Bill Cara

I have been buying New Pacific Metals (NEWP) at good prices this week. Thank you to the sellers.

February 24, 2023

I bought a lot of NEWP this week at US$2.49. This is my primary Silver holding.

Many traders today look strictly at price motion, ignoring the intrinsic value of the companies. If they happen to be stock market illiterate, they should be ordering my new book. It’s evident to me they don’t know what they are doing.

If you do not understand that intrinsic value is different than market value, this article will help:

The intrinsic value is the true value, which investors care deeply about because we buy true value when the market gives it to us at a discount.

In the case of New Pacific Metals, the market value is about US$404 million. Using data filed with regulators plus my personal calculations, I estimate the true value, as it stands today, is close to US$2 billion.

Let me show you why.

In the past month, the Company filed a technical report with regulators valuing the Silver Sand Project at US$726 million with an IRR of 39% based on a post-tax NPV (5% discount) with a total silver production of 171 million ounces over 14 years of mine life. Meanwhile, the Company continues to drill that property’s length and depth. A Pre-Feasibility Study due in July will likely show higher values.

That is one of three projects in Bolivia.

The second New Pacific Project in Bolivia is the Carangas Project. This week and back four months, the Company has four times reported monster drill results:

(1) Feb. 1: 230 Metres Grading 146 Grams Per Tonne Silver

(2) Jan. 24: 505 Metres Grading 1.22 Grams Per Tonne Gold

(3) Nov. 14: 591 Metres Grading 1.03 Grams Per Tonne Gold

(4) Oct. 19: 163 metres Grading 109 Grams Per Tonne Silver.

These are massive intercepts.

Carangas is more valuable than Silver Sand.

The third project is smaller but, in the hands of many promoters, would routinely be making “breaking news” headlines.

On Nov. 1, the Company reported one hole, DSSk0002, intersected a broad interval of 223.52 m (from 8.62 m to 232.14 m) grading 0.97 grams per tonne gold and 4 g/t silver, including an interval of 86.13 m (from 8.62 m to 94.75 m) grading 2.18 g/t gold and 7 g/t silver, which also included a higher grade sub-interval of 3.98 m (from 68.6 m to 72.58 m) grading 29.75 g/t gold and 23 g/t gold.

Because the drilling is active and extensive, and assays take a while to be reported, there are many holes to be reported in these projects.

Last week, DeNeve83 and I had a zoom call with the recently employed President of New Pacific, Andrew Williams. We came away impressed. Without any doubt, Terry Salman and Rui Feng have made a good hire.

Within two years, I believe that Rui Feng and Andrew Williams will be able to report an aggregate resource in Bolivia measuring one billion oz of silver-equivalent ore ready to be mined. A one-billion-ounce Silver discovery has never been made by a mining company. The biggest silver resource in the world today is about 775 million ounces. The miner in Poland produced 39.2 Moz in 2020. I believe that New Pacific Metals will one day soon be a rival.

At the end of the day, we are all responsible for our investments. Unfortunately, most of us don’t know how to invest.

Most people are traders who follow the squiggly lines on your charts without understanding the role of bots. So I’ll tell you how bots work.

A week ago, I bought 10,000 NEWP at US$2.73. The trades were reported on my screen at one-hundredth of a second. All these buys went through at US$2.73 except the last one – at the same precise one-hundredth of a second – at US$2.70 for 100 shares. So, 100 shares, not 10,000, defined the market.

Regulators need to put a stop to this nonsense. It’s fraud.

After the zoom call with Andrew Williams, I contacted him to talk about the damaging impact of bots. DeNeve83 followed up. When he has the time, I’ll let him tell you what he presented to Andrew and Andrew’s thoughtful response.

During a lunch in Nassau, Bahamas, in January, the topic of bots came up. Interestingly, two senior Financial Advisors from Canada’s biggest banks both stated flat out they were pissed that long-short fund clients of their banks are trading these bots, and there is nothing they can do to have it stopped.

We first raised the issue of predatory bots many years ago, and the problem has worsened. As I say, regulators have to stop these predatory bots. Market integrity is at stake.


On April 17, deneve83 posted as follows:

VALPAL has posted an excellent interview and Q&A session with New Pacific Metals’ (NEWP) CEO Andrew Williams and technical advisor Peter Megaw. By far, the most informative video on New Pacific that I have seen. View it here

They posted a similar video on Silvercorp (SVM) featuring CEO Lon Shaver and Peter Megaw. View it here

Each of these videos are about 75 minutes. If you have already seen the obligatory slide presentations, then I recommend viewing the Q&A sessions toward the end to get answers to questions you may not yet have heard addressed or thought to ask.

These videos showcase my investing rationale for buying shares of New Pacific (and Silvercorp, which owns 28% of New Pacific). I encourage investors to put in the time to watch.



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