New Pacific Metals Corp. (TSX:NUAG) reports its unaudited condensed consolidated interim financial results for the three and six months ended December 31, 2020 and announces management team updates. This news release should be read in conjunction with the Company’s MD&A and the financial statements and notes thereto for the corresponding period, which have been posted under the Company’s profile on SEDAR at www.sedar.com and are also available on the Company’s website at www.newpacificmetals.com. All figures are expressed in Canadian dollars unless otherwise stated.
Working Capital: As at December 31, 2020, the Company had working capital of $62.79 million.
Net loss attributable to equity holders of the Company for the three months ended December 31, 2020 was $2.32 million or $0.02 per share (three months ended December 31, 2019 – net loss of $1.60 million or $0.01 per share). The Company’s financial results were mainly impacted by the following: (i) operating expenses of $1.63 million compared to $1.63 million in the prior year quarter; (ii) loss from investments of $0.14 million compared to income of $0.34 million in the prior year quarter; and (iii) foreign exchange loss of $0.56 million compared to loss of $0.32 million in the prior year quarter.
For the six months ended December 31, 2020, net loss attributable to equity holders of the Company was $3.83 million or $0.03 per share compared to net loss of $ 0.31 million or $0.00 per share for the six months ended December 31, 2019.
Operating expenses for the three and six months ended December 31, 2020 were $1.63 million and $3.65 million, respectively (three and six months ended December 31, 2019 – $1.63 million and $ 2.63 million, respectively).
Income (loss) from investments for the three and six months ended December 31, 2020 was $(0.14) million and $0.70 million, respectively (three and six months ended December 31, 2019 – $0.34 million and $2.46 million, respectively).
Foreign exchange loss for the three months ended December 31, 2020 was $0.56 million (three months ended December 31, 2019 – loss of $0.32 million). The Company holds a large portion of cash and short-term investments in US dollars to support its operations in Bolivia. Revaluation of these US-dollar-denominated financial assets to their Canadian dollar functional currency equivalents will result in unrealized foreign exchange gain or loss for the relevant reporting periods. During the three months ended December 31, 2020, the US dollar depreciated by 4.6% against the Canadian dollar (from 1.3339 to 1.2732) while in the prior year quarter the US dollar depreciated by 1.9% against the Canadian dollar (from 1.3243 to 1.2988).
For the six months ended December 31, 2020, foreign exchange loss was $0.88 (six months ended December 31, 2019 – loss of $0.15 million).
WHITEHORSE GOLD SPIN-OUT TRANSACTION
During Fiscal 2020, the Company performed a strategic review on the Tagish Lake Gold Project located in the Yukon Territory, Canada and established Whitehorse Gold Corp. to acquire the TLG Project from the Company for a cash consideration of $3 million plus 20,000,000 Whitehorse Gold common shares.
On November 18, 2020, the Company distributed all of the spin-out shares held by it to the Company’s shareholders on a pro rata basis by way of a plan of arrangement under the Business Corporations Act (British Columbia). The spin-out shares were valued at $8.86 million upon distribution. Assets and liabilities of Whitehorse Gold and TLG Project, which were classified as held for distribution as at June 30, 2020 in the amount of $11.85 million and $0.12 million, respectively, were disposed upon completion of the spin-out. On November 25, 2020, Whitehorse Gold’s common shares became listed for trading on the TSX Venture Exchange under the symbol “WHG”.
SILVER SAND PROJECT
Since acquiring the project in 2017, the Company has carried out extensive exploration and resource definition drill programs. From 2017 to 2019, the Company completed a total of 97,619 metres of drilling in 386 diamond core drillholes – one of the largest greenfield discovery drill programs in South America during this period.
On April 14, 2020, the Company released the inaugural National Instrument 43-101 – Standards of Disclosure for Mineral Projects Mineral Resource estimate for the Silver Sand Project. Using a 45 g/t silver cut-off-grade, the independent estimate by AMC Mining Consultants (Canada) Ltd. reported a Measured & Indicated Mineral Resource of 35.39 million tonnes at a grade of 137 g/t silver, containing 155.86 million ounces of silver and Inferred Mineral Resource of 9.84 million tonnes at a grade of 112 g/t silver containing 35.55 million ounces of silver. For further details, please refer to the Company’s news release dated April 14, 2020 and an amended and restated technical report entitled “Silver Sand Deposit Mineral Resource Report (Amended)” with an effective date January 16, 2020, filed under the Company’s profile on SEDAR at www.sedar.com and available on the Company’s website at www.newpacificmetals.com.
