Preliminary Economic Assessment

On January 9, 2023, the Company released the preliminary economic assessment (“PEA”) results for the 100% owned Silver Sand Project in Potosi Department, Bolivia. The PEA study confirms the potential to develop a low capital intensity conventional open pit and tank leach operation at Silver Sand, producing on average 12 million ounces of silver (Doré) per annum over a 14-year mine life.

PEA Highlights ($ figures in USD):

Compelling project economics – Base Case Pre-Tax NPV (5%) of $1.1 billion and an IRR of 52%, and Post-Tax NPV (5%) of $726 million and an IRR of 39% ($22.50/oz silver)

Leveraged to silver – Using a +/- 20% sensitivity analysis for silver price, Post-Tax NPV (5%) of $1,054 million and 50% IRR at US$27/oz silver and a Post-Tax NPV (5%) of $398 million and 26% IRR at US$18/oz silver

Large-scale, long mine life asset – 14-year mine life producing approximately 171 million ounces total payable silver metal

Annual payable metal production exceeds 15 million ounces of silver in years one through four, with life-of-mine (“LOM”) average annual payable metal production exceeding 12 million ounces of silver

High-margin operation – Average LOM operating cash cost of $8.45/oz and total all-in sustaining cost of $10.42/oz silver

Low capital intensity – Initial capital costs of $308 million, which includes $52 million in contingency costs; LOM sustaining capital costs total $20 million

1. LOM average
2. Includes mine operating costs, milling, tails management, mine closure and mine G&A
3. Includes operating costs, initial capital costs and sustaining capital costs

Silver Sand Project NPV (US$M) / IRR (%) Economic Sensitivity Analysis – Post Tax Note: The above table lists sensitivity analysis for four “Input” variables. For example, if Capex (LOM) increase by 20% (+20%), while Silver price (US$/oz), Mine operating cost (per tonne mined) and Process operating cost (per tonne milled) remain the same as the “base Case” input, then the NPV becomes $676 M and IRR is 33%. If Silver drops 20% while other Inputs remain as the “Base case”, then the NPV becomes $398 M and IRR is 26%.

Total Capital Cost Estimate

Note: Total capital cost items include direct, indirect and contingency costs. Totals may not add up exactly due to rounding.

Total Operating Cost Estimate

AMC Mining Consultants (Canada) Ltd. (mineral resource, mining, infrastructure and financial analysis) was contracted to conduct the PEA in cooperation with Halyard Inc. (metallurgy and processing), and NewFields Canada Mining & Environment ULC (tailings, water and waste management). The PEA is based on the updated Mineral Resource estimate which was reported on November 28, 2022.

For further discussion of the PEA results, see the Silver Sand Preliminary Economic Assessment NI 43-101 Technical Report filed on February 16, 2023.

Cautionary Note: The Mineral Resource estimate included in the Preliminary Economic Assessment (“Study” or “PEA”) is reported according to the classification criteria set out in the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards for Mineral Resources and Reserves (“CIM Definition Standards”). These standards are internationally recognized and allow the reader to compare the Mineral Resource with that reported for similar projects. Readers are cautioned that the PEA is preliminary in nature and is intended to provide an initial assessment of the project’s economic potential and development options. The PEA mine schedule and economic assessment includes numerous assumptions and is based on both Indicated and Inferred Mineral Resources. Inferred Resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA results will be realized. The estimate of mineral resources may be materially affected by geology , environmental, permitting, legal, title, socio-political, marketing or other relevant issues. Mineral resources are not mineral reserves and do not have demonstrated economic viability. Additional exploration will be required to potentially upgrade the classification of the Inferred Mineral Resources to be considered in future advanced studies.

