New Pacific Reports Financial Results FOR the Year Ended
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NEWS RELEASE
Trading Symbol: TSX: NUAG
OTCQX: NUPMF
NEW PACIFIC REPORTS FINANCIAL RESULTS FOR THE YEAR ENDED JUNE 30, 2020 –
Treasury of $66.9 Million to Advance the Silver Sand Project and Regional Exploration Initiatives
NEW PACIFIC ENTERS INTO ARRANGEMENT AGREEMENT WITH WHITEHORSE GOLD TO
SPIN-OUT THE TAGISH LAKE GOLD DEPOSITS
VANCOUVER, BRITISH COLUMBIA – August 26 , 2020 : New Pacific Metals Corp. (“New Pacific” or the
“Company”) announces its audited consolidated financial results for the year ended June 30, 2020.
This news release should be read in conjunction with the Company's MD&A and the financial statements and
notes thereto for the corresponding period which have been posted under the Company’s profile on SEDAR
at www.sedar.com and are also available on the Company's website at www.newpacificmetals.com. All
figures are expressed in Canadian dollars unless otherwise stated.
FISCAL 2020 HIGHLIGHTS
Inaugural independent NI 43 -101 Mineral Resource estimate for the Silver Sand Project, one of the
largest new global silver discoveries in the last decade and the largest Bolivian silver discovery since the
mid-1990s: Measured & Indicated of 155.86 Moz of silver and 35.55 Moz of silver in the Inferred
category. The deposit remains open for expansion;
Discovered a new zone of high grade silver mineralization, Snake Hole, adjacent to the Silver Sand
deposit - discovery hole intersected 33m @ 517 g/t (see News Release from August 6, 2020 and January
13, 2020 for details).
Commenced regional silver exploration – acquired the stand -alone Silverstrike Project, a Silver Sand
analog comprised of underexplored, structurally controlled, silver -polymetallic sandstone h osted
mineralization centred on the historic Berenguela mining district;
Increased the Companies bench strength with key hires during the period – COO transitioned to CEO
role, added a VP Sustainability, dedicated Silver Sand Project Manager and Bolivian S ustainability team
members;
Commenced advanced studies on the Silver Sand Project – Preliminary Economic Assessment,
Environmental and Social baseline studies and regional exploration on the Silverstrike Project;
Continued focus on creating stakeholder val ue – transferred the Tagish Lake Gold Project to Whitehorse
Gold Corp. (“Whitehorse Gold”) and will, subject to shareholder approval, distribute Whitehorse Gold
common shares to the Company’s shareholders on a pro rata basis by way of a plan of arrangement; and
Strengthened the treasury by raising net proceeds of $38.9 million through two bought deal financings to
fund exploration and development studies. Maintained strong treasury position of $66.9 million as at
June 30, 2020.
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FINANCIAL RESULTS
Net income attributable to equity holders of the Company for the year ended June 30, 2020 was $7,932,299
or $0.05 per share (year ended June 30, 2019 - net loss of $2,420,904 or $0.02 per share).
The Company’s financial results were primarily impacted by the foll owing: (i) income from investments of
$1,761,514 compared to income of $1,532,391 in the prior year; (ii) operating expenses of $6,187,954
compared to $3,267,707 in the prior year; (iii) impairment recovery of $11,714,944 on mineral property
interests compared to impairment of $779,823 in the prior year; and (iv) foreign exchange gain of $624,383
compared to loss of $64,491 in the prior year.
Income from investments for the year ended June 30, 2020 was $1,761,514 (year ended June 30, 2019 –
income of $1,532,391).
Within the income from investments, $1,605,982 was gain on the Company’s equity investments, $14,089
was loss from fair value change partially offset by interest earned on bonds, $139,597 was dividends received
on preferred shares, and $30,024 wa s interest income earned on cash and GICs. As of the date of this news
release, the Company’s material investments are preferred shares issued by the largest five Canadian Banks
with weighted average dividends yield of 5.71% and Canadian GICs earning weigh ted average interest of
0.91%.
Operating expenses for the year ended June 30, 2020 were $6,187,954 (year ended June 30, 2019 -
$3,267,707).
