When it comes to silver developers in the junior mining space, few names spark as much debate as New Pacific Metals ($NUAG). Backed by strong insider ownership, no debt, and two significant silver projects, NUAG presents a compelling upside story — if you can stomach the jurisdiction risk.
Let’s break down the potential using a full fair value analysis.
The Developer Story: Two High-Quality Projects
New Pacific Metals sits firmly in the “Developer” category, advancing two cornerstone assets:
- Silver Sand (PFS Complete)
- Carangas (PEA Complete)
Both projects are located in Bolivia, a jurisdiction known for its mineral wealth but also significant political risk, which we’ll touch on later.
The combined Net Asset Value (NAV) of these projects is an impressive CAD $1.241 billion, compared to the company’s current Enterprise Value (EV) of just CAD $244.64 million. That’s a striking 80.3% discount to NAV. They also own another exploration project called Silverstrike in Bolivia.
NAV vs. EV Snapshot
Silversand: (NAV Estimate = $740M) (CAPEX = $358M)
Carangas: (NAV Estimate = $501M) (CAPEX = $324M)
At first glance, this screams deep value, but let’s go deeper.
The NAV estimates for both Silver Sand and Carangas are based on a silver price of around $24/oz, which is relatively conservative given the long-term outlook for silver.
- Silver Sand NAV: ~$740M
- Carangas NAV: ~$501M
→ Total NAV: ~$1.241B CAD at $24/oz silver
What does this mean?
It means the project value models (from the company’s PFS and PEA) assume that the silver price remains stable at ~$24/oz over the life of the mine. Importantly, this price assumption is not aggressive, and arguably even cautious in today’s macro environment.
If silver prices push above $30/oz, New Pacific Metals becomes exceptionally attractive because both Silver Sand and Carangas are designed as low-cost, high-margin projects. With estimated all-in sustaining costs (AISC) around $12–13/oz, higher silver prices flow almost directly to the bottom line, massively boosting project NAVs. At $30+ silver, the company’s NAV could increase by 35–40%, unlocking a potential 4x upside or more from today’s share price. In a silver bull market, NUAG transforms from an undervalued developer into a high-torque growth play.
Adjusting for Risks: A Realistic View
Before we start dreaming of multi-baggers, it’s crucial to apply rational adjustments. Bolivia’s history of nationalization and policy unpredictability forces a discount. Permitting delays add another layer of uncertainty.
Here’s how the risks weigh in:
Permitting (pending) = High Risk Level (-25% NAV)
Jurisdiction (Bolivia) = High Risk Level (-20% NAV)
Diversification (2 projects) = Positive (+5% NAV)
Insider Ownership (46.37%) = Positive (+10% NAV)
Adjusted NAV Calculation:
$1.241B × (1 – 0.25 – 0.20 + 0.05 + 0.10) = $868.7M
This adjustment brings realism into the valuation, accounting for both risks and positives in the company’s profile.
Implied Fair Value: Significant Upside
With the adjusted NAV of $868.7 million, what does this mean for shareholders?
- Shares Outstanding: 171.64M
- Implied Fair Value/Share:
$868.7M ÷ 171.64M = ~$5.06 per share
Compare this to today’s market price of around $1.80/share, and you’re looking at a potential 181% upside — if New Pacific executes on its strategy.
Final Thoughts: Risk vs. Reward
New Pacific Metals ($NUAG) is a textbook case of “high risk, high reward.”
On one hand, you have:
- Two advanced silver projects with robust NAV.
- High insider ownership showing strong internal conviction.
- No current debt and minimal dilution risk.
On the other:
- Bolivia’s unpredictable politics and regulatory environment.
- Pending permitting that is absolutely critical for any rerating.
- No current cash flow to support near-term valuation improvements.
If management can navigate permitting hurdles and geopolitical challenges, New Pacific Metals could rerate by 3x or more from today’s levels. For patient, risk-tolerant investors, NUAG represents an asymmetric bet with substantial upside potential.
However, it’s not for the faint of heart. Until permits are in hand, the market will continue to price in these uncertainties.
Watch this space closely.
Daily Miner 