New Pacific Metals Corp.

 

RZY Project

Introduction

New Pacific Metals Corp. (“New Pacific” or the “Company”) acquired the RZY early stage silver-lead-zinc project in April 2013. Located in Qinghai Province, China, approximately 237 kilometres via paved and gravel roads from the capital city of Yushu, Tibetan Autonomous Prefecture, the Project is situated on a high plateau with an average elevation of 5,000 metres above sea level. 

Ownership

New Pacific owns 100% of Fortress Mining Inc. (“FMI”), a private company. The Project is FMI’s primary asset. The Company made an initial payment of US$3.5 million to acquire FMI from Silvercorp Metals Inc. (“Silvercorp”), less 20% of its participating interest in the project. Pursuant to the terms of the agreement New Pacific had an option to acquire the remaining 20% participating interest within two years for an additional payment of US$5 million, but such option has since lapsed. Please see our news release dated December 21, 2012 and April 8, 2013 for further information about the transaction.

History

In 2007 FMI and the Qinghai Geological Survey Institute (“QGSI”) established a Sino-Foreign Co-Operative Company; Qinghai Found Mining (“QFM”), with a term of 30 years.  FMI owns an 82% interest and QGSI owns an 18% carried interest in QFM.  Currently, QFM’s assets consist of approximately US$2.0 million in net cash and a 67% interest in the Project.  In April 2011, QFM entered into an exploration agreement with its shareholder, QGSI to jointly explore the Project.  To date, FMI has invested US$3.5 million in QFM and QFM has spent US$1.5 million on exploration and development expenditures on the Project. 

Known mineralization of the Project is silver-lead-zinc veins controlled by altered structure zones developed in the lower Permian marine clastic sediments. Multiple silver-lead-zinc mineralized zones hosted in an altered structure zone with a strike extent of 6.5 kilometres and width of 25 to 100 metres have been identified by historical surface work conducted by QGSI including trenching, pitting, geology mapping and geophysics surveying. The geochemical profile indicated that the silver-lead-zinc mineralization is likely in situ and not floats of dispersion from sources in the surrounding mountainous area. The soil geochemical anomaly also indicated there could be another mineralized zone to the north in a flat area about one kilometre from the mountains. 

In 2006, Silvercorp retained Golder Associates Ltd. (“Golder”) to complete a National Instrument 43-101 (“NI 43-101”) report on the Project and it conducted a site visit between October 15 and 25, 2006.  Samples taken by Golder from trenches and shallow pits are listed in Table 1 below.  The results indicate that silver-lead-zinc mineralization exists at RZY.

Table 1 Assay Results of Check Samples by Golder

Sample # Location Ag (g/t) Pb (%) Zn (%) Description
ZDTC1-1 E95.35148
N33.26569
327 5.28 1.33 grab sample, disseminated sulphides
ZDTC1-1 E95.35148
N33.26569
†††  grab sample, wallrock
RZY001 TC1 836 17.18 15.33 grab sample, disseminated sulphides
RZY002 QJ2 105 2.2 4.5 grab sample, wallrock
RZY003 TC2 3,015 17.64 11.93 grab sample, disseminated sulphides
RZY004 QJ1 723 1.49 0.29 grab sample, wallrock


Exploration 2011-2012

In 2011 Silvercorp, acting through QFM and QGSI, conducted surface geology mapping and an induced polarization (“IP”) geophysical survey program.  The IP survey commenced along the western portion of the 6.5 kilometre long mineralized zone and was completed in 2012. The survey results indicate the existence of an area of high polarization to the north of the altered structured zone, and a separate minor zone of high polarization to the south. These high polarization areas may be related to mineralized alteration zones at depth.