Advanced studies have commenced on the project, and following a competitive tendering process, the Company selected CSA Global Consultants Canada Ltd. (an ERM Group company), Knight Piésold Consultores S.A., and Wood plc to lead the Preliminary Economic Assessment, Environmental baseline and Social baseline studies, respectively.
For the three and six months ended December 31, 2020, total expenditures of $0.87 million and $1.78 million, respectively (three and six months ended December 31, 2019 – $3.70 million and $8.54 million, respectively) were capitalized under the Silver Sand Project.
In December 2019, the Company acquired a 98% interest in the Silverstrike Project from an arm’s length private Bolivian corporation by making a one-time cash payment of US$1.35 million. Under the agreement, the Company’s Bolivian subsidiary is required to cover 100% of the future expenditures including exploration, and contingent on results, development and subsequent mining production activities at the Silverstrike Project. The agreement has a term of 30 years and is renewable for another 15 years. It is subject to approval by Bolivia’s Jurisdictional Mining Administrative Authority (Autoridad Jurisdiccional Administrativa Minera or “AJAM”).
The Silverstrike Project covers an area of approximately 13 km2 and is located approximately 140 km southwest of La Paz, Bolivia. The Silverstrike Project shares many similarities with the Silver Sand Project pre-discovery drilling, namely: sandstone hosted structurally controlled silver-polymetallic mineralization, centered on a historic mining district – the Berenguela District; presence of felsic Tertiary intrusive rocks with corresponding multiple silver-rich occurrences, associated with sercitic alteration; and the area is largely underexplored with limited modern exploration applied. During 2020, the Company’s exploration team commenced reconnaissance and detailed mapping and sampling programs on the northern portion of the project. The results to date indicate good to excellent exploration potential for hosting narrow, high-grade, near-surface, broad-zones of silver mineralization. Please refer to the Company’s news release dated September 29, 2020 for details on the exploration program at northern areas of the project and to the news release dated November 19, 2020 for details on exploration activities and field work on the central and southern areas of the project.
For the three and six months ended December 31, 2020, total expenditures of $0.73 million and $1.28 million, respectively (three and six months ended December 31, 2019 – $nil and $nil, respectively) were capitalized under the Silverstrike Project.
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 Company is pleased to announce the appointment of Svetoslava (Stacey) Pavlova to the role of Vice President, Investor Relations and Corporate Communications effective February 4, 2021. Ms. Pavlova brings over ten years of experience in mining, investor relations and finance. Prior to joining New Pacific, Ms. Pavlova worked at SSR Mining Inc., a large precious metals producer with operations in South America, Canada, the U.S. and Turkey, where she held roles in investor relations, metal sales and treasury. Ms. Pavlova is fluent in Spanish and holds the designation of Chartered Financial Analyst. She graduated from the University of Denver, where she completed a Master’s degree in Finance.
The Company also announces the resignation of Gordon Neal as President effective February 28, 2021. Mr. Neal will continue to advise the Company as a consultant.
“I am pleased to introduce and welcome Stacey to our management team. I look forward to working with her as she leads and executes our investor relations strategy,” said Mark Cruise, CEO of New Pacific. “I would also like to thank Gordon for his contribution to the Company. Gordon has been a key member of the Company and was a part of the discovery team of the Silver Sand Project. I wish him success in his new endeavours.”
ABOUT NEW PACIFIC METALS
New Pacific Metals is a Canadian exploration and development company, which owns the flagship Silver Sand Project, located in the Potosí Department of Bolivia, and the Silverstrike Project, located in the La Paz Department of Bolivia. The Company is focused on progressing the development of its flagship project, while growing Mineral Resources through the exploration and acquisition of properties in the Americas.
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