"New Pacific Metals is an exploration and development company with precious and base metal assets in China, Canada, and South America (Bolivia). Its principal asset, the Silver Sands Project in Bolivia, has the potential to become a world-class silver operation in the future. We aren't the only ones optimistic on New Pacific Metals and mining in Bolivia in general, as two prolific primary silver producers have sizeable interests in the company. These two important strategic shareholders are Silvercorp and Pan-American Silver, which hold a 29.80% and 12.1% interest, respectively.
The land package is extensive, the management is from the A list, and New Pacific opened up the mining abilities in Bolivia. COMIBOL, the mining corporation of Bolivia, stifled domestic and foreign investment into the mining sector and as such there was rather a severe underinvestment for a prolonged period. This has now changed primarily due to the efforts of New Pacific in our view."
This is what ROTH Capital, Joe Reagor, the Analyst currently covering New Pacific has reported about the Silver Sand Project:
Initial Drill Results Worth the Wait
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. Thus, we are reiterating our Buy rating and CAD$3.00 price target.
Initial drill results confirm significant discovery. On January 22, 2019, New Pacific Metals announced the results of the first 98 holes from its 2018 drill program at its Silver Sand project. Highlights included an intercept of 76.6 meters grading 383 g/t silver. Of the 98 holes released, 94 intercepted silver mineralization. We note a conversion ratio of his magnitude is uncommon in the mining industry and thus, further supports our view that the silver Sand project is a unique opportunity These 94 holes had an average of 58.3 meters of intersected mineralization with an average grade of 83.8 g/t silver, based on our estimates.
More Strong Drill Results Released
On February 20, 2019, 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. Thus, we are reiterating our Buy rating and CAD$3.00 price target.
Second round of 2018 results show similar highlights. On February 20, 2019, New Pacific Metals released the remaining 98 drill holes from its 2018 drill campaign. Highlights of the release included intercepts of 225.82 meters grading 116 g/t silver and 192.93 meters grading 123 g/t silver. We note these highlights are similar to the high-grade intervals seen in the company's drill results release in January of this year.
Average grade and interval length add support to our resource expectations. While the highlights of the release are impressive, we are more encouraged by the consistency of drill results thus far. For the company's January results, we estimated an average interval of 58.3 meters and an average grade of 83.8 g/t. In the 98 holes in the current release, we estimate an average interval of 54.4 meters and an average grade of 83.1 g/t. We believe the consistency of the drilling to date supports our expectations of a significant
initial resource later this year or in early 2020.
Reiterating rating and target. While the 195 drill holes released between January and February of this year suggest a potentially larger initial resource than our 200 million ounce estimate, we believe it is prudent to maintain a conservative view due to a lack of a 3D model. Thus, we have elected to leave our CAD$3.00 price target unchanged and we are reiterating our Buy rating.
Initial metallurgical results encouraging. On February 7, 2019, New Pacific Metals announced the results of initial metallurgical tests for its Silver Sand project in Bolivia. We were encouraged by the results showing recovery rates as high as 96.7% for sulphide material and 97.0% for transition material. We were also encouraged to see the tests showed the material was non-refractory and that the grind requirements imply capital and operating costs on the lower end of the potential spectrum. Additionally, we feel it is important to note that many exploration companies shy away from metallurgical testing at an early stage and that we believe NUAG's management should be commended for taking a progressive step towards de-risking the project.
"We will keep a close eye on key developments with the company, notably additional exploration results and metallurgical tests among many other factors, and will update our subscriber base accordingly. As our readership knows, there are very few primary silver exploration and development companies worth keeping an eye on but this is one that warrants our attention. We believe, when all is said and done, just the Silver Sands (described in detail in our main report) will have a resource base more than 100m oz."
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