- Bolivia, despite its rich mining history, remains one of the most underexplored silver jurisdictions due to a slow permitting process, but investors may benefit from dramatic upside if reforms advance.
- New Pacific Metals holds two of the most promising undeveloped silver projects globally in the country: Silver Sand and Carangas.
- Together, the two projects could position New Pacific among the top global primary silver producers, with potential combined output of nearly 19 million ounces annually when production begins.
- Backing from mining companies Silvercorp and Pan American Silver signals confidence in long-term development.
As global demand for silver intensifies, largely fueled by industrial applications such as solar panels and electric vehicles, supply remains constrained. Few new primary silver projects are advancing, leaving producers searching for untapped potential. For New Pacific Metals (NYSE American: NEWP) (TSX: NUAG), a Canadian exploration and development company, that opportunity lies in Bolivia, a country with deep silver reserves, but limited modern development.
Bolivia is geologically rich, with a long and significant silver history, but is currently underexplored. Due to a decade of slow-moving regulatory frameworks and limited foreign investment, the country has lagged behind more active mining jurisdictions. Still, there is growing recognition within Bolivia of the need to attract external capital to reignite its mining sector. With fiscal deficit hovering around 10% in recent years, foreign direct investment is increasingly seen as a way to strengthen the economy. This environment may mark a potential turning point for companies willing to operate in a higher-risk jurisdiction with significant untapped geological potential.
New Pacific Metals has positioned itself as a first mover in this environment. The company’s flagship Silver Sand project is among the most advanced silver developments in Bolivia. A preliminary feasibility study released in June 2024 outlines a 13-year mine life producing 12 million ounces of silver annually, 15 million ounces in the initial years. The economics are robust: at a silver price of US$24 per ounce, the project yields a post-tax NPV of US$740 million and a 37% IRR, with an all-in sustaining cost (“AISC”) of just US$10.69 per ounce. Payback is expected in under two years.
Meanwhile, the company’s second project, Carangas, expands its silver footprint even further. A preliminary economic assessment from September 2024 projects annual output of 6.6 million ounces of silver over a 16-year lifespan. Carangas also boasts favorable economics: US$501 million post-tax NPV, 26% IRR, and AISC of US$7.60, after accounting for lead and zinc by-product credits. Significantly, Carangas has over 1 million ounces of gold mineralization at depth, not yet factored into its economics, offering future upside.
Together, Silver Sand and Carangas could position New Pacific among the top global primary silver producers, with potential combined output of nearly 19 million ounces annually when production begins.
Bolivia presents challenges, with political uncertainty, regulatory delays, and untested permitting frameworks making project timelines less predictable. However, if the country could implement even modest reforms, the payoffs for early investors could be considerable.
Major shareholders see the same potential. New Pacific is 28% owned by Silvercorp Metals (NYSE-A: SVM) (TSX: SVM), a Canadian mining company producing silver, gold, lead, and zinc with a long history of profitability, and 13% owned by Pan American Silver (NYSE: PAAS) (TSX: PAAS), which describes itself as the world’s top silver producer. Their presence lends support and hints at possible strategic moves, either toward project development or future acquisition.
The market backdrop is also compelling. According to the World Silver Survey, industrial applications now account for 60% of annual silver demand (https://nnw.fm/LOJHe). As the transition to clean energy accelerates, the demand for silver in solar technology and battery applications is expected to rise, in addition to the growing appeal of silver as a bullion investment.
In spite of demands, few new high-grade, low-cost silver projects are coming online. That scarcity underscores the importance of projects like Silver Sand and Carangas. With promising geology, supportive shareholders, and improving local sentiment toward investment, New Pacific offers exposure to one of the last relatively untapped silver frontiers. Success will depend not just on ore grades or economics, but also on navigating Bolivia’s regulatory environment, yet the potential rewards are seen as significant.
For more information, visit the company’s website at www.NewPacificMetals.com.
NOTE TO INVESTORS: The latest news and updates relating to NEWP are available in the company’s newsroom at https://nnw.fm/NEWP
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