Impairment recovery for the year ended June 30, 2020 was $11,714,944 related to the Tagish Lake Gold
Project compared to impairment loss of $779,823 in the prior year related to the RZY Project.
Foreign exchange gain for the year ended June 30, 2020 was $624,383 (year ended June 30, 2019 – loss of
$64,491).
The Company holds a portion of cash and cash equivalents and bonds in US dollars while the Company’s
functional currency is Canadian dollar. The fluctuation in exchange rates between the US dollar and the
Canadian dollar will impact the financial results of the Company. During the year ended June 30, 2020, the U S
dollar appreciated by 4.1% against the Canadian dollar (from 1.3087 to 1.3628) while in the prior year the US
dollar depreciated by 0.6% against the Canadian dollar (from 1.3168 to 1.3087).
SILVER SAND PROJECT
The Company has carried out extensive expl oration and resource definition drill programs on its Silver Sand
Project since acquisition in 2017. From 2017 to 2019 a total of 386 holes in 97,619m of drilling were
completed – one of the largest green fields discovery drill programs in South America during this period.
On April 14, 2020, the Company released the inaugural NI 43 -101 Mineral Resource estimate for its 100%
owned Silver Sand Project. Using a 45 g/t silver cut -off-grade the estimate reported Measured & Indicated
resource tonnes of 35.39 Mt at 137 g/t Ag for 155.86 Moz and Inferred resource tonnes of 9.84 Mt at 112 g/t
Ag for 35.55 Moz see News Release for details.
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The Company commenced its 2020 drill campaign during the first quarter of 2020, a total of 1,589.75m of
drilling was completed before field -based operations in Bolivia were suspended due to the COVID -19
pandemic.
Advanced studies have commenced on the Project, following a competitive tendering process, the Company
selected CSA Global Consultants Canada Ltd. (an ERM Group company ), Knight Piésold Consultores S.A., and
Wood plc (an Amec Foster Wheeler company) to lead the Preliminary Economic Assessment, Environmental
baseline study, and Social baseline studies, respectively. The initial desktop portion of the studies are
currently in progress.
For the year ended June 30, 2020, total expenditures of $12,731,745 (year ended June 30, 2019 -
$10,725,924) were capitalized under the project comprising of the 2019 -2020 drill campaign, site and camp
service and construction, maintaining a regional office in La Paz, management team and workforce for the
project.
SILVERSTRIKE PROJECT
In December 2019, the Company acquired a 98% interest in the Silverstrike Project from an arm’s length
private Bolivian corporation (the “Vendor”) by making a one-time cash payment of US$1,350,000. Under the
agreement the Company’s Bolivian subsidiary will cover 100% of the future expenditures including
exploration, development and mining production activities. The agreement has a term of 30 years and
renewable for another 15 years. It is subject to an approval by Bolivia’s Jurisdictional Mining Administrative
Authority (Autoridad Jurisdiccional Administrativa Minera or “AJAM”) .
The Silverstrike Project consists of approximately 13km 2 and is located approximately 140 kilometres
southwest of La Paz, Bolivia. Silverstrike shares many similarities with the Silver Sand Project pre -discovery
drilling namely: sandstone hosted structurally controlled silver -polymetallic mineralization centere d on a
historic mining district – the Berenguela District, presence of felsic Tertiary intrusives with corresponding
multiple silver rich occurrences associated with extensive sercitic alteration and underexplored with limited
modern exploration. During th e period the Companies exploration team commenced geological, structural
and alteration mapping in addition to geochemical sampling on the Project.
For the year ended June 30, 2020, expenditures of $640,102 (year ended June 30, 2019 - $nil) were
capitalized under the project related to exploration camp construction, fieldwork and staffing for the project.
TAGISH LAKE GOLD PROJECT
The Tagish Lake Gold Project (“TLG Project”), covering an area of 166 km 2, is located in the Yukon Territory,
Canada, and cons ists of 1,051 mining claims hosting three identified gold and gold -silver mineral deposits:
Skukum Creek, Goddell Gully and Mount Skukum respectively.
New Pacific Metals acquired the TLG Project in December 2010 and completed a single exploration season in
2011 prior to placing the Project on care and maintenance. During the year, the Company performed a
strategic review of the Project and established a wholly owned subsidiary, Whitehorse Gold, to hold its 100%
interest. In Q4, fiscal 2020, the Company ob tained a Class 1 exploration permit, commenced desktop
technical studies and analysis of the project including an updated exploration plan.
