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Discovering Bolivia’s value

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Global Mining Review,

Canadian exploration firm, New Pacific Metals Corp. could be on the brink of a transformative discovery. Tom Azzopardi outlines how, as the company explores an historic mining site high in the Andes Mountains.

After a handful of holes at its Carangas project in western Bolivia returned significant gold values at depth, the company’s geologists are having to rethink what they thought was another deposit in the country’s silver-tin belt.

New Pacific is now doubling down, with four drill rigs operating on the site to assess the extent of the gold mineralisation.

The discovery would a breakthrough for the company and for the country, a historic mining jurisdiction which is beginning to be recognised again by investors for its geological potential and openness to investment.

Landlocked Bolivia has long been a mining powerhouse. The Cerro Rico silver mines near Potosi are estimated to have produced approximately 3 billion oz of silver over the last five centuries and the country was also a major tin producer during much of the 20th century.

The discovery of large natural gas deposits in the east of the country in the 1980s have powered a revival this century, with the economy growing by an average of almost 5% per annum between 2006 and 2018.

The revenues provided by gas exports have allowed the government to adopt economic policies to ensure the well-being of the population. Subsidised fuels prices and controls on food exports have meant Bolivians have not suffered the price shocks which have roiled the rest of the world economy since the pandemic, with the government’s Consumer Price Index rising by less than 1% in the year to April. That compares to over 10% in neighbouring Chile.

The Economist Intelligence Unit recently judged Bolivia the Latin American country best placed to resist the impact of sanctions imposed by the US and the EU against Russia.

After scaring off investors with a series of nationalisations earlier this century, the Bolivian government is looking to attract foreign investment into the mining sector again. Reserves are running at low at two of the country’s biggest mines, Sumitomo Corp’s San Cristobal and Pan American Silver’s San Vicente, and could shut in the coming years, so President Luis Arce is looking to new projects that could attract fresh investment and create jobs.

Under this new policy, several companies have begun to explore and produce in Bolivia, including Eloro Resources, Andean Precious Metals and Santacruz Silver Mining which recently completed a US$110 million deal to buy mines owned by Glencore.

New Pacific Metals was one of the first companies to benefit from the new openness when it acquired the Silver Sands project in central Bolivia in 2017. It has also signed a pioneering new production agreement with state mining company, Comibol, giving it access to a 57 km2 land package surrounding the Silver Sand core area.

Following a successful exploration campaign, the company has identified a mineral resource of 156 million oz at an average grade of 137 g/t. The company is now preparing an updated mineral resource for this later this year, including resources in several more targets at the site which will be followed a preliminary economic assessment by the end of the year.

Thanks to the shallow location of the silver resource and easy metallurgy, the company expects the deposit could be developed relatively easily into an opencast and heap leach operation within a few years.

Indeed, it is a candidate for one of six mines which President Luis Arce hope to see in production before he stands down in 2025.

The project would continue a winning streak for New Pacific’s Founder, Rui Feng. By developing and operating a series of mines in China, the geologist built SilverCorp into one of the world’s most profitable silver producers.

Excited by the prospect of turning Silver Sand into an operating mine, he has now taken over as CEO at New Pacific Metals to oversee the next stage of development. To take his place as chairman, he recently recruited Terry Salman, whose company Salman Partners has raised more than US$20 billion for mining companies over the last three decades. The move is a major coup given that it marks the first time that Salman, a legendary name in Canada’s mining sector, has agreed to join the board of one of the companies he supports.

Now Rui could be about to scale greater heights with a major gold discovery at Carangas.

Although the site has been explored before, previous owners did not drill to a significant depth and withdrew when they failed to find the minerals they were looking for.

After staking the project last year, attracted by the extensive historic mine workings at the site, New Pacific staff took a different approach, drilling in a nearby river valley rather than the two domes at the site.

The move paid off, with holes returning not only significant silver mineralisation near surface but also gold mineralisation in-depth. One of last holes from the 2021 campaign to be assayed intersected almost 600 m of mineralisation grading 1.25 g/t gold and 6 g/t silver.

New Pacific is now working intensively on the site. The company plans to drill around 40 000 m during this year’s campaign with two rigs to assess the extent of the near-surface silver mineralisation and two more to probe the gold-bearing rhyolite lying at depth.

Rui draws parallels with Filo Mining’s discovery last year of a high-grade copper-gold feeder zone at its Filo del Sol project on the Chile-Argentina border. The company’s share prices have risen almost tenfold since announcement and attracted a major investment from BHP.

As exploration continues this year, the company is expecting a series of announcements on Carangas gold-silver project and the Silver Sand project that should keep investors interest piqued. The Silverstrike project has also recently initiated a drilling campaign.

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