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New Pacific Metals

Roth Capital lifts price target on New Pacific Metals after recent drill results reveal higher silver grades

The research firm set a price target of C$4.25 after the junior explorer released drill results that "continue to impress"

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Roth also reiterated a Buy rating on New Pacific's stock

New Pacific Metals Corp (CVE:NUAG) (OTCMKTS:NUPMF) recently released drill results that “continue to impress,” research firm Roth Capital Partners said in a note Thursday.

Results from a recent drill program at the company’s Silver Sand project in Bolivia revealed greater thickness and higher silver grades than previously determined, leading Roth to raise its price target for New Pacific to C$4.25 and maintaining a Buy rating on the stock.

Shares of New Pacific jumped nearly 15% yesterday on the news before settling at C$2.80 in Thursday morning trading.

READ: New Pacific Metals continues to find wide intervals of silver at flagship Bolivia asset

The junior explorer released drill results earlier this week from 20 holes that included standout results of 165.5 metres at 204 grams per ton (g/t) silver in one hole, which also included 93.5 metres at 336 g/t of the precious metal.

Another hole intercepted 75.8 metres at 128 g/t silver, while another had 68.68 metres at 153 g/t silver. On average, silver grades came in at a grade of 94.3 g/t, Roth noted.

In the research note, analyst Joe Reagor said Roth is more focused on the average grade rather than standout holes. New Pacific’s initial resource estimate on the property remains the key catalyst for 2019, he added.

“We continue to believe NUAG will release an initial resource estimate for the Silver Sand project by the end of 2019,” Reagor said.

To date, the company has drilled over 250 holes and demonstrated an average thickness of 65 metres and an average grade of 92 g/t silver, he added.

“Applying these averages to the surface envelope of the deposit and assuming an 80% true width and 2.5 specific gravity, we would estimate a mineral endowment of 478.9 million ounces of silver,” the analyst noted.

Resource estimate 'too conservative'

Reagor pointed out that it is unlikely the entire mineralized envelope will be included in an initial resource estimate but said Roth had increased its resource estimate to 250 million ounces of silver because the previous 200 million ounce estimate may be “too conservative.”

The analyst also said that Roth's price target fro New Pacific would increase by C$0.40 for each 25 million ounces of additional resources that the company is able to delineate.

“We continue to believe there is significant resource expansion potential beyond the initial drilling area,” Reagor concluded.

New Pacific is exploring and developing precious and base metals properties in South America, Canada and China. Its flagship property is the Silver Sand project in the Potosí Department of Bolivia.

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

Quick facts: New Pacific Metals

Price: $3.09

Market: TSX-V
Market Cap: $440.12 m
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Full interview: New Pacific Metals releases metallurgical testing from...

New Pacific Metals (CVE: NUAG) President Gordon Neal sat down with Steve Darling from Proactive Vancouver to talk about the latest work that was done on their Silver Sand Project in Bolivia. Neal talked about some of the results from testing and also about their drill program. Neal telling...

on 23/8/19

3 min read