New Pacific Metals Corp. is a near-term gold and silver production & resource expansion opportunity in Yukon, Canada. Silvercorp Metals Inc. (NYSE/TSX : SVM), the largest primary silver producer in China, is the major shareholder - Rui Feng CEO, Director owns +9%.
With a strong balance sheet ($31m), no debt, and experienced management, the company is well positioned to build shareholder value through discovery and resource development.
New Pacific acquired the Tagish Lake Gold Project in 2010 through the 100% acquisition of Tagish Lake Gold Corp., which is continuing as a wholly owned subsidiary of New Pacific. By road, the Tagish Lake Gold Project is located 80 kilometres south of Whitehorse, Yukon and consists of 982 mineral claims covering about 170 square kilometres. The property´s infrastructure includes an all-weather access road, extensive underground workings and roads to each project, a 300 tonne per day mill, a tailings reclamation site, service buildings and an all-weather 50-person camp.
Three geographically distinct projects have been identified within the Tagish Lake Gold Project:
•Goddell
•Skukum Creek
•Mt. Skukum
New Pacific Received Conditional Approval for Graduation to the TSX.
VANCOUVER, BRITISH COLUMBIA (February 28, 2012) –New Pacific Metals Corp. (TSX:NUX) (the "Company") is pleased to announce it has entered into an arm’s length non-binding Memorandum of Understanding (“MOU”) with Fujian Henyuan Mining Co., Ltd. (“Fujian Henyuan” ) to acquire a 75% interest in the LMC silver-gold-lead-zinc Property, Fujian Province, China (the “Property”).
The Property is located approximately 100 kilometres to the west of Fuzhou, the capital city of Fujian Province, China, and consists of an exploration permit for an area of 1.54 square kilometres and a 300 ton-per-day flotation mill plant. An area of 1.03 square kilometres has been approved for mining by the local government within the current exploration permit. The applicable mining license for the Property is expected in the near future.
Terms of the MOU
Pursuant to the terms of the MOU, the Company will pay, upon signing of a definitive agreement, a total of RMB210 million to acquire a 75% interest of the Property. The RMB210 million payment consists of an upfront cash payment by the Company of RMB80 million and the issuance of Company shares (the “Shares”) equivalent of RMB100 million to Fujian Henyuan. The issue price of the Shares will be based on the date the definitive agreement is executed between the parties, but will not exceed $1.20/Share. In addition, the first RMB30 million in profits from commercial operations at the Property will be paid to Fujian Henyuan.
For reference as of February 27, 2012 one RMB = 0.158 Canadian dollars.
Any definitive agreement between the parties (and any payment of cash or issuance of Shares) is subject to the Company completing a confirmation drill program to verify historical drill data and the geological model of the Property mineralization. Also, the definitive agreement is further subject to Fujian Henyuan completing a consolidation for 100% ownership of the Property and obtaining the applicable mining license.
The issuance of any Shares and the definitive agreement may be subject to TSX and other regulatory approvals.
To note, the owners of the Fujian Henyuan also operate several other silver polymetallic properties in Fujian Province which the Company is currently reviewing. The parties have orally agreed that the Company be granted a right to acquire any of these properties at the Company’s discretion.
Property information
The Property is situated at the southeast margin of the Wuyi mineralization belt, which is one of the 16 prominent metallogeny belts in China. Silver-gold-lead-zinc mineralization is hosted in a sequence of Permian marine clastic sediments and limestone which are overlain by a Jurassic terrestrial sedimentary sequence and underlain by Proterozoic metasedimentary rocks.
Numerous porphyritic rhyolite dykes intrude into these sequences. Based on historical Property exploration reports, economic mineralization of the Property is the oxidized silver-gold-lead-zinc mineralization associated with multiple prominent gossanous zones developed in the upper clastic sediments of the Permian sequence close to the unconformity surface with the overlying Jurassic sediments. The oxidized mineralization zones are near surface, sub-horizontal, and stratiform.
Exploration of the Property began in the 1980’s, and included geological mapping, trenching, diamond drilling, and aditing. 39 holes totalling 6,880 meters were drilled and 379 meters of underground adits were completed.
Disclosure of historical estimates
All resource estimates for the Property as set out in this news release are historical. A historical resource estimate was made in 2010 (Table
1) by a local Chinese exploration group, which shows a resource of 4.83 million tonnes of mineralized material with an average grade of 133g/t silver and 0.23g/t gold (Chinese category 332+333). No National Instrument 43-101 (NI 43-101) compliant technical report has ever been completed for the Property, (or any other technical report, for the matter, has been completed for the Property).
No party should rely on any of the historical estimates set out herein as the assumptions, parameters, and methods used to prepare the historical estimates herein are not known to the Company. The historical estimates do not use categories, and do not comply with sections 1.2 and
1.3 of NI 43-101, but rather use the Chinese Mineral Resources and Mineral Reserves Reporting Standard which are significantly different.
There are no more recent estimates or data available to the Company. A NI 43-101 technical report is needed to verify the historical estimates set out herein.
A Qualified Person has not done sufficient work to classify the historical estimates as current mineral resources or mineral reserves; and the Company is not treating the historical estimates as current mineral resources or mineral reserves.
Company geologists reviewed all available geological information and historical exploration data, and made two site visits to the Property in December 2011 and January 2012. During these visits, the geologists examined the historical drill cores and noticed that some intervals of silver-lead-zinc sulphide mineralization were included in the oxidized mineralized zones. To verify the assay data, the cores of sulphide intervals were quartered using a diamond saw. The assay results of verification samples were deemed consistent with historical grades. No verification samples were taken from the oxidized portions as the oxidized cores were mixed and no individual sample intervals could be identified. However, Company geologists took chip samples at the outcrops and artisanal open cuts of the oxidized zones and silver mineralization was confirmed in the gossanous zones.
The Company infers that the primary sulphide mineralization may represent multiple subvertical silver-lead-zinc sulphide veins. This interpretation is supported by observations of silver-lead-zinc sulphide veins exposed by underground drift workings adjacent to the Property. To better evaluate the economic potential of the Property, the Company will initiate a confirmation drill program in February and March 2012 to verify the historical drill results of the oxidized zones and the geometry of the primary silver-lead-zinc sulphide veins.
Quality Control
Company geologists, during their visits to the Property carried out the verification sampling on site. Samples were quartered from the remaining half cores using a diamond saw, sealed and shipped directly to the ALS lab at Guangzhou City, China (ALS). At ALS, samples were dried, crushed and pulverized to -200 mesh. Analysis for gold is standard fire assay plus AAS finish with overlimits going to gravimetric method. Silver, copper, lead, and zinc are assayed using four acid digestion by conventional ICP-AES analysis.
Alex Zhang, P.Geo., VP Exploration of the Company, is the Qualified Person under NI 43-101, has reviewed and given consent to the technical information in this press release.
