New Pacific Metals Corp. (TSX: NUAG) (NYSE-A: NEWP) is pleased to report the results of the Preliminary Economic Assessment study of its 100% owned Silver Sand Project in Potosi Department, Bolivia. The PEA is based on the Mineral Resource estimate which was reported on November 28, 2022 and is reported in accordance with National Instrument 43-101.

PEA Highlights:

Highlights from the PEA, with a base case silver price of US$22.50/oz are as follows (all figures in US Dollars):

• Pre-Tax NPV (5%) of $1.1 billion and an IRR of 52%, and a Post-Tax NPV (5%) of $726 million and an IRR of 39%;
• Using a +/- 20% sensitivity analysis for silver price, Post-Tax NPV (5%) of $1,054 million and 50% IRR at US$27/oz silver and a Post-Tax NPV (5%) of $398 million and 26% IRR at US$18/oz silver;
• 14-year mine life producing approximately 171 million ounces total payable silver metal;
• Initial capital costs of $308 million, which includes $52 million in contingency costs;
• Life-of-mine sustaining capital costs total $20 million;
• Average LOM operating cash cost of US$8.45/oz and total all-in sustaining cost of US$10.42/oz silver;
• Annual payable metal production exceeds 15 million ounces of silver in years one through four, with LOM average annual payable metal production exceeding 12 million ounces of silver.

“This study demonstrates that the Silver Sand Project can be developed into one of the world’s largest silver mines with long life and robust economics. Its development will bring economic benefit to all stakeholders, including communities in Bolivia and shareholders of New Pacific” commented Dr. Rui Feng, CEO and Founder. “We are very pleased with the results of this PEA.  Given the robust economic parameters of the Project, there is room to accommodate inflation pressure in capital or operating costs.”

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 PEA is based on the updated Mineral Resource estimate which was reported on November 28, 2022.

Economic Results and Sensitivities

Tables 1 shows the assumptions, summarizes the projected production and the economic results of the PEA and Table 2 shows sensitivities to metal price and operating and capital cost.

Table 1: Silver Sand Open Pit Mining – Key Economic Assumptions and Results

Table 2: Silver Sand Project NPV (US$M) / IRR (%) Economic Sensitivity Analysis – Post Tax

Capital and Operating Costs

The Silver Sand Project has been envisioned as an open-pit mining operation with mining anticipated to be completed by a contract mining company.

Power to site will be provided via the national grid over the life of the mine. An on-site camp is envisioned to house the mine and mill personnel.

Table 3 shows a breakdown of the capital costs and Table 4 shows the main components of the operating costs.

Table 3: Total Capital Cost Estimate

Table 4: Total Operating Cost Estimate

Mining

The Silver Sand Project comprises four open pit mining areas — the Main pit, two small northern satellite pits (NP1 & NP2), and one eastern satellite pit (EP1). Open pit mining entails conventional drilling and blasting, with loading by excavator and ore haulage by trucks to a crusher or to the run-of-mine (ROM) pad. Waste is hauled to external and in-pit waste rock dumps. Open-pit mining is anticipated to commence in Year -1, with 18.5 million tonnes of pre-production mining. Peak open-pit production will be 18.9 Mt of total material in Year 1. A total of 55.4 Mt of mineralized rock is anticipated to be produced from open pit operations over the 14-year mine life.

Processing & Metallurgy

A metallurgical program was completed at SGS Lima during 2020 to build on earlier testwork and to support the PEA. Several process flowsheet options were evaluated for the PEA, including heap leaching, froth flotation and cyanidation. The selected PEA flowsheet consists of comminution by crushing followed by semi-autogenous and ball milling, leaching with cyanide over a period of 48 hours, counter current decantation and zinc precipitation (Merrill Crowe).  Zinc precipitates from Merrill Crowe will be treated for copper removal, and then smelted to produce a silver doré product.

Tailings will be thickened and then filtered with pressure filters before being conveyed to the nearby dry stack tailings facility.

The processing plant will operate year-round at a rate of approximately 4 million tonnes per annum and will achieve full throughput by Year 1. The average LOM feed grade is projected to be 107 g/t Ag.

Process water will primarily be sourced from a surface water dam adjacent to the process plant, supplemented by runoff from the waste rock and tailings storage facility.

Opportunities to Enhance Value

This PEA study confirms New Pacific’s commitment to enhancing value at the Silver Sand Project through engineering studies and resource definition. It has highlighted several key areas that can provide significant key opportunities to further enhance the value of the Silver Sand Project. These opportunities include:

• Infill drilling to upgrade areas of high-grade mineralization within the current inferred resource area;
• Additional drilling around the current Mineral Resources, where the deposit remains open at depth;
• Detailed drilling of other known mineralized prospects beyond the areas with known Mineral Resources so as include these in future estimations;
• Further metallurgical studies to improve grinding, leaching and CCD parameters under variable operating conditions;
• Completing a dilution study in the next stage of study to ascertain the anticipated mining dilution and ore recovery in combination with the most appropriate mining fleet and associated costs;
• Further work to identify alternative dump locations with short hauls i.e., backfill in-pit dumps, and dump in a nearby gully. Further work should be undertaken to develop a detailed waste and tailings disposal plan.

Mineral Resource estimate

The Mineral Resource estimate which used conceptual open pit mining constraints for reporting purposes has been reported in the news release of November 28, 2022. The Mineral Resources which are stated at a 30 g/t silver cut-off grade are shown in Table 5.

Table 5: Silver Sand Deposit Mineral Resource as of 31 October 2022

QUALIFIED PERSONS

The Qualified Persons for the PEA 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 QPs have reviewed the technical content of this news release for the Silver Sand deposit and have approved its dissemination.

Further details supporting the PEA will be available in an NI 43-101 Technical Report which will be posted under the Company’s profile at www.sedar.com within 45 days of this news release.

This news release has been reviewed and approved by Alex Zhang, P.Geo., Vice President of Exploration of New Pacific Metals Corp. who is the designated QP for the Company.

ABOUT NEW PACIFIC METALS

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, according to its 2022 Mineral Resource Estimate, 94% of the metal is contained in Measured + Indicated consisting of 201.8 M oz silver at 116 g/t Ag, with 13.0 M oz silver at 88 g/t Ag contained in the Inferred category. At the recently discovered Carangas Silver-Gold Project, a resource drilling program of more than 50,000 meters was completed in year 2022. The third project, the Silverstrike Silver-Gold Project, had a 6,000 meters discovery drill program in June 2022, and a near-surface broad gold zone was discovered in its first drill hole.