New Pacific Metals (TSX: NUAG) (NYSE-A: NEWP) has published an updated preliminary economic assessment (PEA) for its Carangas project in Bolivia, incorporating a higher throughput rate and the inclusion of the gold zone compared to the previous PEA issued in 2024. A PEA is an early-stage economic study that is considered preliminary in nature and includes inferred resources that cannot be the basis for a final production decision; it typically precedes more definitive pre-feasibility and feasibility studies in the mining project development pipeline.

The company described the project as having robust economics with manageable upfront capital requirements. It projects annual silver production of approximately 10 million ounces and total gold output exceeding one million ounces over the life of mine. Carangas is located in the Altiplano region of Bolivia, a country with a long history of silver mining dating back to colonial-era operations at Potosí.

Economic Highlights

The updated PEA reports a post-tax net present value (NPV) of $65 billion and an internal rate of return (IRR) of 35.9% at base case metal prices of $45.00/oz silver, $3,400/oz gold, $1.20/lb zinc, and $0.90/lb lead. These base case assumptions are notably above prevailing spot prices for silver and gold, which materially influences the headline NPV figure.

Sensitivity scenarios include:

• Post-tax NPV of $16 billion and IRR of 51.5% at a silver price of $67.50/oz, with other metal prices held constant.
• Post-tax NPV of $3.23 billion and IRR of 37.0% at a gold price of $5,100/oz, with other metal prices held constant.

Production Profile

The estimated life of mine is 19 years, excluding two years of pre-production. Over this period, the project is expected to produce approximately:

• 195 Moz of payable silver
• 1.1 Moz of payable gold
• 1,453 Mlbs of payable zinc
• 941 Mlbs of payable lead

This equates to approximately 339.0 Moz of silver equivalent. At the projected output levels, Carangas ranks among the larger undeveloped silver-gold deposits in South America.

Active mining is scheduled for years 1 through 16, with all production in years 17 through 19 sourced from stockpiles. Payable silver production is expected to average approximately 15.5 Moz per year during years 1 through 8. From years 9 through 16, payable silver production is projected at approximately 7.6 Moz per year, alongside payable gold production of approximately 142.7 koz per year.

Average all-in sustaining costs (AISC) are estimated at $18.25/oz AgEq, or $12.11/oz Ag net of by-products, during the pre-gold production period.

Capital Requirements

New Pacific reported initial capital costs of $644.5 million with a post-tax payback period of 2.4 years. Total life-of-mine capital expenditure is estimated at $1.2 billion, comprising $422.7 million in growth capex and $166.5 million in sustaining capex, along with closure costs of $149.8 million.

Next Steps

The company stated it will advance the project's permitting activities, with the goal of completing the conversion of Exploration Licenses to Administrative Mining Contracts and initiating the Environmental Impact Assessment Study process during the remainder of the year. In Bolivia, the transition from exploration licenses to mining contracts and the environmental assessment process are key regulatory milestones that a project must complete before advancing toward a construction decision.