Source: Streetwise Reports 08/17/2019
The rationale for investing in this Canadian mining company is given in this BMO Capital Markets report.
In an Aug. 13 research note, analyst Ryan Thompson reported that BMO Capital Markets initiated coverage on New Pacific Metals Corp. (NUAG:TSX.V; NUPMF:OTCQX) with an Outperform (Speculative) rating and a CA$3.75 per share target price. The stock is currently trading at around CA$2.64 per share.
Thompson presented the company highlights.
One, Silver Sand, New Pacific’s flagship project in Bolivia, could become a “very large, profitable project,” he wrote, based on the scale of the land package, the mineralization already discovered at the main Silver Sand area and the prospective mineralized zones. “These projected zones show characteristics similar to Silver Sand, as evidenced by artisanal mining and represent several additional drill targets to be tested,” added Thompson.
Two, silver majors Silvercorp Metals and Pan American Silver invested in Silver Sand, which BMO interprets as a “vote of confidence” in the project.
Three, New Pacific is on the cusp of completing a resource estimate for Silver Sand. The report is expected by year-end 2019 with a preliminary economic assessment to follow in 2020.
Four, Silver Sand is a rarity in that few silver developments projects exist in the world. As such, it is a “scarce deposit with a high amount of leverage to the silver price,” Thompson commented.
Five, New Pacific signed a mining production contract (MPC) with Bolivia’s state mining entity, COMIBOL, the first ever between it and a private company. The MPC “outlines a less onerous set of conditions compared to laws that were established previously,” Thompson explained. “We note that the MPC must still be passed through parliament to be ratified into law.”
Despite the MPC, country risk remains, Thompson pointed out. That and Silver Sand’s early stage warrant the Speculative in BMO’s rating on New Pacific.
The bottom line, Thompson noted, is that “as Silver Sand continues to advance, we see the potential for shares to rerate higher if the market gains a better understanding of the potential scale and economics of the project via delivery of an NI 43-101 resource estimate at year-end.”
Sign up for our FREE newsletter at: www.streetwisereports.com/get-news
Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of New Pacific Metals, a company mentioned in this article.
Disclosures from BMO Capital Markets, New Pacific Metals Corp., August 13, 2019
IMPORTANT DISCLOSURES
Analyst’s Certification
I, Ryan Thompson, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Company Specific Disclosures
Disclosure 5: BMO Capital Markets or an affiliate received compensation for products or services other than investment banking services within the past 12 months from Pan American Silver and Silvercorp Metals.
Disclosure 6C: Pan American Silver and Silvercorp Metals are clients (or were clients) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: C) Non-Securities Related Services.
Disclosure 16: A research analyst has extensively viewed the material operations of New Pacific Metals Corp.
Disclosure 17: New Pacific Metals Corp has paid or reimbursed some or all of the research analyst’s travel expenses.
Disclosure 19: BMO Nesbitt Burns Inc. (“BMO NBI”) has provided a fairness opinion to the Special Committee of the Board of Directors of Tahoe Resources Inc. in connection with the definitive agreement entered into with Pan American Silver Corp. BMO NBI has been paid a fee. BMO NBI follows information control procedures which prevent its research analysts who are issuing research from having access to non-public information
received by BMO NBI’s investment banking personnel in connection with the transaction. Accordingly, it is possible that individual employees at BMO NBI may have material non-public information or opinions which are not included in, and may not be consistent with, the information and advice in this research report.
For Important Disclosures on the stocks discussed in this report, please click here.
( Companies Mentioned: NUAG:TSX.V; NUPMF:OTCQX,
)