The PEA is based on the updated Mineral Resource Estimate which was reported on November 28, 2022. The effective date of the 2022 Mineral Resource Estimate for Silver Sand is 31 October 2022. The cut-off applied for reporting the pit-constrained Mineral Resources is 30 g/t silver. Assumptions made to derive a cut-off grade included mining costs, processing costs and recoveries and were obtained from comparable industry situations. The model is depleted for historical mining activities. Mineral Resources are constrained by optimized pit shells at a silver price of US$22.50 per ounce, silver metallurgical recovery of 91%, silver payability of 99%, open pit mining cost of US$2.6/t, processing cost of US$16/t, G&A cost of US$2/t, and slope angle of 44-47 degrees. Key assumptions used for pit optimization for the PEA mining pit include silver price of US$22.50 per ounce, silver metallurgical recovery of 91%, silver payability of 99%, open pit mining cost of US$2.6/t, incremental mining cost of US$0.04/t (per 10 m bench), processing cost of US$16/t, tailing storage facility operating cost of US$0.7/t, G&A cost of US$2/t, royalty of 6.00%, mining recovery of 92%, dilution of 8%, and cut-off grade of 30 g/t silver.

Location and Access

The flagship Silver Sand Project is located ~35 km northeast of the world-class Cerro Rico silver and base metal mineral system near Potosi in southwest Bolivia.

The 5.42 km² Property sits in the Eastern Cordillera at an elevation of ~4,050 metres above sea level and consists of:

• The 3.17 km² Silver Sand “Administrative Mining Contract” (AMC) concession hosting the core Silver Sand Deposit, and

• The Jisas, Jardan and El Bronce concessions comprising the North Block

The Property is accessible from Potosi via a 54 km long road made up of a 27 km stretch of the paved Bolivia National Highway 5 and an all-season gravel road built for mining in the Colavi District.

Mineral Concessions & Ownership

The Ministry of Mines and Metallurgy grants exploration and mining rights in Bolivia through the Autoridad Jurisdiccional Administrativa Minera (AJAM). Under the 2014 and 2016 Bolivia Mining Laws, tenure is granted as either an exploration license for early-stage projects or an AMC for development-stage projects. Tenure held under the previous “historic” legislation was converted to Temporary Special Authorizations (ATEs), formerly known as “mining concessions”; these ATEs are required to be consolidated to new 25-hectare sized cuadriculas and then converted to AMCs. AMCs created by conversion recognize existing rights of exploration, exploitation, and development, including treatment, foundry refining/smelting, and trading. AMCs have a fixed term of 30 years and can be extended for a further 30 years if certain conditions are met. Each AMC requires ongoing work and the submission of technical work plans to AJAM.

The AMC for the Silver Sand Project, which hosts the Silver Sand deposit, covers an area of 3.17 km². The total area under full control of the Company will be 5.42 km² after completing the consolidation and conversion procedures for the North Block, which is comprised of three ATEs (Jisas, Jardan and El Bronce).

History, Geology, Mineralization

One of Bolivia’s earliest mineral discoveries, Silver Sand was discovered even before Cerro Rico in the mid-1500’s. Silver was mined in the core area by Spanish colonial settlers from the early 16th century through the 19th century; subsequently, tin was extracted from the adjacent Colavi and Canutillos mines during the Tin Baron period until the collapse of tin prices in 1985. Numerous small mine workings, artisanal mining dumps, and abandoned miners’ villages are scattered across the Property.

Bedrock in the Property area mainly consists of Cretaceous sedimentary units, including the lower La Puerta Formation and the upper Tarapaya Formation. The La Puerta Formation consists of sandstones unconformably overlying highly folded Paleozoic marine sedimentary rocks. The Tarapaya Formation conformably overlies the La Puerta sandstones in the central part of the Property and comprises siltstones and mudstones intercalated with minor sandstone. Both the Cretaceous and Paleozoic sedimentary sequences are intruded by numerous small Miocene subvolcanic dacitic porphyry intrusions.

