New Pacific Metals Corp. (TSX:NUAG) reports its unaudited condensed consolidated interim financial results for the three months ended September 30, 2020. 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.

QUARTERLY HIGHLIGHTS

• Working capital of $68.88 million to advance the Silver Sand Project and regional exploration initiatives including the Silverstrike Project;
• Continued to expand the Snake Hole Zone on the Silver Sand Project – intersecting 30.9 m @ 159 g/t Ag including 12.2 m @ 354 g/t Ag (see news release dated August 6, 2020 for details);
• Commenced field work on the Silverstrike Project – results indicating good to excellent potential for both high-grade and near-surface bulk tonnage silver-rich polymetallic mineralization at Silverstrike North (see news release dated September 29, 2020 for details);
• Silver Sand Preliminary Economic Assessment, Environmental and Social studies commenced during the quarter;
• Continued focus on Sustainability – expanded the Bolivian CSR team with key hires;
• Received 99.77% shareholders’ support to continue creating shareholder value by spinning out the Tagish Lake Gold project into Whitehorse Gold Corp.; and  
• Graduated from the TSX Venture Exchange to the Toronto Stock Exchange and added to the VanEck Vectors Junior Gold Miners ETF (“GDXJ”).

FINANCIAL RESULTS

Working Capital: As at September 30, 2020, the Company had working capital of $68.88 million.

Net loss attributable to equity holders of the Company for the three months ended September 30, 2020 was $1.51 million or $0.01 per share (three months ended September 30, 2019 – net income of $1.29 million or $0.01 per share).  

The Company’s financial results were mainly impacted by: (i) income from investments of $0.84 million compared to income of $2.12 million in the prior year quarter; (ii) operating expenses of $2.03 million compared to $1.01 in the prior year quarter; and (iii) foreign exchange loss of $0.32 million compared to gain of $0.18 million in the prior year quarter.

Income from investments for the three months ended September 30, 2020 was $0.84 million (three months ended September 30, 2019 – $2.12 million) and comprised of a $0.76 million gain on the Company’s equity investments, a $0.04 million loss from fair value change offset by interest earned on bonds, $0.07 million in dividends received from the preferred share portfolio, and $0.05 million in interest earned from GICs and other cash accounts. As at the date of this news release, the Company’s material investments are preferred shares issued by the largest five Canadian banks with weighted average dividends yield of 5.68% and Canadian GICs earning weighted average interest of 1.02%.

Operating expenses for the three months ended September 30, 2020 were $2.03 million (three months ended September 30, 2019 – $1.01 million).  

Foreign exchange loss for the three months ended September 30, 2020 was $0.32 million (three months ended September 30, 2019 – gain of $0.18 million).  

The Company holds a large portion of cash and cash equivalents and bonds in US dollars while the Company’s functional currency is the Canadian dollar. The fluctuation in exchange rates between the US dollar and the Canadian dollar will impact the financial results of the Company. During the three months ended September 30, 2020, the US dollar depreciated by 2.1% against the Canadian dollar (from 1.3628 to 1.3339) while in the prior year quarter the US dollar appreciated by 1.2% against the Canadian dollar (from 1.3087 to 1.3243).

SILVER SAND PROJECT

The Company has carried out extensive exploration and resource definition drill programs on its Silver Sand Project since acquiring the project in 2017. From 2017 to 2019, the Company completed a total of 97,619 m of drilling in 386 holes – one of the largest green fields 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 estimate reported Measured & Indicated resource tonnes of 35.39 Mt at 137 g/t Ag for 155.86 Moz and Inferred resource tonnes of 9.84 Mt at 112 g/t Ag for 35.55 Moz. See news release dated April 14, 2020 and an amended and restated the technical report entitled “Silver Sand Deposit Mineral Resource Report (Amended)” with an effective date of January 16, 2020 filed under the Company’s profile on SEDAR for details.

The Company commenced its 2020 drill campaign during the first quarter of 2020. A total of 1,589.75 m of drilling was completed before field-based operations in Bolivia were suspended due to the COVID-19 pandemic. 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 (an Amec Foster Wheeler company) to lead the Preliminary Economic Assessment, Environmental baseline study, and Social baseline studies, respectively. The initial desktop portion of the studies are currently in progress.

For the three months ended September 30, 2020, total expenditures of $0.91 million (three months ended September 30, 2019 – $4.84 million) were capitalized under the Silver Sand Project.

SILVERSTRIKE 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, development and mining production activities at the Silverstrike Project.  The agreement has a term of 30 years and renewable for another 15 years. It is subject to an approval by Bolivia’s Jurisdictional Mining Administrative Authority (Autoridad Jurisdiccional Administrativa Minera or “AJAM”) .

The Silverstrike Project consists 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 intrusives with corresponding multiple silver rich occurrences associated with extensive sercitic alteration and underexplored with limited modern exploration. During the three months ended September 30, 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 and near-surface broad-zones of silver mineralization. See news release dated September 29, 2020 for details.

For the three months ended September 30, 2020, total expenditures of $0.55 million (three months ended September 30, 2019 – $nil) were capitalized under the Silverstrike Project.

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.

ABOUT NEW PACIFIC

New Pacific is a Canadian exploration and development company which owns the Silver Sand Project, in the Potosí Department of Bolivia, and the Tagish Lake Gold Project in Yukon, Canada.