Industrial use of silver could increase in the next 5 years - Mark Cruise
"Silver has got its usual store of value against inflation, and we certainly see a lot of global headwinds and inflationary pressures for gold and silver," Cruise told David Lin, anchor and producer of Kitco News at the Denver Gold Forum. "But what makes silver unique is its industrial end use as well. It's a critical commodity in basically moving to a low carbon economy, in particular solar and wind power."
Cruise described the many uses of silver in the modern world. "Silver has two main uses. Silver has very high conductivity, it is great for soldering electronics, and is used in solar power and wind generation. Something people don't realize is that is has very strong antibacterial properties," Cruise added. "Silver is also impregnated in sports gear. And we see an increased use of silver in the medical field and in water filters. It's a bit of a unique metal, a store of wealth."
On the flagship project of New Pacific Metals, "It is one of the largest global silver deposit discoveries found in the last decade," Cruise said, describing a huge global silver discovery in Bolivia that was acquired by New Pacific Metals in 2017.
The silver mining site is only 35 kilometers from Cerro Rico, one of the world's largest silver mines, which has been operating for 500 years.
In the past, Bolivia's unstable politics, difficult geography, and soaring altitudes have discouraged many miners.
"If you step back and look at the silver industry, there have been few major discoveries for silver miners. If you count the potentially large development projects that could move the needle, there's very few of them out there globally, and we believe we have one of them," Cruise emphasized. "It's a very exciting time for New Pacific Metals and our shareholders."
Cruise said the company is completely focused on Bolivia. "We went where the commodity is. It's a massive silver district that historically is underexplored for the last 20-30 years. It's one of the few areas left like this," Cruise explained. "There are very few places in the world where you can find large deposits that have no modern exploration at all and result in a discovery. That's why we went there – it's about the prospectivity."
In terms of how New Pacific Metals is financed, it has two large corporate shareholders. Silvercorp Metals, which owns 30 percent of the company and Pan American Silver which owns close to 10 percent. "That is a great vote of confidence in the management team and the project," Cruise explained. "We are very well financed, sitting on close to $46 million. This is certainly sufficient to aggressively de-risk the project."
New Pacific Metals is 100 percent leveraged to silver, not silver equivalent. "This makes New Pacific Metals unique. We don't produce any byproduct, whether it's a base metal byproduct or others," Cruise said. "Silver is our main product, and streaming companies or a royalty doesn't make any sense for us because we don't have any byproducts. A combination of traditional sources of debt and equity work for us."
For more on Cruise's views on silver mining, watch the full video above. Follow David Lin on Twitter @davidlin_TV.