New Pacific Metals Corp. (“New Pacific” or the
“Company”) today announced its audited consolidated financial
results for the year ended June 30, 2017.
This earnings release should be read in
conjunction with the Company's Management Discussion &
Analysis, Financial Statements and Notes to Financial Statements
for the corresponding period, which have been posted on SEDAR at
www.sedar.com and are also available on the Company's website at
www.newpacificmetals.com. All figures are expressed in
Canadian Dollars (CAD) unless otherwise stated.
FISCAL 2017 HIGHLIGHTS
- Successfully completed the Alcira acquisition to acquire the
Silver Sand Property in Bolivia for a total cash consideration of
US$45,000,000, the transaction was closed on July 20, 2017;
- Managed to raise US$35,817,000 through two private placements
as the funding source of the Alcira acquisition, the transactions
were closed on July 17 and July 28, 2017, respectively;
- Net income attributable to equity holders of $1.37 million, or
$0.02 per share, compared to net loss attributable to equity
holders of $0.12 million, or ($0.00) per share.
FISCAL 2017 FINANCIAL SUMMARY
Net income attributable to equity
holders of the Company for the year ended June 30, 2017
(“Fiscal 2017”) was $1,372,544 or $0.02 per share (year ended June
30, 2016 (“Fiscal 2016”) - net loss of $118,167 or $0.00 per
share). The Company’s financial results were mainly impacted by the
following: (i) income from investments of $3,032,548 in Fiscal 2017
compared to $3,098,622 in Fiscal 2016; (ii) foreign exchange loss
of $78,944 in Fiscal 2017 compared to foreign exchange gain of
$864,648 in Fiscal 2016; (iii) operating expenses of $2,107,187 in
Fiscal 2017 compared to $1,029,722 in Fiscal 2016, and, (iv) no
impairment charge in Fiscal 2017 compared to impairment of mineral
property interest of $3,850,343 in Fiscal 2016.
Income from investments for
Fiscal 2017 was $3,032,548 (Fiscal 2016 - $3,098,622).
Within the investments income, $1,720,896 was from gain on the
Company’s equity investments and $1,256,349 was from fair value
change and interest earned on bonds.
Operating expenses for Fiscal
2017 was $2,107,187 (Fiscal 2016 - $1,029,722). The
increase in operating expenses was a result of the Company’s
increased activities in refocusing on mining and acquiring mining
properties in Bolivia. Significant items included in
operating expenses are as follows:
- Consulting fees for Fiscal 2017 was $110,169
(Fiscal 2016 - $3,690). The increase of consulting fees was
due to external consulting services related to seeking and
acquiring mining properties in Bolivia.
- Filing and listing fees for Fiscal 2017 was
$100,190 (Fiscal 2016 - $73,831). The filling fees
include the base fee and variable fee based on the market
capitalization paid to TSX Venture.
- Investor relations expense for Fiscal 2017 was
$119,993 (Fiscal 2016 - $55,103). The Company engaged in more
mining conferences and roadshows in the current year since it
changed its business back to mining.
- Professional fees for Fiscal 2017 was $455,978
(Fiscal 2016 - $105,180). The increase in professional fees was a
result of additional legal and accounting services related to the
Alcira acquisition.
- Salaries and benefits expense for Fiscal 2017
was $618,333 (Fiscal 2016 - $366,284). The increase in
salaries in the current year was due to increased operating
activities resulted in more chargeable hours for existing employees
and the creation of a couple of new positions.
- Office and administration expense for Fiscal
2017 was $424,167 (Fiscal 2016 - $255,397). The increase in office
and administration expenses was a result of the overall increased
activity levels of the Company.
- Share-based compensation for Fiscal 2017 was
$246,156 (Fiscal 2016 - $129,726).
Foreign exchange loss for
Fiscal 2017 was $78,944 (Fiscal 2016 - foreign exchange gain of
$864,648). The Company holds a large portion of cash and cash
equivalents and bonds in US dollars while the Company’s functional
currency is Canadian dollar, the fluctuation in exchange rates
between the US dollar and Canadian dollar will impact the financial
results of the Company. During Fiscal 2017, the US dollar
depreciated by 0.2% against Canadian dollar (from 1.3009 to 1.2977)
while in Fiscal 2016 the US dollar appreciated by 4.3% against
Canadian dollar (from 1.2474 to 1.3009).
FOURTH QUARTER FINANCIAL
SUMMARY
For the quarter ended June 30, 2017 (“Q4 Fiscal
2017”), the Company reported net loss attributable to equity
holders of $1.55 million or $0.02 per share, compared to net loss
of $1.76 million or $0.03 per share for the quarter ended June 30,
2016 (“Q4 Fiscal 2016”).
