New Pacific Metals Corp.
TSX VENTURE : NUX

New Pacific Metals Corp.

October 26, 2011 01:09 ET

New Pacific Metals Corp. Reports Exploration Activities at the Tagish Lake Gold Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 26, 2011) - New Pacific Metals Corp. (TSX VENTURE:NUX) (the "Company") is pleased to announce the successful completion of 12,488 meters of diamond drilling in 51 holes, including 37 surface drill holes and 14 underground drill holes, from June 28 to October 1, 2011 at the Tagish Lake Gold Project in the Yukon, Canada (the "Project"). Core from this drilling has all been logged and processed and most assay results are still pending. The Company is experiencing longer wait times for its assay results as the Stewart Group, the assay laboratory completing the assay results, is in the process of being acquired by the ALS Chemex.

Permitting Update & Project Status

All exploration activities at the Project site ceased as at October 11, 2011 as the Project's current Class 3 Quartz Mining exploration license ("QML") expired on that day. The Company has applied for a new QML, along with a Class B Water Use License (WUL) in March 2011 and the Company's applications are current being review by Yukon regulators. The Company expects the regulatory process to be completed in 2011 at which point the Company will continue further exploration work.

During this interim period, the camp facility and offices at the Project site will remain open for the winter months with the access roads being maintained in anticipation of a new QML. Also, the Company is completing an "active reclamation plan", including site audit and general site clean-up. The Company will also continue to work on environmental baseline studies as well as biological studies to support its permitting process and feasibility studies to effect a 300 to 600 tonnes per day high grade mining operation.

Summary of Exploration Activities 2011

The exploration field season at the Tagish Lake Gold Project commenced on May 18, 2011, after expansion of the Project site camp from 25 to 50 persons was completed, and continued to October 9, 2011. The field activities were comprised of prospecting, surface geological mapping, soil surveying, surface drilling, underground diamond drilling, as well as supplementary sampling of historical drill cores. Other work to support the exploration program, included camp upgrading, road repair and construction, underground rehabilitation, dewatering and "de-icing," water sampling, staking new claims, and satellite image processing of the entire Project site.

Summary of the completed exploration physicals is as set out in the table below:

Table 1: Summary of Exploration Program
Holes Meters
Surface drilling 37 10,778.47
Underground drilling 14 1,709.3
Sub-total 51 12,487.77
Surface mapping 1.8 square kilometers at Raca-Chieftain Hill
Surface sampling 293 rock chip samples, 25 grab samples, 180 soil samples and 2 talus samples
Supplementary core sampling 314 samples from 50 holes
Road repair and construction 32.3 kilometers of road repaired; and
2.46 kilometers new road constructed
Underground de-watering and refurbishment 460 meters
Water sampling 348 samples
Staking 571 claims
Image processing 276 square kilometers

Supplementary Sampling of Historical Drill Core

Prior to the commencement of drilling this year, a supplementary sampling program was carried out in the historical drill cores of Goddell and Raca zones. A total of 314 samples from 50 holes were completed. Assays did not return any significant results.

Surface Geology Mapping, Prospecting and Sampling

Before drilling started in 2011, the site geology team implemented a program of surface prospecting, mapping and sampling at Raca-Chieftain Hill, Carbon Hill, Charleston, Mt McNeil and Tango. A total of 500 samples were taken including 180 soil samples, 293 chip samples, 25 grab samples, and two talus samples. The strong linear gold soil anomaly at Chieftain Hill was confirmed by this sampling activity. Additionally, 1.8 square kilometers of geology mapping was completed at the Raca-Chieftain Hill corridor area and the geological structure was re-interpreted.

Road Repair and Construction

There are extensive road accesses across the Project site. Most of the roads were built in the 1980s and required refurbishment prior to use and as such the Company repaired 32.3 kilometers of old road. The Company built only 2.46 kilometers of new road, mainly on Chieftain Hill with a section at Antimony Creek.

Underground Dewatering and "De-icing"

To provide access for underground drilling, the Company planned dewatering at the 780 meter long decline at Goddell. However, due to unexpected ground conditions, only the first 130 meters of the decline was dewatered and refurbished. At the 1300 meter level tunnel at Skukum Creek, a total of 330 meters of the portal was rehabilitated, with rebar rock-bolting, removal of the ice from the tunnels, and mine services refurbishment being conducted.

