New Pacific Metals Corp.

 

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New Pacific Plans Work for Its Newly Acquired, 100% Owned Tagish Lake Gold Property, Yukon Territory, Canada

Vancouver, British Columbia (January 5, 2011) - New Pacific Metals Corp. ("New Pacific", TSXV: NUX) is pleased to announce it has completed the acquisition of the 100% interest in Tagish Lake Gold Corp. through a court-approved plan of arrangement under the Business Corporations Act of British Columbia. Henceforth, Tagish Lake Gold Corp. (“Tagishâ€) will operate as a wholly owned subsidiary of New Pacific. Tagish's main asset is the Skukum Gold Project (renamed the “Tagish Lake Gold Property†or "the Property"), which comprises 982 mining claims covering a 178 square kilometre area located approximately 80 kilometres by road south of Whitehorse, Yukon Territory, Canada.

History of Tagish Lake Gold Property

The Tagish Lake Gold Property was discovered more than 100 years ago and was owned and operated by various companies before 2000. In December 2000, Tagish Lake Gold Corp. was formed through a court-approved amalgamation of Omni Resources Inc. and Trumpeter Yukon Gold Inc., with the amalgamated property conforming to the current area of the Tagish Lake Gold Property.

Substantial surface and subsurface exploration of the Property has identified three mineral deposits (projects): the Mt. Skukum (past gold producer), Skukum Creek (gold-silver) and Goddell (gold) projects. In a NI 43-101 technical report dated August 1, 2001, C. Naas, P. Geo. (CME Consulting Ltd.; the "2001 Technical Report") documented a minimum of 113,446 metres of surface and underground drilling in 806 holes drilled from 1977 to 2001 and concentrated in the Mt. Skukum, Skukum Creek and Goddell project areas.

From September 2001, Tagish completed an additional 13,738 metres of surface and underground drilling in 126 holes at the Skukum Creek Project and 1,874 metres of surface drilling in four drill holes at the Goddell Project, bringing the total amount of surface and underground drilling to 129,059 metres in 936 drill holes. A total of 4,830 metres of underground workings were also developed to provide access to mineral resources at the Skukum Creek and Goddell projects. From the total 129,059 metres of drilling, 87,423 metres of surface and underground diamond drilling in 604 holes (Goddell Project: 22,925 metres of drilling and 780 metre decline; Skukum Creek Project: 44,694 metres drilling and 4,050 metre drifting and decline; and Mt. Skukum Project and many other veins: 19,804 metres drilling and 685 metres drifting on Lake Zones) have been digitized and modeled by NI 43-101 qualified consultants employed by Tagish.

Drill results to August 2001 for the Lake Veins at Mt. Skukum, Skukum Creek and Goddell projects were incorporated into the NI 43-101 resource estimate contained in the 2001 Technical Report (CME Consulting Ltd., 2001; filed by Tagish on SEDAR May 7, 2002). Subsequently, two additional NI 43-101 resource estimate reports for Skukum Creek and Goddell projects were prepared by MineTech International Limited and filed by Tagish in 2003 and 2007. The Table 1 lists the NI 43-101 gold resources of the Tagish Lake Gold Property based on the resource estimates contained in the 2001, 2003, and 2007 technical reports. The resources in all three projects are open down dip and along strike.

Table 1: NI 43-101 Resources of Tagish Lake Gold Property (including Lake Veins at Mt. Skukum, Goddell and Skukum Creek projects; gold cut-off grade >4 g/t).

Resource Category
Tonnes
Gold (g/t)
Silver (g/t)
Gold Equivalent (oz)
Measured
195,000
5.8
240
66,456
Indicated
1,357,200
8.1
114
451,187
Measure + Indicated
1,552,200
7.8
130
517,463
Inferred
570,000
7.9
71
170,798






Gold Equivalent (oz) was calculated based on gold/silver ratio of 50/1; undiluted.

In addition to the three known deposits, historical reports document numerous soil gold geochemical anomalies, gold showings, gold zones, or gold outcrops within the Property, with several yielding significant results that have not yet been followed up by systematic exploration or drilling. One example is the Raca Zone located 300 metres east of the Skukum Creek deposit. At the Raca Zone, drill hole Raca 97-1 intercepted a 2.81 metre interval grading 3.21 g/t gold and 628 g/t silver. Nearby, drill hole 85-22 intercepted a 3.82 metre interval grading 0.8 g/t gold and 413 g/t silver on the Polaris Vein (2001 Technical Report). No exploration has been carried out on the veins since 1997. At the Charleston Project located about 2.3 kilometres west of the Skukum Creek deposit, surface mapping, geochemical surveying, and trenching by Tagish and other previous operators have revealed a multi-vein system with anomalous gold-silver zones extending over a strike length of 4 kilometres, including a channel sample grading 205.83 g/t gold and 213 g/t silver over a 2.05 metre interval (2001 Technical Report). To date, the Charleston Project has not been drilled.

Historical gold production from the Tagish Lake Gold Property was 77,796 ounces of gold from 223,439 tons (202,701 tonnes) of ore produced from the Main Cirque Vein at the Mt. Skukum Mine, which operated from February 1986 to August 1988. In addition to the access roads and underground workings at the Mt. Skukum, Skukum Creek and Goddell projects, site infrastructure at the Tagish Lake Gold Property includes a 300 tonne per day mill, a tailings reclamation site, a service building and camp facilities. An assessment of the existing mining and site infrastructure will be undertaken as part of the 2011 work plan.

Between 2001 and 2007, a number of metallurgical studies were completed on the materials from the Skukum Creek deposit by different Canadian laboratories. Based on the CANTEST (2007) flotation test report, with grinding to 60.6% passing minus 200 mesh and a simple one-stage flotation circuit, the gold-silver ores from the Skukum Creek Project can produce a saleable gold-silver concentrate with 95.5% gold recovery and 88.6% silver recovery.

EXPLORATION AND DEVELOPMENT PLAN FOR 2011

New Pacific plans to perform the following tasks in 2011:

1) prepare and submit a new mining permit application utilizing the existing mill facility, including carrying out environmental and feasibility studies;
2) review, digitize and re-evaluate the vast amount of historical exploration and drilling data to generate new geological models and to identify and prioritize new drilling targets;
3) re-check mineralization showings, outcrops, soil geochemical and geophysical anomalies as documented in the historical reports for the Property;
4) carry out new soil geochemical, airborne and ground geophysical surveys;
5) conduct underground drilling at the Skukum Creek and Goddell projects; and
6) conduct surface drilling of other high priority targets.

New Pacific has assembled a core team of professionals to carry out these tasks and objectives. Financially, New Pacific is well positioned to achieve its goal of initial limited production while carrying out extensive exploration to grow the resources at the Tagish Lake Gold Property. New Pacific has just completed a $24 million private placement financing. Also it expects to receive approximately $23 million net proceeds (net of government tax and costs) over the next 20 months from the disposal of its China assets.

About New Pacific Metals Corp.

New Pacific is engaged in the exploration and development of mineral resources in Canada and China. 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 projects into production with sufficient initial resources, but before the full resource potential of the properties are defined, so that later exploration and potential development costs can be funded from the cash flows generated from early operations.


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

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