Well over a year after announcing the start of a massive drilling program, New Pacific Metals (NUAG.V) finally unveiled the drill results.
And suddenly the world realized that a new, world-class silver project had been discovered — one with the potential to shake up the sector all by itself.
The good news for investors is that the market has barely begun to recognize how valuable this discovery could be.
By Brien Lundin
Dear John,
Who says a sequel is never as good as the original? In this case, the sequel could make quick-acting investors a fortune.
Allow me to explain....
About 15 years ago, I happened upon one of the greatest investment wins of my long career. I was walking down the rows of an investment conference when someone called my name.
It was my friend Rui Feng, a PhD geologist who had locked up an exceptional silver project in China. It was a fantastic deposit, but no one was paying it any attention.
So Rui showed me the whole story from top to bottom. I couldn’t believe how much high-grade silver was being indicated.
I recommended the stock to my Gold Newsletter readers. I began buying it myself.
That company was Silvercorp Metals...and it multiplied more than 20 times over from our entry level. We made fortunes on that one.
The Past Is Prologue
With a result like that, you know that I was eager to invest in Rui’s next venture, New Pacific Metals, in 2004.
Rui showed me he has an eye for exceptional value, so I was anxious to see what he was going to find next. And I was willing to be patient...because I knew Rui wouldn’t pull the trigger unless he had a world-class target in his sights.
But I had no idea I’d have to wait over 14 years!
Still, I held every share over that time...and was absolutely amazed last year when Rui walked me through his next big find: A huge — and I mean absolutely enormous — silver project in Bolivia.
The “Silver Sand” project had been outlined by a local company to be about 1,500 meters long and around 125 meters wide. So nearly a mile long!
Better yet, the grades were fantastic. The local company had drilled three holes, with each cutting well over 150 meters of silver grading over 150 grams/tonne. Even better, the mineralization was near surface.
After drilling their own holes to confirm those results, New Pacific quickly locked up the project...raised US$40 million to acquire it...and got ready to begin their own drilling.
But first, Pan American Silver Corp., one of the world’s largest primary silver miners, flew down at Rui’s invitation to look at the Silver Sand project.
Pan American handed New Pacific C$22.7 million to get a stake in the deal.
Then, everyone waited for the drill results.
And waited. And waited.
Finally...The News We Were Waiting For
Incredibly, we waited for 15 months to get the first drill results! Normally, you’d expect them within a month or two.
Why the long wait? Apparently, New Pacific liked what they were seeing so much that they began looking to get even more land in the area before the news got out.
They were successful and, on January 11, New Pacific announced the acquisition of rights to another 56.9 square kilometers of land surrounding the Silver Sand project. With that massive land position secured, we anticipated drill results at any moment.
And last week the results came in...and exceeded even my expectations.
On January 22, New Pacific announced that they’d drilled 55,000 meters on Silver Sand in 2018 — far more than the 30,000 meters most had expected — in 98 holes. A remarkable 94 of those holes hit silver...and the results were amazing.
Highlights included 135 meters of 240 g/t silver...273 meters of 84 g/t silver...172 meters of 110 g/t silver...60 meters of 251 g/t silver...65 meters of 181 g/t silver.
And on and on and on. The scope of the project grew significantly not only with grades like these, but also with the sheer area drilled. The company announced that the drilling covered an area about 1,600 meters long north-south and up to 800 meters wide east-west.
That’s about a mile long by about a half-mile wide. Again, just enormous.
So how much silver is there? There’s no telling at this point (although one analyst I saw is confidently predicting more than 200 million ounces!).
But we’ll know in due course: New Pacific has another major news release on the way as results for a further 97 holes are pending. Plus, the company is continuing to drill at not only the initial target but other zones on their newly-acquired land.
Moreover, the company seems likely to release an initial resource estimate this year. At that point, everyone will know how big Silver Sand is.
Here’s The Opportunity
It’s important to note that most junior exploration companies announce a couple thousand meters of drilling at one time, often much less.
For a company to announce 55,000 meters of initial drilling in one fell swoop is something I’ve never encountered before in my long career in the industry.
This has a couple of compelling implications for us as investors:
1) From out of nowhere, a new world-class silver project has suddenly emerged.
2) It seems that this fact, including the sheer size of the project, has yet to be fully digested by the market. (The share price is only up about 25¢ from where it was when the company was beginning the drill program.)
3) Once the market appreciates how large Silver Sands is — and the potential it has to grow much larger as the drills keep turning — we could see some dramatic moves.
Remember: No one realized how big Silvercorp was going to be back in 2003. But those who recognized the potential and got in early had the chance to reap a 20-for-1 payday.
I think that record will be hard to beat, even for New Pacific’s remarkable Silver Sand project.
But as a shareholder myself, I’m truly excited by the potential New Pacific has to potentially multiply in value for not only myself but my Gold Newsletter readers.
I urge you to take a hard look at New Pacific Metals now, before more news comes out, and as silver prices are gaining ground once again
All the best,
Brien Lundin
Editor, Gold Newsletter
CEO, the New Orleans Investment Conference
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And Its Silver Sand Project