As a result, the Company reversed the previously recorded impairment on TLG Project to its recoverable
amount, being its fair value less costs of disposal (“FVLCD”). The fair value was determined using a market
approach based on the pricing parameters implied by the market value of selected comparable transactions
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involving the sale of similar companies or mineral pro perties. Specifically, the comparable in -situ resource
multiples (Enterprise Value (“EV”) per ounce of contained gold (“EV/R&R”)) observed in comparable
transactions has been used to estimate the fair value. As a result, the Company recognized an impairmen t
reversal of $11,714,944 for the year ended June 30, 2020.
For the year ended June 30, 2020, total expenditures of $105,056 (year ended June 30, 2019 - $nil) were
capitalized under the project.
ARRANGEMENT AGREEMENT AND SPIN-OUT
Further to the Company 's news release on July 22, 2020, the Company is pleased to announce that it has
entered into an arrangement agreement (the "Arrangement Agreement") with its wholly -owned subsidiary
Whitehorse Gold. In accordance with the terms of the Arrangement Agreement , the Company proposes to
spin-out all of the existing common shares of Whitehorse Gold to Company shareholders by way of a share
exchange under a court approved plan of arrangement pursuant to the Business Corporations Act (British
Columbia) (the "Spin-Out").
It is anticipated that each shareholder of the Company will be entitled to receive, through a series of
transactions set out in the plan of arrangement, for each common share of the Company held, one new
common share of New Pacific following the Arrangement and a pro rata distribution of the common shares of
Whitehorse Gold held by New Pacific. Upon the Spin -Out becoming effective, Whitehorse Gold will cease to
be a wholly-owned subsidiary of the Company. The Company also intends to seek a listing of the Whitehorse
Gold common shares on the TSX Venture Exchange, but no assurance can be provided that such a listing will
be obtained. Any such listing will be subject to Whitehorse Gold fulfilling all of the requirements of the TSX
Venture Exchange.
The purpose of the Spin -Out is to reorganize the Company and its assets into two separate companies. The
board of directors of the Company believes this will provide shareholders with additional investment choices
and flexibility and enhanced value as the Company and Whitehorse Gold will be solely focused on the pursuit
and development of their respective assets. Upon completion of the Spin -Out, the Company will continue to
focus on the exploration and development of its Silver Sand and SIlverstrike projects in Bolivia and
Whitehorse Gold will focus on the exploration and development of the TLG Project.
The Spin -Out requires the approval of the Company's shareholders, approval from stock exchanges and
regulatory authorities and approval of the British Columbia S upreme Court in order to proceed, and is also
subject to other closing conditions as outlined in the Arrangement Agreement. There can be no assurance
that such approvals will be obtained or that the Arrangement will be completed on the terms contemplated,
or at all. Additional details on the Spin -Out will be contained in the management information circular
prepared for the Company's annual general and special meeting scheduled for September 30, 2020. The
Company urges all shareholders to read the management information circular carefully and in its entirety.
The foregoing description is qualified in its entirety by reference to the full text of Arrangement Agreement
which will be filed on SEDAR.
Technical information contained in this news release has been reviewed and approved by Alex Zhang, P.
Geo., Vice President of Exploration, who is a Qualified Person for the purposes of NI 43-101.
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ABOUT NEW PACIFIC
New Pacific is a Canadian exploration a nd development company which owns the Silver Sand Project, in the
Potosí Department of Bolivia, and the Tagish Lake Gold Project in Yukon, Canada.
For further information, please contact:
New Pacific Metals Corp.
Gordon Neal
President
Phone: (604) 633-1368
Fax: (604) 669-9387
www.newpacificmetals.com
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain of the statements and information in this news release constitute “forward -looking statements”
within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward -looking
information” within the meaning of applicable Canadian provincial sec urities laws. Any statements or
information that express or involve discussions with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions or future events or performance (often, but not always, using words or
phrases s uch as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”,
“assumes”, “intends”, “strategies”, “targets”, “goals”, “forecasts”, “objectives”, “budgets”, “schedules”,
“potential” or variations thereof or stating that certa in actions, events or results “may”, “could”, “would”,
“might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar
expressions) are not statements of historical fact and may be forward -looking statements or informati on.