Trenching

In 2012, seven trenches were completed by QFM.  Silver-lead-zinc mineralization was identified in all trenches. The mineralization is characterized by lead-zinc sulphides and pyrite as well as oxides such as litharge and limonite. The galena is blocky or massive and is associated with quartz-carbonate veins. The width of lead-zinc mineralization exposed in trenches ranges from a few metres to more than 10 metres with individual galena-quartz veins of a few centimeters to half a meter wide. Assay results from the trenches completed in 2012 confirmed the presence of high grade silver-lead-zinc mineralization as indicated by historical results (see Table 2 below). The assay results of the new trenches are shown together with the historical results in Table 2.  High grade silver is mostly associated with high grade lead and zinc which is the case of blocky or massive lead-zinc sulphides with quartz veins, but some high grade silver intervals contain relatively low values of lead and zinc, which may mean there are multiple distinct variations of mineralization.

Table 2 Assay Intervals of Trenches and Pits

Section Trench/Pit No. Interval (m) Ag (g/t) Pb (%) Zn (%) Note
0 TC16 0.60 42.10 1.22 1.06 Historical
TC17 3.80 1,337.54 1.13 1.53 Historical
2012TC5 19.20 72.25 1.93 0.33 Silvercorp
2012TC5 11.50 30.59 0.71 0.58 Silvercorp
2012TC5 1.40 126.00 0.11 0.18 Silvercorp
16 2012TC6 7.8 30.15 0.138 0.085 Silvercorp
2012TC6 4.5 82.95 0.355 0.187 Silvercorp
2012TC6 4.5 12.42 0.135 0.384 Silvercorp
2012TC6 19.7 201.37 2.696 0.254 Silvercorp
23 TC15 1.50 22.80 0.048 0.094 Historical
TC15 3.00 33.00 0.35 0.1 Historical
QJ5 4.45 58.20 0.92 0.13 Historical
24 TC6 6.00 132.55 2.57 1.16 Historical
QJ3 5.00 130.32 2.98 2.43 Historical
2012TC7 3.00 14.05 0.05 0.2 Silvercorp
2012TC7 8.60 66.90 0.57 0.74 Silvercorp
2012TC7 2.20 405.61 5.02 2.55 Silvercorp
35 TC1 21.80 70.75 0.88 0.84 Historical
QJ2 5.00 217.28 3.57 8.07 Historical
2012TC3 20.80 50.21 1.24 0.79 Silvercorp
40 TC7 7.50 259.34 5.91 0.58 Historical
QJ4 5.50 1,276.66 21.31 0.93 Historical
2012TC8 3.50 14.87 0.13 0.36 Silvercorp
2012TC8 9.00 201.27 3.69 0.66 Silvercorp
51 TC2 16.50 349.57 1.38 0.53 Historical
QJ1 8.00 2,025.84 6.58 3.00 Historical
2012TC2 31.50 76.62 0.6 0.17 Silvercorp
56 TC12 4.2 51.61 0.035 0.883 Historical

“QJ”- shallow pit
Historical assay results were analyzed by the Qinghai Geological Central Laboratory
Silvercorp’s historical assay results were analyzed by SGS labs in Tianjin, China

Drilling

To test the depth potential of the mineralization exposed by surface workings, over 890 metres in five drill holes were drilled in 2012.  Multiple altered structure zones with narrow galena-quartz veins were hit in holes, but no massive or blocky lead-zinc sulphide quartz veins, as observed in the trenches on surface, were intercepted.  Although assay results of drill cores indicated the mineralization occurs in the major east-west structural zones in the Permian clastic sediments and is continuing at depth (see Table 3 below), the width and grades of drill intercepts are inferior to the results of the surface trenches and pits. However, given the strike extent of the mineralization, and the high-grade nature of the silver-lead-zinc mineralization indicated by samples from the trenches and pits, New Pacific believes there is enough evidence to support the transaction and justify continued drilling at the Project in 2013.

Table 3 RZY Drill Intercepts 2012

Section Hole_Id From (m) To (m) Interval (m)1 Ag (g/t) Pb (%) Zn (%)
35 ZK3501 67.2 68.7 1.5 116 2.03 0.81
ZK3502 12.2 13.7 1.5 198 1.02 0.64
58.9 60.4 1.5 704 1.09 0.47
91.1 92.1 1 202 3.23 1.98
51 ZK5101 59.1 60.6 1.5 103 0.27 0.49
117.6 119.1 1.5 107 1.06 1.96
ZK5102 75.4 76.9 1.5 205 3.53 1.84
79.9 84.4 4.5 94 0.89 1.64
87.4 88.9 1.5 31 0.51 1.81
124.8 125.3 0.5 99 0.08 1.64
24 ZK2401 no significant results
note: assay results were analyzed by SGS labs in Tianjin, China
  1. All intervals are reported as downhole lengths and are not corrected to true widths for the mineralized intervals as drill holes typically cut mineralization at variable angles and geometries of mineralized zones remain speculative until further drilling is completed.

