Demand in the global silver market is soaring due to the both the Artificial Intelligence and Green Energy revolutions. As silver supply struggles to keep pace, companies like New Pacific Metals (TSX:NUAG, NYSE American:NEWP) are strategically positioned to benefit.

In an interview with The Oregon Group, CEO Andrew Williams discusses the company’s promising silver projects in Bolivia and their potential to meet the increasing demand for this critical mineral.

New Pacific Metals boasts two major silver projects in Bolivia: Silver Sand and Carangas, with a combined mineral resource exceeding 400 million ounces of silver. The Silver Sand project’s Pre-Feasibility Study reveals impressive economics, including a post-tax NPV of $740 million at $24 silver and an IRR of 37%2. 

Meanwhile, the Carangas project, though at an earlier stage, shows potential to surpass Silver Sand in scale.

While operating in Bolivia presents certain challenges, particularly in permitting, New Pacific Metals has adopted a strategic approach focused on local expertise, open communication, and patience. The company is making progress on securing necessary permits for both projects, with a strong emphasis on sustainability and community engagement.

As the demand for silver continues to grow, particularly in industries like solar energy and electric vehicles, New Pacific Metals is well-positioned to play a significant role in meeting this demand. With robust economics even at lower silver prices, the company offers investors substantial leverage to potential upside in the silver market.

Q&A:

The Oregon Group: Andrew, thanks for joining us. Let’s talk about silver. Demand is soaring, driven by the green energy revolution and a global push toward electrification. Yet, silver supply looks like it’s struggling to keep up. What’s your perspective on the current market dynamics?

Andrew Williams, CEO, New Pacific Metals Corp: Silver is absolutely critical for a more sustainable future, from solar panels to electric vehicles and beyond.  But yes, the challenge is supply, with the 2023 annual deficit (most recently measured) at 184 million ounces—amounting to a sizable 15% of global demand—expected to persist into 2024, marking the fourth consecutive year of deficit. In 2023, industrial demand jumped by 11% to a record-breaking 20,353 tonnes and is showing no signs of slowing down. By 2030, the solar industry is expected to need 273 million ounces annually. This widening supply-demand gap presents a tremendous opportunity for companies like ours.

The Oregon Group: Right, and that brings us to New Pacific Metals (TSX:NUAG, NYSE American:NEWP). You’ve got two very promising silver projects in Bolivia: Silver Sand and Carangas. How do these assets position New Pacific to benefit from this silver market?

Andrew Williams: A significant silver deficit demands substantial new sources of silver production—much like you can’t pave a highway with a handful of gravel. Solving big problems requires bold, large-scale solutions. Combined, Silver Sand and Carangas have a mineral resource of over 400 million ounces of silver. This is not a speculative play; we have the scale and the grade to become a major force in silver production.

Our Silver Sand project is truly remarkable. Our latest Pre-Feasibility Study confirms a robust post-tax NPV of $740 million at $24 silver, with an IRR of 37%. We’re talking 15 million ounces of annual silver production in the first three years, and a sub-two-year payback on capital. Those are (very) good numbers.

And, while at an earlier stage, Carangas is advancing rapidly and has the potential to be even larger than Silver Sand. Our recent Preliminary Economic Assessment demonstrates a post-tax NPV of $501 million at $24 silver and an IRR of 26%. The mine plan boasts a 16-year life, with average annual production of 6.6 million ounces of silver and 8.5 million ounces per year in the first six years, along with significant zinc and lead by-products.

The beauty is that both projects are economically robust, even at lower silver prices. This gives us tremendous leverage to the upside as silver prices continue to climb.

The Oregon Group: Bolivia is a prolific mining jurisdiction, but it also carries a certain level of risk perception among investors. How do you address those concerns and what is your strategy for operating successfully in Bolivia?

Andrew Williams: We understand the concerns. However, we believe that Bolivia, with its long and rich mining history, represents an exceptional opportunity for companies willing to do their homework. Our approach is built on:

Local Expertise. Our team in Bolivia is composed of local professionals, with deep roots in the communities where we operate. This local knowledge and sensitivity are essential for building trust and navigating the permitting process.

Open Communication. We’re committed to open and transparent engagement with all stakeholders, from local communities to the national government. Building relationships is crucial for securing social license and long-term success in the country.

Patience and Persistence. We’ve learned that permitting can take time, it’s the same the all over world. So, you need to be patient and persistent, meticulously build consensus and addressing concerns correctly. We’re confident in our approach and our ability to deliver value to both our shareholders and the people of Bolivia.

The Oregon Group: Permitting is often the most significant hurdle for mining projects, particularly in jurisdictions like Bolivia. Let’s talk about the current status of permitting for both Silver Sand and Carangas. What are the key challenges you face and what are your expectations for moving forward?

Andrew Williams: You’re right; permitting is our primary focus right now. With Silver Sand, we already have our mining permit in hand. The critical piece is securing the environmental permit, and that hinges on finalizing a land lease agreement with the local communities, addressing their concerns and ensuring everyone benefits from the project. It’s a delicate process, but our team is making progress, and we’re optimistic about achieving a resolution in the near future. At Carangas, we need to obtain both the mining and environmental permits. We’re working diligently to meet all the regulatory requirements while maintaining strong relationships with local communities. It’s important to not cutting corners; we’re laying a solid foundation for long-term, sustainable operations in Bolivia.

The Oregon Group: Speaking of sustainability, how are you approaching the environmental and social aspects of your projects?

Andrew Williams: We are acutely aware of our responsibilities and are committed to responsible mining practices that benefit both the environment and the communities. For example, at Silver Sand, we plan for Dry Stack Tailings to significantly reduce water consumption and minimize the environmental footprint of our tailings storage facility; and, to build a water reservoir that will not only meet our operational needs but also provide water security for the local communities during the dry season.

The Oregon Group: Andrew, thank you for your time and candid responses. We’re eager to see how these projects unfold and believe New Pacific is uniquely positioned to deliver value in this exciting silver market.

Andrew Williams: We appreciate your time and the opportunity to share our story with your readers. We believe New Pacific is at an inflection point, and we’re excited about the future of silver mining in Bolivia

Find out more on the silver deficit and mining opportunities in Bolivia: