New Pacific boosts Bolivia project value to $2.65B

New Pacific Metals (TSX: NUAG; NYSE-A: NEWP) has strengthened the economics of its Carangas silver-gold project in Bolivia with an updated preliminary economic assessment that lifts the after-tax net present value to $2.65 billion (C$3.71 billion) and outlines average annual silver-equivalent production of nearly 18 million oz. over a 19-year mine life.

The updated PEA issued Thursday incorporates a higher processing rate and the addition of a gold zone that was absent from the 2024 study. Using base-case prices of $45 per oz silver, $3,400 per oz gold, $1.20 per lb. zinc and $0.90 per lb lead, the study returned a 36% after-tax internal rate of return and a 2.4-year payback on initial capital of $644.5 million.

The mine plan calls for production of 195 million payable oz silver, 1.1 million oz gold, 1.45 billion lb zinc and 941 million lb lead, or 339 million silver-equivalent oz, over the operation’s life. Average all-in sustaining costs are projected at $19.16 per silver-equivalent ounce.

“The project has robust economics, manageable upfront capex, annual silver production of approximately 10 million oz. per year, and over 1 million oz of gold produced over the life of mine,” the company said. New Pacific added it will advance a 30,000-metre infill drill program while working to convert its exploration licences into administrative mining contracts and begin the environmental impact assessment process.

Project ‘improves’

BMO Capital Markets analyst Kevin O’Halloran said the updated study meaningfully improves Carangas by adding the lower gold zone and increasing plant throughput, lifting the firm’s net asset value estimate for the project by 13%.

He reiterated an outperform rating, calling Carangas “a key value driver” as New Pacific advances development. O’Halloran said investors will now focus on permitting and converting more inferred resources into indicated through the planned drill program.

Shares in New Pacific Metals gained 5.5% from Wednesday’s close to C$5.75 apiece by mid-Friday, valuing the company at C$1.06 billion. They’ve traded in a 52-week range of C$1.92 to C$8.58. 

Bolivia hurdles

The study reinforces Carangas as one of the larger undeveloped silver projects in the Americas, but its path to production depends on more than strong economics. Bolivia has struggled with fuel shortages, foreign exchange constraints, regulatory uncertainty and permitting delays that have complicated mining investment.

Industry consultant Juan Ignacio Guzmán said in a July research note the country must improve legal certainty, infrastructure and institutional credibility before it can unlock its broader mineral potential.

He argued that orderly permitting and transparent regulation, rather than accelerated approvals, will determine whether Bolivia can convert large mineral resources into operating mines.