The 2013 Exploration Program

The 2013 drilling program at the Project intersected significant silver-lead-zinc-antimony-copper-tin mineralization in two mineralization zones: the known main mineralized structure zone (“Zone 1”) was discovered by historical exploration; and a new mineralized structure zone (“Zone 2”, previously a target of interest based upon its soil geochemical anomaly), was confirmed this year by surface trenches and drilling to the depth. The new zone is located about 300 metres to the north of, and parallel to, the main zone. Highlights of the most prominent drill results for each zone include (note - widths are core length not true widths):

Zone 1:

  • 35.30m @ 343 g/t Ag, 4.13% Pb, 4.66% Zn, 0.60% Sb, 0.12% Cu and 0.14% SnO2 from 26.00 metres to 61.30 metres, including 7.87m @ 1,219 g/t Ag, 13.63% Pb, 11.86% Zn, 1.69% Sb, 0.38% Cu and 0.44% SnO2 from 27.33 metres to 35.20 metres in the hole ZK2402.
  • 16.35m @ 204 g/t Ag, 1.53% Pb, 3.15% Zn, 0.37% Sb, 0.04% Cu and 0.02% SnO2from 110.65 metres to 127.00 metres, including 7.15m @ 412 g/t Ag, 2.69% Pb, 5.48% Zn, 0.71% Sb, 0.08% Cu and 0.04% SnO2 from 110.65 metres to 117.80 metres in the hole ZK1602.
  • 6.30m @ 271 g/t Ag, 5.61% Pb, 3.10% Zn, 0.84% Sb, 0.10% Cu and 0.13% SnO2from 80.40 metres to 86.70 metres, including 0.80m @ 1,740 g/t Ag, 38.52% Pb, 13.20% Zn, 5.63% Sb, 0.51% Cu and 0.65% SnO2 from 82.65 metres to 83.45 metres in the hole ZK2701.

Zone 2:

  • 15.00m @ 276 g/t Ag, 5.00% Pb, 6.13% Zn, 1.19% Sb, 0.08% Cu and 0.07% SnO2 from 89.00 metres to 104.00 metres, including 3.75m @ 602 g/t Ag, 10.87% Pb, 10.70% Zn, 2.63% Sb, 0.14% Cu and 0.12% SnO2 from 91.25 metres to 95.00 metres; and 2.95m @ 438 g/t Ag, 8.98% Pb, 10.45% Zn, 1.53% Sb, 0.14% Cu and 0.14% SnO2 from 99.65 metres to 102.60 metres in the hole ZK1102.
  • 5.60m @ 406 g/t Ag, 1.44% Pb, 0.96% Zn, 1.02% Sb and 0.02% Cu from 93.80 metres to 99.40 metres, including 1.50m @ 502 g/t Ag, 0.87% Pb, 1.16% Zn, 0.55% Sb and 0.03% Cu from 93.80 metres to 95.30 metres; and 1.40m @ 890 g/t Ag, 2.94% Pb, 0.29% Zn, 2.58% Sb and 0.04% Cu from 96.60 metres to 98.00 metres in the hole ZK1501.
  • 2.60m @ 598 g/t Ag, 10.61% Pb, 0.75% Zn, 3.02% Sb, 0.05% Cu and 0.15% SnO2 from 5.50 metres to 8.10 metres in the trench TC1101.

