New Pacific Metals Reports Results of its Pre-Feasibility Study of the Silver Sand Project Post-Tax US$740 NPV (5%), 37% IRR, 157 Million Ounces of Silver
Highlights from the PFS are as follows (all figures in US Dollars):
- Post-tax net present value ("NPV") (5%) of
$740 million and internal rate of return ("IRR") of 37% at a base case price of$24.00 /oz silver,- Post-Tax NPV (5%) of
$638 million and IRR of 33% at the PEA1 comparative price of$22.50 /oz silver,
- Post-Tax NPV (5%) of
- 13-year mine life, excluding the 2-year pre-production period, producing approximately 157 million oz ("Moz") of silver,
- Annual silver production exceeds 15 Moz in years one through three, with life of mine ("LOM") average annual silver production exceeding 12 Moz,
- Annual silver production exceeds 15 Moz in years one through three, with life of mine ("LOM") average annual silver production exceeding 12 Moz,
- Initial capital costs of
$358 million and a post-tax payback of 1.9 years (from the start of production) at$24.00 /oz silver, and - Average LOM all-in sustaining cost ("AISC") of
$10.69 /oz silver.
"We are excited to share the results of the PFS for
______________________________________ |
Economic Results and Sensitivities
Table 1 shows key assumptions and summarizes the projected production and economic results of the PFS. Tables 2 and 3 show sensitivities to silver prices and operating and capital costs.
Table 1: Silver Sand Project Open Pit Mining – Key Economic Assumptions and Results
Item |
Unit |
Value |
Total Ore Mined |
Kt |
52,014 |
Open Pit Strip Ratio1 |
t:t |
3.3:1 |
Annual Processing Rate |
Ktpa |
4,000 |
Average |
g/t |
105 |
Silver Recovery2 |
% |
90 % |
|
$/oz |
24.00 |
Payable Silver Metal |
Moz |
157 |
Gross Revenue |
$M |
3,770 |
Total All-In Sustaining Cost3 |
$/oz |
10.69 |
Initial Capital Costs |
$M |
358 |
|
Yrs |
13 |
Payback Period (post-tax)5 |
Yrs |
1.9 |
Cumulative |
$M |
1,733 |
Cumulative |
$M |
1,162 |
Post-tax NPV (5%) |
$M |
740 |
Post-tax IRR |
% |
37 % |
NPV (5%) to Initial Capex Ratio |
$:$ |
2.1:1 |
1. LOM average strip ratio. Does not consider material mined during the pre-production period. |
2. LOM average. |
3. Includes operating costs, selling costs, royalties, sustaining capital costs, and closure costs. Calculated on a pre-tax basis. |
4. Excludes pre-production period. |
5. The payback period is measured from the beginning of production after construction is completed. |
Table 2 : Silver Sand Project Economic Sensitivity Analysis for Silver Prices – Post-Tax
|
Silver Price Sensitivity |
||||
|
|
|
|
|
|
Results (post-tax NPV $M / IRR) |
329 / 22 % |
535 / 30% |
740 / 37 % |
936 / 43% |
1,124 / 48 % |
Note: Inputs for the base case (100%) are listed in Table 1. This table presents how the project's post-tax NPV and IRR are affected by varying the selling price of silver. For example, if the silver price increases by |
Table 3: Silver Sand Project Economic Sensitivity Analysis for Costs – Post-Tax
|
Cost Sensitivity |
||||
Sensitivity Items |
-20 % |
-10 % |
100% |
+10 % |
+20 % |
Mine Operating Cost (post-tax NPV $M / IRR) |
784 / 38% |
762 / 37% |
740 / 37% |
719 / 36% |
697 / 36% |
Process Operating Cost (post-tax NPV $M / IRR) |
803 / 39% |
773 / 38% |
740 / 37% |
708 / 36% |
676 / 35% |
Life-of-Mine CAPEX (post-tax NPV $M / IRR) |
797 / 46% |
770 / 41% |
740 / 37% |
711 / 33% |
682 / 30% |
Note: Inputs for the base case (100%) are listed in Table 1.Table 3 lists sensitivity analysis for three "Input" variables. For example, if LOM CAPEX increases by 20% (+20%), while silver price, mine operating cost, and process operating cost remain the same as the "Base Case" input, the NPV becomes |
Capital and Operating Costs
The Project, as outlined in the PFS, is an open-pit mining operation with mining anticipated to be completed by a contract mining company. The open-pit mine is anticipated to provide ore to a mineral processing plant, producing silver doré on site.
- The mine is expected to be operated by a contractor with current operations in
Bolivia . This will eliminate procurement of a mining fleet by the Company and sustaining capital for fleet replacement, - The mine is expected to be connected to the national electricity grid to provide low-cost power to the processing plant and other on-site infrastructure, and
- The site can be accessed via government highways and high-quality local roads. The access road is currently being upgraded and widened by the government.
Costs used in the PFS were estimated based on quotes from multiple contractors, and vendors, as well as internal cost databases from the Company's consultants and indications from local firms.
