE shows
total measured and indicated mineral resource of 201.77 million
ounces of silver at a head grade of 116 grams per tonne ("g/t").
Please see "Silver Sand Project".
- The Company completed the 2022 drill program at the Carangas
Silver-Gold Project for a total of 50,368 meters ("m") in 115 drill
holes, of which assay results for 85 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. Please see "Carangas
Project".
- The Company advanced the 6,000 m
initial discovery drill program at the Silverstrike Project, and a
total of 3,200 m in 10 drill holes
have been completed, of which assay results for two drill holes
have been received and released to date. The assay results
intersected broad gold mineralization near-surface. Please see
"Silverstrike Project".
- The Company strengthened the Board and management team by
appointing Dr. Peter Megaw and Mr.
Dickson Hall as directors and Mr.
Andrew Williams as President of the
Company.
- The Company maintained working capital of $14.4 million, sufficient to advance the existing
exploration projects and other regional exploration
initiatives.
FINANCIAL RESULTS
Net loss attributable to equity holders of the
Company for the three months ended December 31, 2022 was $1.87 million or $0.01 per share (three months ended December 31, 2021 – net loss of $1.30 million or $0.01 per share). The Company's financial
results were mainly impacted by the following: (i) operating
expenses of $1.93 million compared to
$1.36 million in the comparative
quarter; (ii) net income from investments of $0.08 million compared to $0.13 million in the comparative quarter; and
(iii) foreign exchange loss of $0.03
million compared to $0.06
million in the comparative quarter.
For the six months ended December 31,
2022, net loss attributable to equity holders of the Company
was $3.96 million or $0.03 per share compared to net loss of
$2.67 million or $0.02 per share for the six months ended
December 31, 2021.
Operating expenses for the three and six months ended
December 31, 2022 were $1.93 million and $3.99
million, respectively (three and six months ended
December 31, 2021 - $1.36 million and $2.96
million, respectively).
Net Income from investments for the three months ended
December 31, 2022 was $0.08 million (three months ended December 31, 2021 – $0.13
million) and is comprised of a $0.01 million loss on the Company's equity
investments (three months ended December 31, 2021 – gain of $0.07 million), a $0.03
million loss on bonds (three months ended December 31, 2021 – gain of $0.03 million), and $0.12 interest earned from cash accounts (three
months ended December 31, 2021 -
$0.02 million).
For the six months ended December 31,
2022, income from investments was $0.04 million (six months ended December 31, 2021 – $0.08
million).
Foreign exchange loss for the three months
ended December 31, 2022 was
$0.03 million (three months ended
December 31, 2021 – $0.06
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 December 31, 2022, the USD depreciated by 1.2%
against the CAD (from 1.3707 to 1.3544) while in the comparative
period the USD depreciated by 0.5% against the CAD (from 1.2741 to
1.2678).
For the six months ended December 31,
2022, foreign exchange loss was $0.01
million (six months ended December
31, 2021– gain of $0.2
million).
Working Capital: As of December
31, 2022, the Company had working capital of $14.4 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 of the 2022 drill program, please refer to the Company's
news releases dated September 19,
2022, May 31, 2022, and
April 6, 2022.
On January 9, 2023, the Company
reported the results of the PEA of 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 NewFields 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 January 9, 2023.
For the three and six months ended December 31, 2022, total expenditures of
$1.70 million and $4.20 million, respectively (three and six months
ended December 31, 2021 -
$1.22 million and $3.42 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 85 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. For
details of the 2022 drill program, please refer to the Company's
news releases dated February 1, 2023,
January 24, 2023, October 19, 2022, August
8, 2022, and July 13,
2022.
The Company plans to drill 15,000
m during the first quarter of 2023 at the Carangas Project
to test the eastern extension of gold mineralization beneath the
East Dome and expand parts of the shallow silver horizon.
Following this drill program, an inaugural resource estimate is
planned in the second quarter of 2023.
For the three and six months ended December 31, 2022, total expenditures of
$2.87 million and $5.85 million, respectively (three and six months
ended December 31, 2021 -
$1.43 million and $1.97 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 six months ended December 31, 2022, total expenditures of
$0.70 million and $1.15 million, respectively (three and six months
ended December 31, 2021 -
$0.01 million and $0.01 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, 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 50,000 meters was completed in
2022. The third project, the Silverstrike Silver-Gold
Project, had a 6,000 m discovery
drill program ongoing since 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.