The assay results are summarized in Table 1 below. Mineralization style of Zone 1 and Zone 2 are similar and both zones are hosted by altered shear structures developed in Permian turbidite sediments and are generally characterized by massive and disseminated sulfides of galena-sphalerite-pyrite in altered sandstone and dacitic dykes. The 2013 drilling program covered only a two-kilometre long section of the entire six kilometre long known mineralized zones on a drill grid of one hundred metres by two hundred metres, aiming to test the size and nature of the silver-lead-zinc mineralized structure and to confirm the assay results of historical trenching and drilling. With successful drill results of 2013 the Company believes that the Project may have the potential of hosting significant silver dominated polymetallic resources, and the Company plans to commence resource definition drilling at the known mineralized Zone 1 and Zone 2, and, in addition, plans to continue with regional exploration to identify more mineralized zones at other prospects of the Project during the 2014 field campaign.

Table 1: Assay results

Hole_id Depth_from (m) Depth_to (m) Interval (m) Ag_g/t Pb_% Zn_% Sb_% Cu_% SnO2_% Remarks

ZK2402 17.00 18.50 1.50     0.65   0.01   Zone 1
  26.00 61.30 35.30 343 4.13 4.66 0.60 0.12 0.14
including 27.33 35.20 7.87 1,219 13.63 11.86 1.69 0.38 0.44
  106.30 107.30 1.00 166 0.44 0.40 0.22 0.03  
  178.40 180.15 1.75 15 0.29 0.39 0.04 0.01  
  241.50 243.00 1.50 13 0.48 0.87 0.01 0.01  
  283.50 286.50 3.00 3 0.07 0.91 0.01 0.00  
  289.50 291.00 1.50 6 0.02 1.21   0.01  
  294.00 295.80 1.80 16 0.20 0.79 0.03 0.01 0.01

ZK1602 17.00 24.50 7.50 1 0.13 0.87 0.01 0.01  
  48.50 50.00 1.50 58 0.35 0.13 0.05 0.03  
  110.65 127.00 16.35 204 1.53 3.15 0.37 0.04 0.02
including 110.65 117.80 7.15 412 2.69 5.48 0.71 0.08 0.04
  149.55 157.00 7.45 33 0.60 0.79 0.11 0.02  
  163.00 164.50 1.50 6 0.05 0.46 0.01 0.01  
  168.90 170.35 1.45 13 0.22 0.69 0.03 0.01  
  186.70 188.20 1.50 13 1.51 0.02 0.16 0.01  

ZK2701 21.90 23.40 1.50 25 0.30 0.67 0.07 0.02 0.01
  69.24 71.80 2.56 36 0.67 1.53 0.11 0.02 0.01
  77.80 79.30 1.50 17 0.25 0.56 0.04 0.01 0.01
  80.40 86.70 6.30 271 5.61 3.10 0.84 0.10 0.13
including 82.65 83.45 0.80 1,740 38.52 13.20 5.63 0.51 0.65
  88.00 89.30 1.30 30 0.59 0.36 0.07 0.01  
  91.90 93.05 1.15 15 0.24 0.64 0.03 0.01 0.03
  162.10 166.65 4.55 77 1.23 0.92 0.02 0.04 0.04
including 164.60 165.60 1.00 261 4.12 1.46 0.03 0.12 0.10
  170.80 176.45 5.65 135 1.63 5.79 0.04 0.10 0.05
including 170.80 173.60 2.80 259 3.25 7.25 0.08 0.15 0.08

ZK1901 16.55 17.30 0.75 58 0.44 0.53 0.15 0.02 0.01
  36.20 37.50 1.30 45 0.41 0.76 0.10 0.01  
  44.50 50.40 5.90 59 1.02 2.87 0.21 0.03 0.02
including 46.35 47.85 1.50 152 2.52 7.72 0.59 0.07 0.06
  76.63 79.80 3.17 113 2.80 2.23 0.51 0.04 0.02
including 76.63 77.90 1.27 246 6.27 4.66 1.15 0.08 0.05
  85.95 87.20 1.25 30 0.74 0.59 0.09 0.01  
  192.52 194.55 2.03 22 0.25 0.29 0.03 0.01  

ZK1101 43.80 45.30 1.50 29 0.53 0.90 0.06 0.02  
  72.00 73.20 1.20 17 0.27 0.99 0.05 0.03  
  101.00 102.15 1.15 264 3.27 2.56 0.09 0.07 0.03
  249.25 250.50 1.25 19 0.02 2.08   0.04 0.03

