New Pacific Metals Reports Results of Updated Carangas Preliminary Economic Assessment: Post-tax $2.65 Billion NPV (5%) and 35.9% IRR; 339.0 Million Oz of Silver Equivalent Produced

All upside is hypothetical—no real cash flow, just a big, early-stage model.

What the company is saying

New Pacific Metals Corp. is presenting its Carangas project in Bolivia as a world-class, high-margin silver-gold-zinc-lead mine, based on an updated preliminary economic assessment (PEA). The company wants investors to focus on headline figures: a post-tax NPV (5%) of $2.65 billion and a 35.9% IRR at base case metal prices, with a 19-year mine life and a rapid 2.4-year payback period. Management frames the project as robust and scalable, emphasizing large-scale production—195 million ounces of silver, 1.1 million ounces of gold, and significant zinc and lead output. The announcement is heavy on technical and economic detail, with extensive sensitivity analyses showing even higher NPVs and IRRs at more bullish metal prices. The company highlights low all-in sustaining costs (AISC) and claims the project will be competitive globally, but it buries the fact that all numbers are modelled and that no actual mining, permitting, or financing has occurred. There is no mention of binding offtake, construction, or funding agreements, nor any disclosure of actual operational milestones achieved. The tone is confident and optimistic, projecting technical competence and a sense of inevitability about project success. No notable individuals or institutional investors are named, so there is no external validation or high-profile endorsement to bolster credibility. This narrative fits a classic early-stage mining IR strategy: maximize perceived value through technical studies, while deferring discussion of execution, funding, and jurisdictional risks.

What the data suggests

The disclosed numbers are entirely forward-looking, derived from a single updated PEA, and do not reflect any actual financial performance or operational progress. The headline post-tax NPV of $2.65 billion and IRR of 35.9% are based on assumed metal prices—$45/oz silver, $3,400/oz gold, $1.20/lb zinc, and $0.90/lb lead—which are above long-term historical averages and may not be sustainable. The project requires $644.5 million in initial capital and $1.2 billion in total LOM capex, with closure costs of $149.8 million, making it highly capital intensive. Sensitivity tables show that NPV and IRR drop sharply at lower metal prices (e.g., NPV falls to $973 million and IRR to 16.3% at $22.50/oz silver), highlighting the project's vulnerability to commodity price swings. There is no evidence of actual expenditures, revenues, or progress on permitting, construction, or financing. The company provides detailed breakdowns of costs, recoveries, and production, but omits any historical financials or realized results, making it impossible to assess trend or execution capability. An independent analyst would conclude that while the technical disclosure is thorough for a PEA, the entire value proposition is hypothetical and contingent on multiple unproven assumptions. The gap between what is claimed (imminent, large-scale value) and what is evidenced (a model, not a mine) is substantial.

Analysis

The announcement is highly positive in tone, emphasizing large NPV and IRR figures, long mine life, and substantial production estimates. However, all key metrics are derived from an updated preliminary economic assessment (PEA), which is inherently forward-looking and model-based, not realised. There is no disclosure of actual profitability, cash flow, or operational milestones achieved to date, and no evidence of binding financing, construction, or offtake agreements. The capital outlay is very large ($644.5 million initial, $1.2 billion LOM), but all benefits are projected over a 19-year mine life, with at least two years of pre-production and no immediate earnings impact. The gap between narrative and evidence is significant: while the technical detail is high, the entire value proposition remains hypothetical until further de-risking steps (permitting, financing, construction) are completed.

Risk flags

• ●Operational risk is high: the project is still at the PEA stage, with no permits, construction, or mining activity underway. This matters because PEAs are conceptual and often change materially as projects advance, exposing investors to significant uncertainty.
• ●Financial risk is acute: the project requires $644.5 million in initial capital and $1.2 billion over its life, with no evidence of committed funding or financing partners. Investors face dilution or project delays if capital cannot be raised on acceptable terms.
• ●Disclosure risk is present: while the technical data is detailed, there are no actual financials, no progress on permitting, and no mention of offtake or construction agreements. This lack of real-world milestones makes it difficult to assess management's ability to execute.
• ●Jurisdictional risk is material: the project is located in Bolivia, a country with a history of regulatory and political volatility in the mining sector. This could impact permitting timelines, operating costs, or even project viability.
• ●Commodity price risk is significant: the project's economics are highly sensitive to metal prices, with NPV and IRR dropping sharply at lower silver or gold prices. Investors are exposed to downside if commodity markets weaken.
• ●Timeline/execution risk is high: all value is projected years into the future, with at least two years of pre-production and no guarantee that permitting, financing, or construction will proceed as planned. Delays or cost overruns could erode or eliminate projected returns.
• ●Pattern-based risk: the announcement fits a common junior mining playbook—large modelled NPVs and IRRs, but no real progress on de-risking steps. Investors should be wary of over-reliance on technical studies without evidence of execution.
• ●Forward-looking risk: the majority of claims are projections, not realized outcomes. This matters because forward-looking statements are inherently speculative and subject to change as new information emerges.

Bottom line

For investors, this announcement is a classic early-stage mining PEA: it offers a detailed, optimistic model of what the Carangas project could deliver, but provides no evidence that any of the value is real or achievable in the near term. The narrative is credible only to the extent that the technical study is internally consistent, but it is not supported by actual cash flow, operational milestones, or binding agreements. No institutional or notable external parties are named, so there is no third-party validation or financial commitment to de-risk the story. To change this assessment, the company would need to disclose concrete progress on permitting, binding financing, construction contracts, or offtake agreements. Key metrics to watch in the next reporting period include updates on permitting status, financing arrangements, and any evidence of actual project advancement (e.g., drilling results, environmental approvals, or signed contracts). From an investment perspective, this is a signal to monitor, not to act on—there is no actionable value until the company demonstrates real progress beyond technical modelling. The single most important takeaway is that all upside is hypothetical: until the company secures permits, funding, and begins construction, the Carangas project remains a paper asset, not a source of real shareholder value.

Announcement summary

(TSX:NUAG) New Pacific Metals Corp. announced the results of its updated preliminary economic assessment technical report for the Carangas project in Oruro Department, Bolivia, with a post-tax net present value (NPV) (5%) of $2.65 billion and an internal rate of return (IRR) of 35.9% at base case metal prices. The project features a 19-year life of mine (LOM), excluding two years of pre-production, producing approximately 195 million ounces of payable silver, 1.1 million ounces of payable gold, 1,453 million pounds of payable zinc, and 941 million pounds of payable lead, or 339.0 million ounces silver equivalent. Initial capital costs are $644.5 million, with a post-tax payback period of 2.4 years, and total LOM capex of $1.2 billion, including $422.7 million of growth capex and $166.5 million in sustaining capex. The average all-in sustaining cost (AISC) is $19.16/oz AgEq, or $0.11/oz Ag net of by-products, with average annual payable silver metal over LOM of 10.6 million ounces. The company will continue to advance technical work, including a 30,000 meters infill drilling program, and focus on permitting, aiming to complete the Exploration Licenses to Administrative Mining Contracts conversion and start the Environmental Impact Assessment Study process. Sensitivity analyses show post-tax NPV and IRR ranging from $973 million/16.3% at $22.50/oz Ag to $4.16 billion/51.5% at $67.50/oz Ag, and from $2.04 billion/34.7% at $1,700/oz Au to $3.23 billion/37.0% at $5,100/oz Au. Closure costs are estimated at $149.8 million.

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