New Pacific Metals (NEWP) has received a new Buy rating, initiated by BMO Capital analyst, Kevin O’Halloran.
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Kevin O’Halloran has given his Buy rating due to a combination of factors that highlight the potential of New Pacific Metals. The company is advancing two significant silver development projects in Bolivia, namely Silver Sand and Carangas, which are expected to position it among the leading silver producers. These projects are characterized by large open-pit deposits and relatively low initial capital requirements, making them attractive investments. Additionally, the Silver Sand project stands out with its high silver grade and 100% silver production, offering strong leverage to the metal.
Another factor influencing the Buy rating is the current undervaluation of New Pacific Metals’ shares, which trade at a substantial discount to their net asset value. As the company progresses with community agreements and permitting, there is an expectation of a re-rating to higher multiples. The backing of reputable silver producers like Silvercorp Metals and Pan American Silver, which hold significant ownership stakes, further underscores the quality of the company’s assets. However, the speculative nature of the rating reflects potential risks associated with permitting challenges, particularly in relation to local artisanal mining groups and community engagement.
In another report released yesterday, Roth MKM also maintained a Buy rating on the stock with a $4.25 price target.