Major financial items impacting the fourth
quarter financial results were as follow: (i) loss from investments
of $708,806 in Q4 Fiscal 2017 compared to income from investments
of $1,507,480 in Q4 Fiscal 2016; (ii) operating expenses of
$756,523 in Q4 Fiscal 2017 compared to $220,352 in Q4 Fiscal 2016;
(iii) foreign exchange loss of $524,096 in Q4 Fiscal 2017 compared
to foreign exchange gain of $64,378 in Q4 Fiscal 2016, and (iv) no
impairment charge in Q4 Fiscal 2017 compared to impairment of
mineral property interest of $3,850,343 in Q4 Fiscal 2016.
ALCIRA ACQUISITION AND SILVER SAND
PROPERTY
On July 20, 2017, the Company has closed its
previously announced acquisition of 100% interest in Empresa Minera
Alcira S.A. (“Alcira”), a private Bolivian incorporated mining
company from its three shareholders (the “Vendors”) pursuant to the
terms of a share purchase agreement (the “Agreement”) dated March
28, 2017. Alcira has seven silver-polymetallic mineral
properties or ATEs (Temporary Special Authorization) in
Bolivia. The most significant property is the Silver Sand
Property (the “Property”). The other six are early-stage
exploration projects, which have either been subject to limited
small-scale mining or historical drilling.
The Company acquired Alcira for total cash
consideration of US$45,000,000. Payment terms and schedules
are summarized as follow:
- US$3,750,000 was paid to the Vendors on April 6, 2017 and was
included in deposits and prepayments as at June 30, 2017;
- US$32,250,000 was paid to the Vendors on July 20, 2017;
- US$2,000,000 was paid to Alcira on August 14, 2017 ahead of the
scheduled October 18, 2017 payment date;
- US$2,000,000 to be paid on or before October 18, 2017; and
- US$5,000,000 to be paid to the Vendors once the Company has
received certain specified permits and licenses from the
authorities of Bolivia necessary for mining and milling operations,
or once Alcira has commenced commercial production.
To facilitate the funding of its acquisition of
Alcira, the Company successfully completed two private placements
subsequent to the year end.
On July 17, 2017, the Company closed a private
placement to issue a total of 43,521,250 common shares at a price
of US$0.80 per share for gross proceeds of US$34,817,000.
Total finder’s fee for the transaction was $554,632.
On July 28, 2017, the Company closed another
private placement to issue a total of 1,250,000 common shares at a
price of US$0.80 per share for gross proceeds of US$1,000,000.
ABOUT NEW PACIFIC
New Pacific Metals Corp. is a Canadian
exploration and development company which owns the Silver Sand
Project, in the Potosi Department of Bolivia, the Tagish Lake Gold
Project in Yukon, Canada and the RZY Project in Qinghai Province,
China. Silvercorp Metals Inc. (TSX:SVM) (NYSE American:SVM),
the largest primary silver producer in China, is the major
shareholder.
For further information, contact:
New Pacific Metals Corp.,Investor
RelationsPhone: (604) 633-1368Fax: (604)
669-9387info@newpacificmetals.comwww.newpacificmetals.com
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
INFORMATION
Certain of the statements and information in
this press release constitute “forward-looking information” within
the meaning of applicable Canadian provincial securities laws. Any
statements or information that express or involve discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions or future events or performance (often, but
not always, using words or phrases such as “expects”, “is
expected”, “anticipates”, “believes”, “plans”, “projects”,
“estimates”, “assumes”, “intends”, “strategies”, “targets”,
“goals”, “forecasts”, “objectives”, “budgets”, “schedules”,
“potential” or variations thereof or stating that certain actions,
events or results “may”, “could”, “would”, “might” or “will” be
taken, occur or be achieved, or the negative of any of these terms
and similar expressions) are not statements of historical fact and
may be forward-looking statements or information.
Forward-looking statements or information are
subject to a variety of known and unknown risks, uncertainties and
other factors that could cause actual events or results to differ
from those reflected in the forward-looking statements or
information, including, without limitation, risks relating to:
fluctuating equity prices, bond prices, commodity prices;
calculation of resources, reserves and mineralization, foreign
exchange risks, interest rate risk, foreign investment risk loss of
key personnel; conflicts of interest; dependence on management and
others.
This list is not exhaustive of the factors that
may affect any of the Company’s forward-looking statements or
information. Forward-looking statements or information are
statements about the future and are inherently uncertain, and
actual achievements of the Company or other future events or
conditions may differ materially from those reflected in the
forward-looking statements or information due to a variety of
risks, uncertainties and other factors, including, without
limitation, those referred to in the Company’s Annual Information
Form for the year ended June 30, 2017 under the heading “Risk
Factors”. Although the Company has attempted to identify important
factors that could cause actual results to differ materially, there
may be other factors that cause results not to be as anticipated,
estimated, described or intended. Accordingly, readers should not
place undue reliance on forward-looking statements or
information.
The Company’s forward-looking statements and
information are based on the assumptions, beliefs, expectations and
opinions of management as of the date of this press release, and
other than as required by applicable securities laws, the Company
does not assume any obligation to update forward-looking statements
and information if circumstances or management’s assumptions,
beliefs, expectations or opinions should change, or changes in any
other events affecting such statements or information. For the
reasons set forth above, investors should not place undue reliance
on forward-looking statements and information.