New Pacific Metals Corp (CVE:NUAG) (OTCQX:NUMPF) reported a maiden resource on its Silver Sand project on Tuesday that included higher-than-expected silver grades, said Roth Capital analysts in a note Wednesday.
Roth’s Joe Reagor wrote that the initial resource showed “stronger than expected” grade, which increases the project’s value on a per-ounce basis.
Silver Sand’s mineral estimate outlines a 35.4-million-ton resource grading at 137 grams per ton silver for a total of 155.9 million ounces in the measured and indicated category.
The project also has 9.8 million tons at 112 grams per ton silver for 35.6 million ounces in the inferred category.
“(While) total ounces were 23.4% below our estimate, grade was 35.4% above our estimate,” Reagor wrote. “We believe the resource estimate is a reflection of more conservative mining assumptions by the third party engineers.”
In addition, Reagor said he believes the resource should grow over time.
“We expect the initial resource is only the beginning for the Silver Sand project as the deposit remains open,” Reagor wrote. “We also note that the initial resource excludes two areas that NUAG provided potential ranges for. On the low end of these ranges, these areas would add an additional 46.5 million ounces of silver.”
Reagor told investors that the company should show further exploration success later in the year.
The research firm is maintaining a Buy rating and a C$6.25 price target on New Pacific’s stock.
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