Silver mineralization is hosted by faults, fractures, fissures, and crackle breccia zones in the Cretaceous La Puerta brittle sandstone and porphyritic dacitic dikes, laccolith, and stocks. Open spaces in mineralized sandstone are filled with silver-bearing sulphosalts and sulphides, occurring as sheeted veins, stockworks, and veinlets, as well as breccia fillings and minor disseminations. Most silver mineralization at Silver Sand is structurally controlled, with intensity depending on the density of various mineralized vein structures developed in the brittle host rocks.

The most common silver-bearing minerals include freibergite, miargyrite, polybasite, bournonite, andorite and boulangerite. The mineralized zones have been irregularly oxidized, which, in some areas, can result in significant mixed oxide and sulphide zones due to the strong local influence of sub-vertical fractures. Oxide minerals are dominated by jarosite, goethite and minor hematite, resulting in pervasive staining within sandstones and pseudomorphing of sulphide minerals within veins. A total of ten mineralized prospects have been identified across the Property to date, including the Silver Sand deposit and the El Fuerte, Snake Hole, North Plain, San Antonio, Esperanza, Jisas, El Bronce, Mascota, and Aullagas occurrences.

Four mineralization types have been recognized in the Property, including (1) sandstone-hosted silver mineralization, (2) dacitic porphyry-hosted silver mineralization, (3) hydrothermal breccia-hosted silver mineralization, and (4) manto-type tin and base metal mineralization. The first three mineralization types are considered to have been developed in an epithermal environment during the late stage of the Cenozoic orogenic movement in the Eastern Cordillera. They are typical of the Bolivian polymetallic vein-type deposits represented by the giant Cerro Rico de Potosí silver mine in Potosí. The manto-type tin and base metal mineralization was formed by metosomatic replacement associated with a mesothermal environment during the early stage of the Cenozoic orogenic event.

The scientific and technical information contained herein has been reviewed and approved by Alex Zhang, P. Geo., Vice President of Exploration, who is a Qualified Person for the purposes of National Instrument 43-101 — Standards of Disclosure for Mineral Projects (“NI 43-101”). The Qualified Person has verified the information disclosed herein using standard verification processes, including the sampling, preparation, security and analytical procedures underlying such information, and is not aware of any significant risks and uncertainties or any limitations on the verification process that could be expected to affect the reliability or confidence in the information discussed herein.

Please see the NI 43-101 Technical Report titled “Silver Sand Deposit Mineral Resource Report (Amended)”, with a January 16, 2020 effective date and a June 3, 2020 amended date for details.

Mineral Resource Estimate, Technical Highlights, Catalysts

On November 28, 2022, the Company released an updated NI 43-101 Mineral Resource estimate (MRE) for the Silver Sand Project (effective October 31, 2022), superseding the project’s inaugural MRE tabled on April 14, 2020 (effective December 31, 2019).

Notes:   

• 2022 NI 43-101 Mineral Resource Estimates for the Silver Sand Project as of 31 October 2022
• Readers are cautioned that mineral resources are not economic mineral reserves and that the economic viability of resources that are not mineral reserves has not been demonstrated. The estimate of mineral resources may be materially affected by geology, environmental, permitting, legal, title, socio‐ political, marketing or other relevant issues. The mineral resource estimate is classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum’s “CIM Definition Standards on Mineral Resources and Mineral Reserves” incorporated by reference into NI 43‐101. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre‐feasibility studies or economic studies except for Preliminary Assessment as defined under NI 43‐101. Readers are cautioned not to assume that further work on the stated resources will lead to mineral reserves that can be mined economically
• Mineral Resources are constrained by optimized pit shells at a metal price of US$22.50/oz Ag, recovery of 91% Ag, payable Ag = 99% (Drilling results up to 25 July 2022)
• Assumptions for pit optimization: Mining Cost = US$2.6/t mined; Processing Cost = US$16/t; G&A Cost = US$2/t; Slope Angle = 44-47 degrees
• Both MREs were completed by AMC Mining Consultants (Canada) Ltd
• See the Company’s October 28, 2022, and January 9, 2023, news releases for further information. Alex Zhang, P.Geo, Vice President of Exploration, New Pacific Metals Corp, is the Company’s designated Qualified Person within the meaning of National Instrument 43-101 Standards of Disclosure for Mineral Projects and has reviewed and approved that the information contained herein is accurate

