New Pacific Reports Financial Results

(New Pacific, 25.Aug.2022) — New Pacific Metals Corp. reports its financial results for the three months and year ended June 30, 2022.  All figures are expressed in US dollars unless otherwise stated.

FISCAL 2022 HIGHLIGHTS

  • Commenced the 2022 drill program at the Silver Sand Project which includes resource infill drilling to improve the confidence in the continuity of mineralization and step-out drilling to test the extension of the major mineralized zones up and down dip as well as on strike. To date, a total of 21,309 metres (“m”) in 94 drill holes have been completed, of which assay results for 35 drill holes have been received;
  • Completed the 2021 drill program of 13,313.7 m in 55 drill holes and received assay results for all drill holes at the Silver Sand Project;
  • Commenced the 2022 drill program at the Carangas Silver-Gold Project, a total of 21,980 m in 43 drill holes have been completed so far, of which assay results for 12 drill holes have been received. The assay results continue to show near surface silver horizons stacking over a broad bulk of gold mineralization below;
  • Completed the 2021 initial discovery drill program at the Carangas Silver-Gold Project for a total of 13,209 m in 35 drill holes and received assay results for all drill holes. All assay results intersected silver-rich polymetallic mineralization near surface, with some deep holes intersecting a wide zone of gold mineralization below;
  • Commenced a 6,000 m initial discovery drill program at the Silverstrike Project and a 2,000 m initial discovery drill program at the Jisas prospect, a satellite concession located in the north block of the Silver Sand Project;
  • Continue to advance the preliminary economic assessment (“PEA”) study for the Silver Sand Project, including a mineral resource estimate (“MRE”). The PEA is expected to be completed by the end of 2022; and
  •  Maintained working capital of $29.3mn, sufficient to advance the existing exploration projects and other regional exploration initiatives.

FINANCIAL RESULTS

Net loss attributable to equity holders of the company for the year ended June 30, 2022 was $6.42mn or $0.04 per share (year ended June 30, 2021 – net loss of $6.57mn or $0.04 per share).  The company’s financial results were mainly impacted by the following: (i) operating expenses of $6.78mn compared to $5.95mn in the prior year; (ii) income from investments of $0.22 million compared to $0.40mn in the prior year; and (iii) foreign exchange gain of $0.19mn compared to loss of $1.02mn in the prior year.

For the three months ended June 30, 2022, net loss attributable to equity holders of the company was $2.34mn or 0.01 per share (three months ended June 30, 2021 – net loss of $1.97mn or 0.01 per share).

Operating expenses for the three months and year ended June 30, 2022 were $2.29mn and $6.78mn, respectively (three months and year ended June 30, 2021 – $1.57mn and $5.95mn, respectively).

Income from investments for the three months and year ended June 30, 2022 was $0.01 million and $0.22mn, respectively (three months and year ended June 30, 2021 – loss of $0.21 million and income of $0.40mn, respectively).

Foreign exchange gain for the year ended June 30, 2022 was $0.19mn (year ended June 30, 2021 – loss of $1.02mn).  The company holds a portion of cash and short-term investments in USD to support its operations in Bolivia. Revaluation of these USD-denominated financial assets to their Canadian dollar (“CAD”) functional currency equivalents resulted in unrealized foreign exchange gain or loss for the relevant reporting periods. For the year ended June 30, 2022, the USD appreciated by 4.0% against the CAD (from 1.2394 to 1.2886) while in the prior year the USD depreciated by 9.1% against the CAD (from 1.3628 to 1.2394).

For the three months ended June 30, 2022, foreign exchange gain was $0.02mn (three months ended June 30, 2021 – loss of $0.20mn).

Working Capital: As of June 30, 2022, the company had working capital of $29.3mn.

PROJECT OVERVIEW

SILVER SAND PROJECT

In 2021, the company completed a drill program of 13,313.7 m in 55 holes.  The 2021 drill program comprised structure orientation drilling, step-out and infill drilling as well as exploration drilling.  Assay results of all drill holes have been received. Detailed structural logging and assay of the oriented drill cores confirmed previous understanding of the orientation of mineralized structures and resource model which are dominantly striking in the direction of north and northwest and dipping in direction of west at high angles which are also evidenced at surface outcrops and historical underground workings.  Step-out drilling was carried out mainly outside of the major mineralized trends with results indicating the existence of multiple smaller satellite mineralized zones between the major mineralized trends.  For details of the 2021 drill program, please refer to the company’s news release dated April 6, 2022.