A summary of capital costs is shown in Table 4. The majority of initial capital costs are related to constructing the mineral processing plant, followed by mine pre-production and development costs, and site infrastructure. Mine pre-production and development costs are primarily composed of waste mining and construction of the tailings storage facility ("TSF") embankment. In comparison to the PEA published on
- Reallocating 10Mt of waste material, that was mined in the production phase of the PEA, to the pre-production phase, as further engineering revealed the need for additional material for the TSF embankment (approximately
$30 million ), and - A larger silver leach circuit to extend the leach time, based on the results of the PFS metallurgical test work and further engineering (approximately
$20 million ).
Table 4: Total Capital Cost Estimate
Item1 |
Cost ($M) |
Mine pre-production and development costs |
76 |
Processing plant |
207 |
TSF2 and site infrastructure |
54 |
Owner's cost |
21 |
Initial capital |
358 |
Life of mine sustaining capital3 |
85 |
1. |
Includes direct, indirect, and contingency costs. |
2. |
Tailings capital includes initial earthworks, liners/membranes, and a water management facility. The cost of transporting and placement of material to build the tailings embankment is included in mine pre-production and development costs. Ongoing tailings embankment costs are included in mine operating costs and sustaining capital. |
3. |
Sustaining capital costs include expansion of the TSF, refurbishment and replacement of processing equipment, and mine closure. |
A summary of operating costs is presented in Table 5.
Table 5: Total Operating Cost Estimate
Item1 |
Cost ($/t milled) |
Mining cost2 |
9.28 |
Processing & tailings cost |
13.71 |
General and Administration cost |
1.65 |
Total operating cost |
24.63 |
1. |
Totals may not add up exactly due to rounding. |
2. |
Mining costs includes a credit for 3.8 Mt of ore mined during the pre-production phase and is based on a mining cost |
Mining
It is anticipated that the deposit will be mined using a conventional open pit approach. This entails drilling and blasting, with loading by hydraulic excavators and haulage by off-highway rear dump haul trucks. Ore is expected to be hauled to a crusher or to run-of-mine (ROM) stockpiles. Waste is anticipated to be hauled to external and in-pit waste rock dumps. Open-pit mining is anticipated to commence in Year 2, with 28.0 million tonnes of pre-production mining occurring over a two-year pre-production period. Peak open-pit production is expected to be 18.0 Mt of total material mined in Year 8. A total of 52.0 Mt of ore is anticipated to be mined from open pit operations over the life of mine.
Processing & Metallurgy
Three additional metallurgical programs, building on earlier test work, were completed during 2022 and 2023 and focused on cyanidation and tank leaching. They included bottle roll tests, column leach tests and gravity concentration, in addition to further grindability and sample characterization. The selected PFS flowsheet consists of comminution by crushing, followed by semi-autogenous and ball milling, tank leaching with cyanidation over 72 hours, counter current decantation ("CCD") and zinc precipitation (
Thickened tailings from the CCD circuit are anticipated to be filtered with pressure filters before being conveyed to the nearby TSF. Upon mine closure, it is anticipated that the TSF will be capped with rock and reclaimed topsoil to provide a secure facility.
Process water is expected to be sourced from the water reservoir adjacent to the process plant and from recycled water from the TSF, supplemented by site runoff as required. A site-wide water balance model has been developed to maximize water recycling over the life of mine.
Mineral Resource Estimate
The MRE, which used conceptual open pit mining constraints for reporting purposes, was previously reported in a news release dated
Table 6: Mineral Resource as of
|
Tonnes (Mt) |
Ag (g/t) |
Ag (Moz) |
Measured |
14.9 |
131 |
62.6 |
Indicated |
39.4 |
110 |
139.2 |
Measured & Indicated |
54.3 |
116 |
201.8 |
Inferred |
4.6 |
88 |
13.0 |
Notes: |
|
Source: |
Mineral Reserve Estimate
The open pit Mineral Reserves are reported within an optimized pit design. The Mineral Reserves represent the economically mineable part of the Measured and Indicated Mineral Resource and are presented in Table 7 below.
Table 7:
Mineral Reserve estimate as of
|
Tonnes (Mt) |
Ag (g/t) |
|
Proven |
15.1 |
121 |
58.8 |
Probable |
36.9 |
98 |
116.6 |
Proven & Probable |
52.0 |
105 |
175.4 |
Notes: |
|
Source: |
Permitting
The Company continues to progress with community engagement efforts with those individuals located within the Project's area of influence. To finalize the Environmental Impact Assessment Study ("EEIA") for submission to Bolivia's
Progress towards these agreements has been disrupted by a minority group of artisanal and small-scale miners ("ASMs") operating illegally within our mineral rights whose activities do not align with the development objectives of the Project. Through its extensive community engagement efforts, the Company believes that the interests of this minority group of ASMs do not align with those of the broader communities. These communities have formally acknowledged the Company's mining rights and they have indicated that they expect the cessation of these ASM activities.