Technical Highlights:

• Detailed drilling indicates good mineral continuity to provide high confidence – lower technical risk. Measured & Indicated Mineral Resources of 54.26 Mt @ 116 g/t Ag for 201.77 Moz or 94% of the total estimate.
• Mineralization starts at or near the surface and is amenable to potential open-pit mining extraction—approximately 95% of the Mineral Resources are within 200 m of the conceptual open pit surface.
• Mineralization remains open on strike to the North and South and at depth. No feeder zones or source intrusions have been discovered to date. The Company classifies the exploration potential as good to excellent.
• Favorable initial metallurgical test work indicates laboratory‐based recoveries of up to 97% for the various oxide – transition and sulphide mineral domains (see news release dated 23 August 2019 for details). More detailed metallurgy testwork is being carried out to facilitate future design of processing plant.
• In addition to the currently reported Mineral Resources, there are numerous known satellite mineral occurrences in the district of six kilometers long by two and half kilometers wide. These mineral occurrences demonstrate similar mineralization style and grades to Silver Sand, subjected to extensive artisanal mining starting from Spanish colonial time and bore little modern exploration. The Company believes these satellite occurrences have good resource potential.

Cautionary Note: The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that the conclusions or results as reported in the PEA will be realized.

The PEA is based on the updated Mineral Resource Estimate which was reported on November 28, 2022. The effective date of the 2022 Mineral Resource Estimate for Silver Sand is 31 October 2022. The cut-off applied for reporting the pit-constrained Mineral Resources is 30 g/t silver. Assumptions made to derive a cut-off grade included mining costs, processing costs and recoveries and were obtained from comparable industry situations. The model is depleted for historical mining activities. Mineral Resources are constrained by optimized pit shells at a silver price of US$22.50 per ounce, silver metallurgical recovery of 91%, silver payability of 99%, open pit mining cost of US$2.6/t, processing cost of US$16/t, G&A cost of US$2/t, and slope angle of 44-47 degrees. Key assumptions used for pit optimization for the PEA mining pit include silver price of US$22.50 per ounce, silver metallurgical recovery of 91%, silver payability of 99%, open pit mining cost of US$2.6/t, incremental mining cost of US$0.04/t (per 10 m bench), processing cost of US$16/t, tailing storage facility operating cost of US$0.7/t, G&A cost of US$2/t, royalty of 6.00%, mining recovery of 92%, dilution of 8%, and cut-off grade of 30 g/t silver.