In the first half of 2022, the company commenced a resource infill drilling and step-out drilling program.  The resource infill drilling aims to improve the confidence in the continuity of mineralization in the core area of the project and upgrade resource categories, while the step-out drilling is designed to test the extension of the mineralized zones up and down dip as well as on strike. The results of the infill and step-out drilling will be included in the MRE and will be incorporated into the PEA expected to be completed by the end of 2022. To datea total of 21,309 m in 94 drill holes have been completed, of which assay results for 35 drill holes have been received. For details of the 2022 drill program, please refer to the Company’s news releases dated May 31, 2022 and April 6, 2022.

For the three months and year ended June 30, 2022, total expenditures of $3.20mn and $7.64mn, respectively (three months and year ended June 30, 2021 – $1.13mn and $3.36mn, respectively) were capitalized under the project. 

CARANGAS PROJECT

In 2021, the company completed an initial discovery drill program of 13,209 m in 35 drill holes.  Assay results of all drill holes have been received. Results from the 2021 discovery drill program confirmed the broad silver-rich polymetallic mineralization near surface and intersected a wide zone of gold mineralization below it.  For details of the 2021 discovery drill program, please refer to the company’s news releases dated May 17, 2022, February 23, 2022, and February 10, 2022. 

Following the success of the 2021 discovery drill program, the company has commenced a 2022 resource definition drill program with a planned meterage of up to 40,000 m if ongoing drill results continue to be encouraging. To date, a total of 21,980 m in 43 drill holes have been completed, of which assay results of 12 drill holes have been received.  The assay results continue to show near surface silver horizons stacking over a broad bulk gold mineralization below. Currently, there are five drill rigs deployed at the project, of which the three larger drill rigs with a capacity of 1,000 m depth are focusing on both near surface silver and at depth gold zones, while the other two smaller drill rigs are focusing on near surface silver zone.  For details of the 2022 drill program, please refer to the Company’s news release dated July 13, 2022 and August 8, 2022.

For the three months and year ended June 30, 2022, total expenditures of $2.10mn and $5.22mn, respectively (three months and year ended June 30, 2021 – $nil and $0.25mn, respectively) were capitalized under the project.

SILVERSTRIKE PROJECT

On June 14, 2022, the company announced to commence a 6,000 m initial discovery drill program at the Silverstrike Project. The program will focus on testing a broad gold zone identified by the Company and by historical drilling.

For the three months and year ended June 30, 2022, total expenditures of $0.10mn and $0.14mn, respectively (three months and year ended June 30, 2021 – $0.02mn and $1.29mn, respectively) were capitalized under the project.

RZY PROJECT

The RZY Project, located in Qinghai, China was an early stage silver-lead-zinc exploration project.  The RZY Project was located approximately 237 km from the city of Yushu Tibetan Autonomous Prefecture.  In 2016, the Qinghai Government issued a moratorium which suspended exploration for 26 mining projects in the region, including the RZY Project, and classified the region as a National Nature Reserve Area.   

During Fiscal 2020, the company’s subsidiary, Qinghai Found Mining Co., Ltd., reached a compensation agreement with the Qinghai Government for the RZY Project.  Pursuant to the agreement, Qinghai Found will surrender its title to the RZY Project to the Qinghai Government for one-time cash compensation of $2.99mn (RMB ¥20mn) (the “RZY compensation transaction”). 

On June 25, 2022, the Qinghai Government completed its approval process of the RZY compensation transaction.  As a result, the Company disposed its RZY Project for cash consideration of $2.99mn (RMB ¥20mn), which is included in the receivables balance as of June 30, 2022.  For the year ended June 30, 2022, a loss of $0.09mn (year ended June 30, 2021 – $nil) was recognized upon disposal of the RZY Project.  Subsequent to June 30, 2022, the company received the cash compensation in full.MANAGEMENT DISCUSSION AND ANALYSIS

This news release should be read in conjunction with the company’s Management Discussion and Analysis (“MD&A”) and the audited consolidated financial statements and notes thereto for the corresponding period, which have been filed with the Canadian Securities Administrators and are available under the company’s profile on SEDAR at www.sedar.com and on the company’s website at www.newpacificmetals.com.

QUALIFIED PERSON

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 National Instrument 43-101 – Standards of Disclosure for Mineral Resources (“NI 43-101”). The Qualified Person has verified the information disclosed herein and is not aware of any significant risks and uncertainties that could be expected to affect the reliability or confidence in the information discussed herein.

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