27 Jul, 10

New Pacific Metals Signs Agreement to Sell Its 100% Interest in the XSK and HNK Gold-Polymetallic Projects in Guangdong for $30.5 Million


Vancouver, British Columbia (July 27, 2010) – New Pacific Metals Corp. (TSXV: “NUX.V”) (“New Pacific”) announces that its sole subsidiary company has signed a share transfer and cooperation framework agreement (the “Agreement”) with a Chinese gold investment company, the PGC Group Co. Ltd. According to the Agreement, New Pacific will transfer its 100% interest in Jin Chang Jiang Mining Co. Ltd. (“JCJM”), a wholly owned foreign enterprise in China, to the PGC Group for $30.5 million. JCJM’s main assets are the XSK and HNK gold-polymetallic projects in Guangdong, China. The PGC Group is a Chinese government controlled enterprise located in Shandong province. The PGC’s total assets were about $339 million by the end of 2009 and its sales revenue was about $150 million in 2009.

Pursuant to the Agreement, the PGC will first purchase a 60% interest of JCJM for $15.25 million in three instalments: 1) first payment of $3.05 million within 5 business days after signing the Agreement; 2) second payment of $4,575,000 within 25 business days after required due diligent documents are provided to the PGC Group; and 3) third payment of $7,625,000 within 5 business days after the 60% interest being officially transferred to the PGC Group, as evidenced by a new business license issued by Chinese government authorities. After the first purchase, JCJM will become a 60%/40% joint venture between the PGC Group and New Pacific.

The PGC Group will purchase the remaining 40% interest from New Pacific for $15.25 million within 24 months after signing the Agreement. The consideration for the payment will be through the issuance of shares of a subsidiary of the PGC Group. The subsidiary is in the process of applying for an initial public offering (“IPO”) or reverse take-over (“RTO”) on one of the Chinese stock exchanges. In the event that the subsidiary of the PGC Group fails to be listed through IPO or RTO, or if it does not wish to issue shares to New Pacific, then the PGC Group agrees that it will make a cash payment of $15.25 million to New Pacific for the remaining 40% interest.

New Pacific has agreed to pay a finder’s fee of 6% for the first $15.25 million payment and 5% for the second $15.25 million payment.

The completion of the whole transaction is subject to government and regulatory authorities approval.

About New Pacific Metals Corp.

New Pacific is engaged in the exploration and development of mineral resources, gold-poly-metallic projects in China and other jurisdictions. New Pacific has extensive experience in implementing high grade resource development projects. For more information about New Pacific, visit the company’s website at www.newpacificmetals.com.

For Further Information:
New Pacific Metals Corp.
Investor Relations
Phone: +1 (604) 633-1368
Fax: +1 (604) 669-9387
Email: info@newpacificmetals.com
Website: www.newpacificmetals.com

Forward Looking Information

This news release may contain forward looking statements, being statements which are not historical facts, including, without limitation, statements regarding the proposed acquisition of Tagish Lake common shares by New Pacific, the offer to pay out the secured and unsecured creditors ,and discussion of future plans and objectives. There can be no assurance that such statements will prove accurate. Such statements are necessarily based on a number of estimates and assumptions that are subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected. New Pacific Metals disclaims any intention or obligations to revise or update such statements. The following factors, among others, could cause actual results or developments to differ materially from the results or developments expressed or implied by forward looking statements: New Pacific cannot determine the number of Tagish Lake shareholders who may accept New Pacific’s Offer; New Pacific may not succeed in acquiring 66 2/3% of the outstanding Tagish Lake shares (on a fully-diluted basis); If the Offer is successful, New Pacific may not be successful in assisting Tagish Lake to obtain, and Tagish Lake may not obtain, the regulatory and other approvals and financing required to develop the Skukum mineral district; Tagish Lake may not be successful in developing the Skukum mineral district.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the release.