Such statements include, but are not limited to: obtaining relevant approvals for the Spin -Out; all conditions
referenced in the Arrangement Agreement being satisfied; completion of the Spin -Out; the listing of the
Whitehorse Gold common shares on the TSX Venture Exchange; the number of Whitehorse Gold common
shares received by shareholders of the Company; and the benefits of the Spin -Out on the operations of the
Company and Whitehorse Gold.
Forward-looking statements or information are subject to a var iety of known and unknown risks,
uncertainties and other factors that could cause actual events or results to differ from those reflected in the
forward-looking statements or information, including, without limitation, risks relating to: global economic
and social impact of COVID -19; fluctuating equity prices, bond prices, commodity prices; calculation of
resources, reserves and mineralization, foreign exchange risks, interest rate risk, foreign investment risk; loss
of key personnel; conflicts of interest; dependence on management and others.
This list is not exhaustive of the factors that may affect any of the Company’s forward -looking statements or
information. Forward-looking statements or information are statements about the future and are inherently
uncertain, and actual achievements of the Company or other future events or conditions may differ materially
from those reflected in the forward -looking statements or information due to a variety of risks, uncertainties
and other factors, including, without limitation, those referred to in the Company’s Annual Information Form
for the year ended June 30, 2019 under the heading “Risk Factors”. Although the Company has attempted to
identify important factors that could cause actual results to differ materially , there may be other factors that
cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place
undue reliance on forward-looking statements or information.
The Company’s forward -looking statements or info rmation are based on the assumptions, beliefs,
expectations and opinions of management as of the date of this news release, and other than as required by
applicable securities laws, the Company does not assume any obligation to update forward -looking
statements or information if circumstances or management’s assumptions, beliefs, expectations or opinions
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should change, or changes in any other events affecting such statements or information. For the reasons set
forth above, investors should not place undue reliance on forward-looking statements or information.
CAUTIONARY NOTE TO US INVESTORS
The disclosure in this news release was prepared in accordance with Canadian National Instrument 43 -101
("NI 43 -101"), which differs significantly from the current requir ements of the U.S. Securities and Exchange
Commission (the "SEC") set out in Industry Guide 7. Accordingly, such disclosure may not be comparable to
similar information made public by companies that report in accordance with Industry Guide 7. In particular ,
this news release may refer to "mineral resources", "measured mineral resources", "indicated mineral
resources" or "inferred mineral resources". While these categories of mineralization are recognized and
required by Canadian securities laws, they are no t recognized by Industry Guide 7 and are not normally
permitted to be disclosed in SEC filings by U.S. companies that are subject to Industry Guide 7. U.S. investors
are cautioned not to assume that any part of a "mineral resource", "measured mineral resou rce", "indicated
mineral resource", or "inferred mineral resource" will ever be converted into a "reserve." In addition,
"reserves" reported by the Company under Canadian standards may not qualify as reserves under Industry
Guide 7. Under Industry Guide 7, mineralization may not be classified as a "reserve" unless the mineralization
can be economically and legally extracted or produced at the time the "reserve" determination is made.
Accordingly, information contained or referenced in this news release cont aining descriptions of mineral
deposits may not be comparable to similar information made public by U.S. companies subject to the
reporting and disclosure requirements of Industry Guide 7. "Inferred mineral resources" have a great amount
of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot
be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category.
Further, while NI 43 -101 permits companies to disclos e economic projections contained in preliminary
economic assessments and pre-feasibility studies, which are not based on "reserves", U.S. companies have not
generally been permitted under Industry Guide 7 to disclose economic projections for a mineral prop erty in
their SEC filings prior to the establishment of "reserves". Disclosure of "contained ounces" in a resource is
permitted disclosure under Canadian reporting standards; however, Industry Guide 7 normally only permits
issuers to report mineralization that does not constitute "reserves" by Industry Guide 7 standards as in -place
tonnage and grade without reference to unit measures. Historical results or feasibility models presented
herein are not guarantees or expectations of future performance.