The Company has taken steps to address the presence of these ASMs, including the commencement of formal legal proceedings in
The Company remains optimistic about achieving a favorable resolution, bolstered by community and governmental support to uphold our mining rights and drive positive development outcomes for the Project, benefiting local communities, the
Mining Production Contract
The Company continues to engage with the Bolivia state mining corporation, Corporación
The Company is committed to ensuring that the proposed Project delivers shared benefits, including access to milling capacity, technology, infrastructure, capital, and underutilized mining areas. Establishing a framework for coexistence with CoOps in non-encroaching areas of
Qualified Persons
The qualified persons for the PFS are Mr.
Further details supporting the PFS will be available in an NI 43‐101 Technical Report which will be posted under the Company's profile at sedarplus.com within 45 days of this news release.
This news release has been reviewed and approved by
Conference Call and Webcast Details
The Company will host a conference call and presentation webcast at
Date: Wednesday, June 26th, 2024,
Toll-free:
International 1-647-484-8814
Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=gYWmvNR5
About
New Pacific is a Canadian exploration and development company with three precious metal projects in
On behalf of
Director and CEO
For Further Information
New Pacific Metals Corp.
Phone: (604) 633‐1368 Ext. 223
E-mail: invest@newpacificmetals.com
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CAUTIONARY NOTE REGARDING RESULTS OF PRELIMINARY ECONOMIC ASSESSMENT
The results of the PEA prepared in accordance with NI 43-101 titled "Technical Report – Silver Sand Deposit Preliminary Economic Assessment" dated
Certain of the statements and information in this news release constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian provincial securities laws. Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, or future events or performance (often, but not always, using words or phrases such as "expects", "is expected", "anticipates", "believes", "plans", "projects", "estimates", "assumes", "intends", "strategies", "targets", "goals", "forecasts", "objectives", "budgets", "schedules", "potential" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information. Such statements include, but are not limited to statements regarding: the results of the PEA; the results of the PFS, including, but not limited to, the anticipated post-tax NPV and IRR at the Project, the anticipated annual payable metal production at the Project, the anticipated capital costs at the Project, the anticipated pre-tax all-in sustaining cost at the Project and the anticipated capital and operating costs at the Project; expectations regarding the Project, including, but not limited to, the anticipation that the Project will be an open-pit mining operation, the anticipation that mining at the Project will be completed by a contract mining company, the anticipation that there will be a mineral processing plant producing silver doré on site at the Project, the anticipation that the mine at the Project will be connected to the national electricity grid, the anticipation that ore will be hauled to a crusher or to ROM stockpiles, the anticipation that waste will be hauled to external and in-pit waste rock dumps, the anticipation that 28.0 million tonnes of pre-production mining will occur over a two-year pre-production period, the anticipation that mining will commence in Year 2, the anticipation that peak open-pit production will be 18.0 Mt of total material mined in Year 8, the anticipation that 52.0 Mt of ore will be mined from open pit operations over the life of mine, the anticipation that thickened tailings from the CCD circuit will be filtered with pressure filters before being conveyed to the nearby waste storage (waste rock and tailings) facility, the anticipation that a waste storage facility will be built up using mine waste, the anticipation that, upon mine closure, the tailings disposal area will be capped with mine rock, the anticipation that process water will be primarily sourced from dammed water reservoir adjacent to the process plant and recycled water from the dry stack tailings supplemented by runoff from the waste storage facility, plant site and open pits, the expectation of broader communities that ASM activities will cease, the anticipation that the Company will achieve a favorable resolution with respect to ASM activities, the anticipation of positive development outcomes for the Project, benefiting local communities, the
Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks relating to: global economic and social impact of public health crises (such as a resurgence of the COVID-19 novel coronavirus); fluctuating equity prices, bond prices, commodity prices; calculation of resources, reserves and mineralization, general economic conditions, foreign exchange risks, interest rate risk, foreign investment risk; loss of key personnel; conflicts of interest; dependence on management, uncertainties relating to the availability and costs of financing needed in the future, environmental risks, operations and political conditions, the regulatory environment in
The forward-looking statements are necessarily based on a number of estimates, assumptions, beliefs, expectations and opinions of management as of the date of this news release that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. These estimates, assumptions, beliefs, expectations and options include, but are not limited to, those related to the Company's ability to carry on current and future operations, including: :global economic and social impact of public health crises on our operations and workforce; development and exploration activities; the timing, extent, duration and economic viability of such operations; the accuracy and reliability of estimates, projections, forecasts, studies and assessments; the Company's ability to meet or achieve estimates, projections and forecasts; the stabilization of the political climate in
Although the forward-looking statements contained in this news release are based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. All forward-looking statements in this news release are qualified by these cautionary statements. Accordingly, readers should not place undue reliance on such statements. Other than specifically required by applicable laws, the Company is under no obligation and expressly disclaims any such obligation to update or alter the forward-looking statements whether as a result of new information, future events or otherwise except as may be required by law. These forward-looking statements are made as of the date of this news release.
This news release has been prepared in accordance with the requirements of the securities laws in effect in
Additional information relating to the Company, including the AIF, can be obtained under the Company's profile on SEDAR+ at www.sedarplus.ca, on EDGAR at www.sec.gov, and on the Company's website at www.newpacificmetals.com.
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