The 2022 Mineral Resource Estimate was completed by AMC Mining Consultants (Canada) Ltd. (“AMC Consultants” or “AMC”), and the Qualified Person (“QP”) is Dinara Nussipakynova, P.Geo. of AMC Consultants. The QP, Dinara Nussipakynova, P.Geo. considers sample preparation, analytical, and security protocols employed by New Pacific to be acceptable. The QP has reviewed the quality assurance and quality control procedures used by New Pacific including the use of certified reference materials, blank, duplicate, and umpire data, and considers the assay database to be adequate for Mineral Resource estimation. The QP also carried out data verification both on site and on the database. This included a review of the assay database and collar locations. The QP considers the assay database to be acceptable for Mineral Resource estimation. These are mineral resources not mineral reserves as they do not have demonstrated economic viability. Results are presented in situ. Ounce (troy) = metric tonnes x grade / 31.103475. Calculations used metric units (meters, tonnes, g/t). Any discrepancies in the totals are due to rounding effects. The 2022 Mineral Resource Estimate is based on a geological model that included assay results received by New Pacific for the Silver Sand deposit to 25 July 2022. Mineralization wireframes were constructed by New Pacific with LeapFrog© software. The 131 domains were reviewed by the QP and were accepted for estimation purposes. Over 82% of the volume was contained in the two largest domains. AMC completed an ordinary kriging (“OK”) estimate on the four largest domains and inverse distance squared (“ID2”) was used in the other domains. Prior to estimation, drillhole data were composited to an average of 1.2 m samples and were capped for all variables within each domain where required. Capping value for silver was 2,000 g/t Ag for all domains. In addition to the estimate completed inside the domains, a background OK estimate was also completed outside of mineralization wireframes. For the mineralized domains the parent block size was 2.5 mE x 5 mN x 2.5 mRL with sub‐blocking employed. Sub‐blocking resulted in minimum cell dimensions of 1.25 mE x 0.5 mN x 1.25 mRL. The background mineralization (outside the mineralization domains) was estimated with a parent block dimension of 5 mE x 10 mN x 5 mRL. As mineralization is hosted in one rock type, the QP assigned bulk density measurements to the block model based on the mean bulk density. Density values of 2.54 tonnes/m3 was assigned to both blocks inside and outside of the mineralized domains. Mineral Resource classification was completed using an assessment of geological and mineralization continuity, data quality and data density. Estimation passes were used as an initial guide for classification. Wireframes were then generated manually to build coherent volumes for the different classes. The block model was classified as Measured, Indicated, and Inferred Mineral Resources as appropriate.

Qualified Persons

The Mineral Resource Estimate and data verification was completed by Ms Dinara Nussipakynova, P.Geo., Principal Geologist with AMC Consultants who is the QP for the purpose of NI 43‐101 for all technical information pertaining to the current Mineral Resource. New Pacific’s quality assurance and quality control program was reviewed by the QP who has also reviewed the technical content of this news release for the Silver Sand deposit and have approved its dissemination.

Further details supporting the geological model, estimation procedure and metallurgical testwork will be available in an NI 43‐101 Technical Report disclosing the results of the PEA which will be posted under the Company’s profile at www.sedar.com in early 2023.

The scientific and technical information contained herein has been reviewed and approved by Alex Zhang, P. Geo., Vice President of Exploration, who is a Qualified Person for the purposes of National Instrument 43-101 — Standards of Disclosure for Mineral Projects (“NI 43-101”). The Qualified Person has verified the information disclosed herein using standard verification processes, including the sampling, preparation, security and analytical procedures underlying such information, and is not aware of any significant risks and uncertainties or any limitations on the verification process that could be expected to affect the reliability or confidence in the information discussed herein.

Upcoming Catalysts:

• Exploration drill results from the North Block and other high-priority prospects in the district.
• Environmental permitting activities at Silver Sand (ongoing)
• Silver Sand Pre-Feasibility Study by the end of 2023

Exploration Potential at Silver Sand

Silver Sand North Blocks (El Bronce, Jardan, Jisas)

The North Block occurs across Cretaceous sandstone terrains and the Eastern Intrusive Trend at district scale. The geology of the North Block differs considerably from that of Silver Sand as it contains both sandstone units and dacitic intrusive rocks. Notably, the El Bronce property contains numerous historic mine workings that exploited both steeply dipping and flat-lying, high-grade, silver-rich polymetallic veins over an area approximately 500 m wide by 1 km long in strike. Detailed geological mapping indicates that the intrusive host rocks are pervasively flooded by moderate to intense alteration, reflecting the passage of silver-rich hydrothermal fluids (phylic alteration (sericite) with local argillic (kaolinite) and propylitic (chlorite-epidote) zones). Surface mapping has also identified good to moderate micro-veining and stockwork development between the principal historically exploited structures, thereby forming an attractive bulk tonnage target. In contrast to El Bronce, the mineralization of Jisas is hosted in numerous open fractures developed in bleached Cretaceous quartz sandstones, similar to that of the Silver Sand core area. Jisas has seen small-scale underground mining before its acquisition by the Company. Chip samples from surface outcrops and underground workings as well as grab samples from mining dumps taken by the Company returned silver grades ranging from tens of grams up to nine hundred grams per ton.