Water Sampling

As part of the environmental baseline study and its current regulatory requirements, the Company completed a total of 348 samples taken from 12 water stations from mid April 2011 to October 10, 2011. The sampling program was supervised by Access Consulting of Whitehorse, Yukon.

Staking

In April 2011, the Company staked a total of 571 new claims. The new staking expands the Company's ground position in the Wheaton river area.

Satellite Image Processing

To facilitate exploration activities, the Company retained MDA Geospatial Services Inc., of Richmond, British Columbia, to generate digital topographic base maps using high resolution Geo Eye satellite images. The new digital topographical maps cover an area of 276 square kilometers showing both new existing claims.

Underground and Surface Drilling

  1. Skukum Creek

14 underground drill holes (see Table 2) totaling 1,709.3 metres were completed at the Skukum Creek 1300 metre level tunnel to target some high grade pockets with a plan to initiate a possible bulk-sample program. Underground drilling was halted after the 14 holes were completed; the previous owners' equipment for such drilling was deficient. Once the new permit is granted, the Company intends to continue its drilling program with more effective equipment.

Table 2: List of Underground drill holes drilled at Skukum Creek
Hole_ID UTM_East UTM_North Elevation Azimuth Dip EOH
(meters
) Status
SC11-01-UG 477795.235 6671262.217 1302.918 11.4 -56.5 140.90 completed
SC11-02-UG 477795.235 6671262.217 1302.918 14 -60.6 140.10 completed
SC11-03-UG 477795.055 6671262.484 1303.106 4.5 -55.45 110.50 completed
SC11-04-UG 477795.042 6671262.445 1303.036 8.4 -63 130.00 completed
SC11-05-UG 477794.981 6671262.433 1303.008 12.6 -69 134.50 completed
SC11-06-UG 477795.524 6671261.752 1302.989 19 -73.4 161.40 completed
SC11-07-UG 477793.429 6671261.508 1302.862 359.6 -70.3 131.40 completed
SC11-08-UG 477793.368 6671261.68 1302.864 358.3 -65.2 122.30 completed
SC11-09-UG 477792.869 6671260.106 1302.857 335.4 -76.5 134.40 completed
SC11-10-UG 477792.869 6671260.106 1302.857 332 -68.2 116.10 completed
SC11-11-UG 477793.195 6671260.45 1302.849 348.5 -62.5 101.10 completed
SC11-13-UG 477795.564 6671261.976 1303.216 22.5 -54 140.00 completed
SC11-15-UG 477795.564 6671261.976 1303.216 17.5 -57 141.00 completed
SC11-14-UG 477793.8 6671263 1302 16 -51 5.60 abandoned
sub-total 1,709.30

Six surface drill holes (see Table 3) totaling 3,157 metres have been completed for the Skukum Creek area to test down-dip extension of previous underground drilling.

Table 3: List of Surface Drill holes for Skukum Creek
Hole_ID UTM_East UTM_North Elevation Azimuth Dip EOH
(meters
) Status
SC11-01 477945.459 6671171.352 1444.589 327 -63.5 400.83 completed
SC11-02 477945.445 6671171.221 1444.471 315 -74 551.44 completed
SC11-03 477945.488 6671171.505 1444.732 290 -65 449.55 completed
SC11-04 477945.879 6671171.962 1444.58 291 -70 617.50 completed
SC11-05 477945.946 6671172.144 1444.607 299 -75 632.12 completed
SC11-06 478102.302 6671140.55 1368.328 331 -60 506.07 completed
sub-total 3,169.51
  1. Goddell

The main priority for drilling at Goddell was to test areas the zone intercepted drill hole 97-41 (intercepted 64.69 metres grading 5.75 grams per tonne gold), (see the Company's press release as at January 13, 2011).

The majority of drilling was planned as underground drilling from the existing Goddell tunnel, as underground drilling can be completed year round and such drilling substantially reduces total drilling meters as opposed to drilling from surface. Accordingly, at the beginning of the season, the Company dewatered and rehabilitated the tunnel. However, as the project progressed the Company found that the ground conditions in Goddell were difficult; with faults of two to three metres requiring extensive support. After incurring $500,000 to rehabilitate the tunnel, the Company stopped further work, to re-assess the costing and value of the current plan. The Company intends to effect a new plan for next year's exploration program.

