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Roth Capital Partners repeats 'Buy' on New Pacific Metals after Silver Sand drill results

Analyst Joe Reagor’s optimism about New Pacific stems from the success of the release of the Vancouver company’s first 19 drill holes from its Snake Hole target at its Silver Sand project in Bolivia

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On the list of positive catalysts for New Pacific going forward is the fact that it will continue to provide regular drilling updates in the coming months

An analyst with Roth Capital Partners is expressing his bullishness on New Pacific Metals Corp by repeating a 'Buy' rating on the stock and ratcheting up his price target  to C$6.25 from C$5.50.

Joe Reagor’s optimism about New Pacific stems from the success of the release of the Vancouver company’s first 19 drill holes from its Snake Hole target at its Silver Sand project in Bolivia.

Fifteen of the nineteen holes returned “significant” mineralized intercepts with these fifteen holes having an average intercept of 16.3 meters and an average grade of 177.2 grams per ton of silver.

READ: New Pacific Metals eyeing pittable, high grade, bulk operation at Silver Sand; resource estimate by Christmas

“We were encouraged by the initial drill results and we anticipate further positive catalysts in the coming months,” said Reagor in a note to investors. “While it is still early on at Snake Hole, we believe the first round of drill results provide a potential higher-grade deposit near Silver Sand Main.”

Reagor is of the view that Snake Hole could generate a 20 plus million silver ounce satellite deposit.

On the list of positive catalysts for New Pacific going forward is the fact that it will continue to provide regular drilling updates in the coming months. It’s also believed that the company will release an initial resource estimate either late in the first quarter or early in the second quarter. “We believe this initial resource estimate could provide a significant positive catalyst if the company is able to exceed the 250 million ounce estimate we have outlined,” said Reagor.

“While we acknowledge the company’s current share price is above our price target, we also believe the near-term catalysts are unlikely to result in a valuation decline. Thus, we are maintaining our Buy rating,” he added.

While New Pacific is at an earlier stage of development than most of the mining companies Roth covers, Reagor argues that the company’s Silver Sand asset is “too unique” to ignore.

New Pacific is advancing precious and base metals properties and the main project is the Silver Sand project in Bolivia, which is one of the fastest growing economies in South America.

This silver asset was added to the portfolio when it bought Alcira for US$40 million in 2017 and it is one of the group's seven polymetallic properties in Bolivia.

Nearby infrastructure is relatively good. It lies 54 km from the city of Potosi, of which 27 km is paved and the rest is gravel. Water is available for any future operations.

The project consists of three 100% owned concessions of around 7 sq km plus an area of around 57 sq km and has been subjected to some small-scale, historic mining and was drilled during the period 2012 through to 2015 by a previous company.

The group's other six properties in Bolivia are early-stage exploration projects, which have either been subject to limited small-scale mining or historical drilling.

Elsewhere, New Pacific owns the Tagish Lake gold project in Yukon, Canada (1,512 claims), and the RZY early stage silver-lead-zinc project in Qinghai province, China.

Quick facts: New Pacific Metals

Price: 6.32 CAD

TSX:NUAG
Market: TSX
Market Cap: $962.53 m
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