Importantly, the geology, alteration, and style of existing silver mineralization at the North Block provide compelling evidence that the Silver Sand deposit forms part of a larger regional to district-scale, silver-rich, hydrothermal system or systems whose exploration potential remains to be unlocked.

New Pacific recently commenced a 5,000 m drill campaign at both Jisas and El Bronce prospects. Drill results will be released once available.

Snake Hole

The Snake Hole prospect is located approximately 600 metres east of the core area of the Silver Sand Project and consists of artisanal underground workings on structures that trend NNW-SSE. The workings and associated surface mine dumps were started in the Spanish colonial era and have continued sporadically to recent times. Developed in altered (bleached) quartz sandstones, the workings are traceable over more than 1,000 metres strike length with widths varying from a few metres up to 100 metres. Geochemical sampling of the workings and mine dumps returned encouraging results, typically ranging from 100g/t Ag to 300g/t Ag.

Surface mapping suggests that the mineralized fracture zone remains open to the north, where it potentially trends undercover towards the Company’s Jisas prospect located approximately two kilometres to the northwest.

Exploration drilling commenced in late August 2019 and a total of 24 drill holes (~6,000 m) were completed by December 2019. This initial campaign drill tested ~750 metres of the structural zone. Drilling intersected silver mineralization consisting of coarse-grained sulfosalts (freibergite) in fractures of bleached sandstones with associated disseminated pyrite. Grade and thickness of mineralization increase to the north.

During the first quarter of 2020, the Company completed eight additional holes (~1,600 m) at the Snake Hole prospect, aiming to confirm the continuity of silver mineralization and continuing to explore the >1,000 m mineralized trend. Seven of the eight holes intersected structurally controlled silver mineralization. Drill results confirm the continuity of silver mineralization between the holes on section 52, where the initial discovery at Snake Hole was made in 2019.

Drill highlights are as follows:

• DSS5218 – 72.44 m @ 279 g/t Ag from 60.5 m to 132.94 m, including 32.96 m @ 517 g/t Ag from 84.95 m to 117.9 m.

• DSS525020 – 38.4 m @ 143 g/t Ag from 29.9 m to 68.3 m, including 6.2 m @ 749 g/t Ag from 36.8 m to 43.0 m.

• DSS5217 – 11.12 m @ 761 g/t Ag from 149.48 m to 160 m.

• DSS5228 – 39.39 m @ 126 g/t Ag from 57.91 m to 97.30 m, including 12.26 m @ 354 g/t Ag from 78.33 m to 90.59 m.

• DSS5228 – 39.39 m @ 126 g/t Ag from 57.91 m to 97.30 m, including 12.26 m @ 354 g/t Ag from 78.33 m to 90.59 m.

• DSS525022– 16.53 m @ 107 g/t Ag from 137.50 m to 154.03 m, including 7.80 m @ 216 g/t Ag from 137.50 m to 145.30 m.

The scientific and technical information contained herein has been reviewed and approved by Alex Zhang, P. Geo., Vice President of Exploration, who is a Qualified Person for the purposes of National Instrument 43-101 — Standards of Disclosure for Mineral Projects (“NI 43-101”). The Qualified Person has verified the information disclosed herein using standard verification processes, including the sampling, preparation, security and analytical procedures underlying such information, and is not aware of any significant risks and uncertainties or any limitations on the verification process that could be expected to affect the reliability or confidence in the information discussed herein.

Please see the full text of New Pacific Metals Corp. news releases dated June 7, 2022, and August 6, 2020, and NI 43-101 Technical Report titled “Silver Sand Deposit Mineral Resource Report (Amended)”, with a January 16, 2020 effective date and a June 3, 2020 amended date for details.