Surface drilling at the Goddell started in mid-July. To reach the planned targets, holes of 550 meters were planned. A total of eight holes were completed, totaling 3,187.02 meters, (see Table 4) of which three holes totaling 1951.86 meters were drilled to the planned depth; the remaining holes being abandoned for various reasons including drill pad depression caused by excessive rain and poor drilling performance. The completed holes have all successively hit wide zones of disseminated sulphide mineralization. This mineralization is hosted in altered andesite and rhyolite dykes, breccia zones and quartz monzonite, characterized by fine pyrite and shiny acicular arsenopyrite.

Table 4: List of Surface Drill Holes completed and abandoned at Goddell
Hole_ID UTM_East UTM_North Elevation Azimuth Dip EOH (meters ) Status
GG11-01 484093.96 6672880.13 1188.27 110.5 -47.3 369.11 abandoned
GG11-02 484051.508 6672904.502 1176.307 110 -45 633.44 completed
GG11-03 484051.606 6672904.641 1176.316 107 -45 325.18 abandoned
GG11-04 484051.204 6672904.682 1176.242 110.5 -50 638.10 completed
GG11-05 483729.8 6673089 1017.31 180 -62 24.90 abandoned
GG11-06 484045.125 6672906.065 1175.953 143 -67 680.32 completed
GG11-09 484045.21 6672906.046 1175.662 108 -72 160.58 abandoned
GG11-10 484045.159 6672905.784 1175.944 108 -66 355.39 abandoned
sub-total 3,187.02
  1. Raca and Chieftain Hill

The Raca site is located along the northeast structural extension of the Skukum Creek mineralization zones (Rainbow zone). Chieftain Hill site is located at the northeast extension of the Raca.

The main focus of surface drilling at Raca was to test the extension of known historical drilling, where drill hole, Raca 97-1, intercepted 3.6 metres grading 2.66 grams per tonne gold and 561 g/t silver, and to test at least four parallel mineralized structures.

Drilling started on June 26 and terminated on July 31. A total of five holes totaling 1,251.45 meters were drilled (see Table 5) with two holes completed at planned depth; the rest were abandoned due to downhole problems caused by thick overburdens and fault zones in tuffaceous andesite horizon. Both completed holes hit mineralization zones at planned depth; the first hole Raca11-01 hit a new zone of high grade silver in the hanging wall volcanics (see the Company's news release as at August 2, 2011). Further assay results from this drilling are still pending. The Company is planning further drilling in this area in the future.

To make better use of the weather limited time window at the Project site, drilling at Raca was stopped and the drill rig was moved to Chieftain Hill.

At Chieftain Hill the Company wanted to test soil gold anomalies outlined by a previous owner (all associated with anomalously high values of silver and base metals). Such anomalies covered a corridor two kilometres long by 500 metres wide with peak values of up to 1,000 parts per billion gold (1 gram/tonne or "g/t").

The Company confirmed these soil gold anomalies by completing a soil-sampling program, which recorded soil gold anomalies up to 0.3 g/t gold associated with lead and zinc contents of up to 0.4%. Also, to further test these anomalies, three holes were planned to cover a strike extent of 300 meters and vertical extent of 300 meters from surface. Due to difficult drilling conditions at the top of the Chieftain Hill, only one hole (CFT11-01) was eventually completed at depth of 346.83 meters (see Table 6), at which point, the rig was moved to the Rainbow Zone at Skukum Creek.

Table 5: List of Surface drill holes at Raca
Hole_ID UTM_East UTM_North Elevation Azimuth Dip EOH
(meters
) Status
RACA11-01 478317.68 6671615.188 1232.568 325 -61 350.55 completed
RACA11-02 478317.347 6671615.669 1232.573 325 -45 216.41 completed
RACA11-03 478498.322 6671509.106 1215.2 308 -56 170.14 abandoned
RACA11-04 478500.297 6671507.23 1215.064 308 -60 310.14 abandoned
RACA11-05 478394.392 6671572.378 1225.527 310 -68 204.21 abandoned
sub-total 1,251.45
Table 6: List of Surface drill holes at Chieftain Hill
Hole_ID UTM_East UTM_North Elevation Azimuth Dip EOH
(meters
) Status
CFT11-01 478904.488 6672506.587 1791.915 120 -60 346.83 completed
  1. Lake Vein of Mt. Skukum

The Lake Vein of Mt. Skukum is a high grade gold-silver epithermal deposit characterized by quartz-calcite-adularia vein filling in open space fractures in Tertiary andesitic rocks. Extensive surface and underground drilling were completed in the 1980s to delineate the deposit. Drilling began on September 8 and finished on October 1. A total of 2,482.66 meters of drilling were completed in 16 holes in Quartz-calcite-adularia veins of various width were hit in holes (see Table 7). In addition, wide zones of disseminated sulphides dominated by fine pyrite and pyrrhotite in altered volcanic tuff were observed. The assay results are pending.