ZK003 70.50 71.90 1.40 139 0.81 0.53 0.64 0.03  
  219.30 220.50 1.20 16 0.23 0.46   0.01  
  234.45 237.55 3.10 28 0.40 0.61 0.05 0.02 0.01
  238.80 240.00 1.20 40 0.13 0.44 0.03 0.01  
  376.00 377.50 1.50 8 0.09 0.45 0.02 0.01  
  380.50 385.00 4.50 34 0.22 0.73 0.02 0.03  

ZK501 5.90 6.90 1.00 79 3.29 2.89 0.60 0.05 0.04
  51.70 53.10 1.40 61 1.68 1.20 0.46 0.04 0.05
  106.90 108.60 1.70 150 0.26 0.36 0.34 0.04 0.04
  263.70 265.20 1.50 21 0.33 0.52 0.02 0.01  

ZK801 27.20 28.70 1.50 56 0.80 1.80 0.15 0.04 0.05
  37.70 40.10 2.40 18 0.27 0.71 0.04 0.01  
  48.80 51.00 2.20 12 0.15 0.89 0.05 0.01  
  60.70 61.70 1.00 55 0.29 0.10 0.08 0.02 0.01
ZK3201 66.90 70.90 4.00 209 0.51 0.84 0.18 0.04  
including 69.50 70.90 1.40 440 1.23 2.07 0.44 0.06 0.01
  92.00 97.00 5.00 69 0.15 1.27 0.07 0.02 0.01
  141.00 142.10 1.10 22 0.29 0.51 0.03 0.02 0.01
  143.20 144.25 1.05 121 1.12 5.45 0.36 0.08 0.06
  201.70 205.05 3.35 53 0.58 1.48 0.02 0.01  

ZK4001 6.50 7.70 1.20 5 0.08 0.76 0.01 0.02  
  33.35 34.20 0.85 157 0.37 2.27 0.11 0.04  
  38.60 42.30 3.70 33 0.09 0.78 0.03 0.01  
  58.70 59.80 1.10 6 0.10 0.68 0.02 0.01 0.01
  118.00 119.20 1.20 214 1.35 4.95 0.27 0.05 0.01

ZK3505 199.30 213.50 14.20 45 0.69 0.98 0.08 0.03 0.03

ZK701 47.87 49.15 1.28 49 1.31 6.21 0.44 0.05 0.05 Zone 2
  54.90 56.40 1.50 4 0.01 0.56 0.01 0.01  
  60.50 62.05 1.55 15 0.10 2.20 0.03 0.02 0.01

TC1101 5.50 8.10 2.60 598 10.61 0.75 3.02 0.05 0.15

ZK1102 63.50 65.00 1.50 105 0.30 0.24 0.17 0.01  
  89.00 104.00 15.00 276 5.00 6.13 1.19 0.08 0.07
including 91.25 95.00 3.75 602 10.87 10.70 2.63 0.14 0.12
including 99.65 102.60 2.95 438 8.98 10.45 1.53 0.14 0.14

ZK1103 203.60 206.10 2.50 41 0.82 1.49 0.07 0.02 0.01
  210.90 212.20 1.30 24 0.26 0.44 0.04 0.01  

ZK1501 93.80 99.40 5.60 406 1.44 0.96 1.02 0.02  
including 93.80 95.30 1.50 502 0.87 1.16 0.55 0.03  
including 96.60 98.00 1.40 890 2.94 0.29 2.58 0.04  
Cutoff of 40 g/t silver or 0.5% of the sum of lead and zinc is used in calculation of intercepts. Interval is reported as core length. True width is not available due to speculative geometry of mineralized zones caused by scarcity of drill data at this early exploration stage. Tin is reported as oxide equivalent.


For further details see news release of January 14, 2014.

Randy Cullen, P.Geo., is the Qualified Person on the Project as defined under National Instrument 43-101. He has reviewed and approved the contents of this webpage.

Last updated January 4, 2016.