New Pacific Metals (TSX: NUAG; NYSE: NEWP) is raising $35 million which will be spent primarily to advance its flagship Silver Sand silver project and the Carangas project, both of which are in Bolivia. Provision will also be made for working capital and general corporate purposes.
The bought deal is underwritten by a syndicate, which has agreed to purchase approximately 13.2 million common shares of New Pacific at a price of $2.65 per share. The underwriters have been granted an over-allotment if nearly 2 million additional common shares. The option is exercisable for a period of 30 days following closing. Closing is expected on or about Sept. 29, 2023.
New Pacific said in announcing the financing that Pan American Silver and Silvercorp Metals have indicated interest in participating in the offering, investing $13.5 million and $6.7 million, respectively.
The Silver Sand silver project in the Potosi region is 100%-owned by New Pacific. The company has completed a preliminary economic assessment for the project, giving it a base case post-tax net present value at a 5% discount of US$726 million and a post-tax internal rate of return of 39% at a silver price of US$22.50 per oz. The proposed mine has a life of 14 years during which time 171 million oz. of silver will be produced. The all-in sustaining cost of producing an ounce of silver is estimated to be US$10.42.
Measured and indicated resources were estimated in 2022 to be 54.3 million tonnes grading 116 g/t silver, containing 201.8 million oz. The inferred resource is 4.6 million tonnes at 116 g/t silver, containing 13 million oz. of silver.
New Pacific is earning a 98% interest in the Carangas silver-gold-base metal discovery from a private Bolivian corporation. In September 2023, the company made an initial resource estimate for the three zones of interest – Upper Silver, Middle Zinc, and Lower Gold zones. Total indicated resources of 214.9 million tonnes containing 205.3 million oz. of silver, 1.6 million oz. of gold, 1.4 million lb. of lead, 2.7 million lb. of zinc, and 112.6 million lb. of copper. Collectively the contained silver equivalent is 559.8 million oz. The inferred category total 45 million tonnes containing 109.8 million oz. of silver equivalent.
More information is posted on www.NewPacificMetals.com.