Table 7: List of Surface Drill Holes at Lake Vein of Mt. Skukum
Hole_ID UTM_East UTM_North Elevation Azimuth Dip EOH
(meters
) Status
MS11-01 473575.288 6674703.979 1905.272 106 -50 81.00 completed
MS11-02 473574.991 6674703.971 1905.256 106 -66 100.53 completed
MS11-02A 473573.82 6674701.219 1905.274 106 -60 90.00 completed
MS11-03 473573.952 6674701.818 1905.32 96 -61 100.45 completed
MS11-04 473573.635 6674700.467 1905.242 117 -61 102.00 completed
MS11-05 473423.92 6674731.074 1926.42 106 54 345.00 completed
MS11-06 473423.92 6674731.074 1926.42 128 -51 206.00 completed
MS11-07 473423.92 6674731.074 1926.42 117 -55 210.00 completed
MS11-08 473440.639 6674747.729 1925.775 107 -56 243.00 completed
MS11-09 473433.412 6674768.337 1926.085 106 -59 200.10 completed
MS11-10 473506.881 6674864.506 1916.972 108 -55 189.00 completed
MS11-15 473506.468 6674864.602 1917.023 108 -64 170.00 completed
MS11-12 473667.894 6675073.146 1889.536 109 -50 138.00 completed
MS11-11 473529.066 6675110.853 1863.415 115 -53 111.00 completed
MS11-13 473578.025 6675141.68 1860.767 84 -62 106.58 completed
MS11-14 473575.7 6675141.79 1860.77 108 -58 90.00 completed
sub-total 2,482.66
  1. Antimony Creek

The Porter structure is an east-west striking altered shear zone up to one hundred meters wide at Antimony Creek. Historical surface prospecting and soil sampling indicated precious and base metal mineralization at the surface but the zone was never drill tested. Three holes were planned in order to test the depth potential along the structure this year. Drilling (hole ATM11-01) was started on September 26 and abandoned at the depth of 341 meters on September 30 because of excessive hole bending; this was far short of the target depth of 450 to 500 metres (see Table 8). A wide altered shear zone with local disseminated sulphides intervals was identified in the drill core and the assay results are pending. The potential of the major Porter structure still requires further exploration.

Table 8: List of Surface Drill Holes at Antimony Creek
Hole_ID UTM_East UTM_North Elevation Azimuth Dip EOH
(meters
) Status
ATM11-01 483653.447 6670862.606 1350.084 167.5 -64 341.00 abandoned

Occupational Health and Safety Update

During the summer, the Project received orders from Yukon Workers Compensation Health and Safety Board. Such orders were to remedy situations such as equipment deemed not to have met the regulatory standards (including mechanical deficiencies of underground mining equipment which was not owned by the Company). All such equipment has since been removed from the Project, and the Company is currently sourcing new equipment that meets or exceeds all current Yukon regulations.

New Management

The Company is pleased to announce that Jason Nickel, P.Eng., Vice-President of Engineering, has joined the Company as of September and is currently leading the Project and directing engineering evaluations, economic evaluations, and development plans at the Project site.

Jason has been involved in advancing several projects in British Columbia, Yukon and Northwest Territories. Most recently he was the Mine Manager of Capstone's Minto mine in the Yukon. Mr. Nickel has spent much of his career in engineering and mine operations. He has a B.Sc. from the University of British Columbia in Mine Engineering.

Grant of options

The Company, subject to regulatory approval, has granted an aggregate of 140,000 incentive stock options to an employee of the Company. The stock options are exercisable at $1.33 for a period of five years and are subject to a vesting period of 24 months.

About New Pacific Metals Corp.

New Pacific Metals Corp. is a Canadian near-term gold and silver production mining company engaged in the exploration and development of gold poly-metallic properties in the Yukon, Canada. The Company's only project is the Tagish Lake Gold Property in Yukon Territory. With experienced management and sufficient technical and financial resources, the Company is well positioned to build shareholder value through discovery, exploration and resource development.

Jason Nickel, P.Eng., Vice President Engineering of the Company, is a Qualified Person pursuant to NI 43-101 and has reviewed and given consent to the technical information of this press release.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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