“New Pacific Metals (TSE:NUAG) is a little bit unique,” says chief executive Dr. Mark Cruise.

“As a primary silver exploration company focused exclusively on Bolivia, we feel we are undervalued.”

Make no mistake: this is no tinpot explorer scrabbling around on the edges of known geology for whatever titbits and leftovers it can find.

On the contrary, for an exploration company, New Pacific is the epitome of a fast-track to success silver explorer. In terms of market capitalisation it’s already outstripped some of its more advanced peers.

Why is this?

The simple answer is the size of its flagship project, Silver Sand, Bolivia.

As it stands, Silver Sand already boasts a measured and indicated resource of 156mln ounces of silver grading 140 grams per tonne, with a further 35mln ounces inferred. Approximately 70 per cent of the resources are within 200 metres of the conceptual open pit surface. Furthermore, Silver Sand very much remains open for expansion as New Pacific has recently discovered a new zone of high- grade silver, Snake Hole, to the east of the currently defined Silver Sand deposit. 

That’s enough, reckons Cruise, to support a mine which stands to make a significant impact on the silver space. The largest primary silver producer in the world produces 54mln ounces of silver from seven mines in one year.

“Subject to ongoing advanced studies the Silver Sand project has the potential to produce a significant amount of silver on an annual basis. The deposit is one of the largest new global silver discoveries in the last decade and the largest Bolivian silver discovery since the mid-1900s,” he says.

Given the potential scale of the project and recognizing that the current and future studies will provide clarity on the parameters of the actual mine, it goes a long way towards explaining why the company was able to raise C$25mln in its most recent bought deal financing.

What’s more, that money was raised in June, before the recent further uplift in silver prices, so we are not talking speculative froth here – there’s no doubt the appetite was already there amongst professional investors.

A quick look at  New Pacific’s share register reveals the presence of two of the most serious silver mining companies around: Silvercorp Metals (TSE:SVM), the Chinese-focused silver specialist, and Pan American Silver (TSE:PAAS), the world’s largest silver producer and North America’s leading silver champion which also, not by coincidence, operates the San Vicente mine in Bolivia.

New Pacific is big, it is well supported both in the financial markets and in the silver mining sector, and is clearly building up real momentum.

But where exactly is it going?

There are two ways to answer that question.

The first is that the company has effectively got first-mover advantage status in Bolivia, a jurisdiction which Cruise describes as having similar characteristics to Ecuador most recently or Peru 20-30 years ago, in terms of its resource-rich potential to revive and develop a significant mining industry.

New Pacific is already set off down the path of finding and working up new projects in Bolivia – the Silverstrike project is the most notable of the finds so far, an analog to Silver Sand – but  teams are still hard at work, looking for more.

With Silverstrike comparable to Silver Sand pre-discovery drilling, upside exploration at Silver Sand and potential for more in other regions of Bolivia, it’s easy to conceive New Pacific growing several orders of magnitude larger than it already is.

Which brings us back to Silver Sand itself.

Currently New Pacific is advancing the project through the preliminary economic assessment phase, and the results of that work will be available by the first half of next year. That is not to say that it is now drilled off – on the contrary it remains open in several directions. But there is enough resource now proved up to acceptable levels of certainty to begin to draw the parameters around it to justify Silver Sand as a “tier-one” deposit.

“We take a best-in-class approach in everything we do,” says Cruise.

“We want to make sure we de-risk it at every level.”

Just how good will Silver Sand eventually get?

It remains to be seen.

But the grade is good, the vast bulk of the resource itself is near surface, the metallurgy looks good, the Potosi region of Bolivia has a track record of mining that goes back beyond recorded history, and the company has a team of professionals with records that stand second-to-none in terms of mine development.

“We do know that Silver Sand is a very large silver-bearing system,” says Cruise.

“We’re planning to complete up to 25,000 metres of diamond drilling on the deposit in the second half of the year, and we estimate that there is potential for an additional  ten to fifteen million tonnes at broadly similar grades.”.”

What’s more, he adds, there’s another attractive silver-bearing system four kilometres to the north called El Bronce, and this could be one of many more spokes that get added on to the hub that is Silver Sand.

“Anything within truck-able distance doesn’t have to be standalone,” says Cruise.

It’s a recipe that’s likely to keep production at Silver Sand going for many long years to come, once it gets up and running, and explains why other major companies and big banks are so interested.

Having Silvercorp and Pan American as major shareholders is, says Cruise, “a big vote of confidence” in the project. But it also provides options for New Pacific going forward. If an offer comes in, then that of course will be a matter for their shareholders. But there are other ways major companies can join forces to work up sizeable projects too, and Cruise is impressed with the working practices and cultures he sees at Silvercorp and Pan American.

“I’d like to think that by late 2022 to early 2023 we’ll be making a decision on whether to break ground in 2023 or 2024,” says Cruise. In the meantime, there will be plenty of newsflow, as work on the PEA progresses, metallurgy results come in, the resource upgrade continues, and wider exploration work begins to deliver a clearer idea of the regional potential.