New Pacific Metals (TSX:NUAG) - Unlocking Silver Value in Bolivia

Nov 1, 2024

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Interview with Andrew Williams, Director & CEO of New Pacific Metals Corp.

Our previous interview: https://www.cruxinvestor.com/posts/new-pacific-metals-tsxnuag-bolivias-silver-potential-with-world-class-discoveries-5633

Recording date: 29th October 2024

New Pacific Metals (TSX:NUAG) is making steady progress advancing its two world-class silver development projects in Bolivia, offering investors exposure to significant silver production at highly attractive economics.

The company's flagship Silver Sand project, which recently completed a pre-feasibility study (PFS), demonstrates an after-tax net present value (NPV) of $740 million at $24/oz silver. The nearby Carangas project, the subject of a preliminary economic assessment (PEA), adds an additional $500 million of after-tax NPV at the same silver price. On a combined basis, Silver Sand and Carangas have the potential to produce 18 million ounces of silver annually over a long mine life. This would place New Pacific among the world's top primary silver producers. At today's higher silver prices, the combined NPV approaches $2 billion according to CEO Andrew Williams, well above the company's current sub-$500 million market capitalization.

Permitting is now the key focus for New Pacific. While the process takes time and requires patience, Bolivia has a well-established mining sector and the steps to permit a new mine are well-understood. Key milestones include securing land lease agreements with local communities and submitting environmental permits. At Silver Sand, the company already holds a mining license and just needs to complete the environmental permitting process. Carangas is at an earlier stage and will also require the conversion of its current exploration license to a mining license.

New Pacific is well-funded to complete these permitting activities, with $20 million in cash as of June 30th. The company does not expect to need additional capital until key milestones are achieved, at which point the share price should better reflect the underlying asset value.

The next major funding requirement will be to complete full feasibility studies on the projects at an estimated cost of $5-10 million each. However, New Pacific will only commit to this spending once permitting is further advanced. Analysts are taking a positive view on the stock based on the scale of the silver resources and the recent PFS/PEA results. The company's strong cash position and disciplined approach to additional spending are also viewed favorably.

For silver-focused investors, New Pacific Metals represents a unique opportunity to gain exposure to a significant new source of primary silver supply in a mining-friendly jurisdiction. If the company can successfully navigate the permitting process and silver prices remain supportive, the stock appears to have meaningful upside potential as the projects advance toward production. With 18 million ounces of potential annual silver production and a combined NPV approaching $2 billion at current prices, New Pacific is well-positioned to unlock value for shareholders in the coming years.

View New Pacific Metals' company profile: https://www.cruxinvestor.com/companies/newpacificmetals