VANCOUVER, BRITISH COLUMBIA – MAY 24, 2011 – New Pacific Metals Corp. (TSX-V: NUX) (the “Company”) announces its unaudited consolidated financial results for the third quarter ended March 31, 2011 and its exploration budget for fiscal year 2012. All references to dollars or monies are expressed in Canadian dollars.
THIRD QUARTER HIGHLIGHTS
As of March 31, 2011, the Company had working capital of $40,263,087 (June 30, 2010 – $8,964,681). Cash and cash equivalents plus short term investments amounted to $42,516,662 (June 30, 2010 – $9,237,514).
During the quarter, the Company:
â€� completed the sale of a Chinese subsidiary and received net proceeds of $19.5 million; and
â€� commenced preparation work for the upcoming drilling and exploration program at the Tagish Lake Gold Property, including preparation and submission of certain permits related to the planned fiscal year 2012 exploration. As of March 31, 2011, a total of $567,054 in exploration expenditures were incurred, of which $436,321 was paid for in the current quarter.
For the three months ended March 31, 2011, the Company recorded income of $15,292,495 from continuing operations including a one-time event represented by the sale of the Chinese subsidiary. For the three months ended March 31, 2010, the Company recorded a loss of $345,739 from its continuing operations. The total expenses for the three months ended March 31, 2011 was $919,083, an increase of $555,675 compared to $363,408 in the same period last year. This increase was mainly due to the following:
â€� an increase in salary and benefit expenses of $209,734 to $301,064 (Q3 2010 – $91,330). In connection with the acquisition of Tagish Lake Gold Corp, the Company assembled a team of professionals to carry out the exploration and development of the Tagish Lake Gold Property;
â€� an increase in stock-based compensation of $112,687 to $191,504 (Q3 2010 – $78,817) due to granting stock options to directors, officers, and employees; and
â€� an increase in foreign exchange losses of $223,162 to $224,362 (Q3 2010 – $1,200) due to the weakening of the Chinese Yuan relative to the Canadian dollar.
Losses from discontinued operations in regards of two Chinese subsidiaries were $60,270 (Q3 2010 – $71,928).
FISCAL 2012 YEAR OUTLOOK AND EXPLORATION PROGRAM BUDGET
The Company’s focus is the development of the Tagish Lake Gold Property, a property which consists of 178 square kilometres of mineral claims in Yukon Territory, having three known deposits: Goddell Gold, Skukum Creek Gold-Silver, and Mt. Skukum Gold Projects.
For the 2012 fiscal year, 24,000 metres of surface drilling and 36,000 metres of underground drilling (60,000 metres in total) are planned with total estimated expenditures of $16.5 million. The fiscal 2012 planned expenditures are broken down as follows:
1. Permitting ($0.85 million) – The Company plans to initiate the Environmental Assessment Study for the Tagish Lake Gold Property, which is required to apply for the Quartz Mining License. The Company will also carry out a feasibility study, using an in-house technical team combined with outside consulting firms.
2. Surface Infrastructure ($0.68 million) – The budget include expansion of the camp from 25 person to 50 person by refurbishing an 11,000 square feet camp facility already on site, refurbishing a 5,000 square feet geological office and core logging facility, and repairing some access roads.
3. Equipment ($1.4 million) – This budget includes the purchase of generators, pumps, ventilation, electronic, communication, and camp office equipment.
4. Underground drilling at Goddell ($4.4 million) – The de-watering, rehabilitation, and new drill station preparation at Goddell portal is currently underway and will be completed by the end of June 2011. Underground drilling is expected to start in mid-July with two underground drill rigs being employed to carry out about 23,000 metres of underground drilling. The underground drilling will focus on the area of 1,000 metre long and 600 metre down or up dip of the PD Zone and the Merged Zone, where previous drilling, such as Drill hole 97-41, intercepted 64.69 metres grading 5.75 g/t Au (please refer to January 13, 2011 Press Release).
5. Skukum Creek underground drilling ($3.1 million) – At the Skukum Creek site, located at about six kilometres southwest from the Goddell Portal, 13,000 metres of underground drilling is planned to target depth extensions of four mineralized zones where historical drilling has only focused on portions of the four mineralized zones and only to about 300 metres from the surface.
6. Surface drilling and geophysics ($4.6 million) – Commencing July 2011, a total of 24,000 metres of surface drilling is planned, of which 5,500 metres is at the Raca site. For the Raca site, located along the structural extension of the Skukum Creek mineralization zones (Rainbow Zone) to the northeast, 5,500 metres of surface drilling is planned to test extension of the known historical drilling and surface gold anomalies. The drill hole Raca 97-1, located about 500 metres northeast of the Rainbow zone of the Skukum Creek Project, intercepted 3.6 metres grading 2.66 g/t gold and 561 g/t silver. At the surface, soil gold anomalies outlined before 1998 by a previous owner, (all associated with anomalous values of silver and base metals), extend over two kilometres along a northeast structure hosting rhyolite dykes, with peak values up to 1,000 ppb gold. Based on a 1986 geological report by West Mount Resources, several surface chip samples over >10 metres wide returned over 1 g/t gold and one composite chip sample returned 20 metres grading 4 g/t gold and 19.9g/t silver.
In addition, several other regional gold-silver targets have been planned for about 18,500 metres of surface drilling, including the Charleston gold-silver showing, a surface extension of the Goddell mineralization zone, and a copper-molybdenum anomaly at the Porter alteration structure zone.
The Company is also expanding its land holding by staking the area surrounding its existing land position. Concurrent with this surface drilling, the Company will conduct airborne geophysical survey of 1,000 line kilometers and ground survey of 40 line kilometers.
7. General operations ($1.5 million) â€” These costs are for general operations such as camp operations, safety measures, and salaries and administration.
The Company’s Unaudited Interim Consolidated Financial Statements and Management’s Discussion and Analysis are available for review on our website at www.newpacificmetals.com and through SEDAR at www.sedar.com.
About New Pacific Metals Corp.
New Pacific Metals Corp. is engaged in the exploration and development of mineral resources in Canada. The Company’s strategy is to focus on projects, which it believes can be developed in a relatively short time frame into high-margin operations with reasonable development capital profiles. Its goal is to get a project into production with sufficient initial resources, but before the full resource potential of the property is defined, so that further exploration and potential development costs can be funded from the cash flows generated from early operations.
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