What Comes After Silver’s Historic Run? CEO Reveals Next Moves | Jalen Yuan

Investing in the junior mining company is very risky, to be honest, but the potential

return could be really large. If we can put these two mines into production, they will

combine producing almost 19 million ounce of silver on an annual basis.

I'm here with Jalen Yuan. He's a CEO of New Pacific Metal's Court. That's NUAG on the TSX

Venture Exchange and NEWP of the NYSE Arc. A very interesting project based in Bolivia. He'll

be talking about the two silver deposits that they currently own, and we'll be talking about

the next steps for not just his company, but the entire silver industry. Now that silver is

at unprecedented levels. Welcome to the show, Jalen. Good to see you.

Thank you, David. Yeah. Before we talk about the company in detail, tell us about this current

environment and what is different for miners specifically, for miners at $100 silver versus

just a few months ago, $30 silver. What is different in the space operationally?

Well, that's a very broad question, to be honest. But I can say that all mining companies are happy.

There's no complaints. Last year, I think at the beginning of last, your silver was under $30.

Now we're trading above $80 in the range of $80 to $100. That's three or four times

last year's price. I think all mining companies share price. We're also multiplied by

at least four times or three to four times, some even more or five to six times during this

just a short one year span. That actually is significant return for any of the investors

if they have been invested in mining companies in the sector. In a period where the entire sector

is doing well valuations wise because of the reasons you just stated, how can a mining company

differentiate themselves from other companies in their peer group? Both producers as well as

early-staged explorers. I think for any company in general, not just for mining,

and focusing on the business fundamentals is still the key for any investors to look into.

For producers, obviously, you look at their profitability, their ability to generate

like free cash flows. Those things are the things that I think investors should be eyeing on.

More particularly for junior mining companies, exploration companies like us in the sector,

then you really need to eye in on the project itself. Whether it is a good project with resource

potential or not, or is it in a jurisdiction that is friendly to operate and get mines permitted

and moving on to the development and eventually to the commercial production stage. Obviously,

that also ties into whether the project is good enough to attract other big companies that

interest to acquire your project or your company. Help us understand the appeal of an exploration

company in today's environment. Some people might look at the silver price and say,

hey, Jalen, look, the silver price is already up more than 100% in less than six months.

Now, no one knows the future, but let's suppose this bull market is not over yet. That's very good

returns for anybody. Why would I look at a mining company when the underlying metal is already

doing so well? What is the additional appeal? Well, the additional appeal is you're absolutely

right. Because the metal price we cannot predict. No mining company has any significant influence or

impact on the metal prices anyway. But that to me, the metal price is more meaningful to big companies

that are in the producing stage because that directly impacts their bottom line. The higher the

prices, obviously, the more revenue they have, the more profit they make. But for a junior company,

the catch is always on the resource potential and a huge multiplier that can be applied to that

company once either through further exploration to define more resource or you're advancing your

project to the next level. Let's say if you get it permitted, if you get the mine built,

usually you will see that company's market cap multiplies multiple times. So that's the fundamental

part that is not really related to metal price for junior mining companies. So it's a fair to say

that investing in an exploration company is kind of like a call option on silver. Either you

make the discovery and then we exercise the call option because it's in the money or it doesn't

and it's out of the money and nothing happens. Is it one way to look at it? Yeah, I think it's fair

to some degree to say that. Like you invest in a junior mining company, it's very risky to be

honest. But the potential return could be really high. Yes. Yeah, it's very normal to see a junior

mining company stock move five times, even ten times in the relatively short period in one year,

one or two years period. So it's very common. But also it's very common to see junior mining

companies goes nowhere. So let's take your company as an example and help us understand the fundamentals

of your company. So your company is based in Bolivia. You have two silver projects. What is your

ultimate goal with this company and help us understand the upside potential for your company?

Right. So maybe take the chance to explain a bit of our of our company's projects at this moment.

So we are a exploration company that owns two word class silver deposits in Bolivia.

We acquired these projects in the year 2017 and 2019. And since then we've done

like a very extensive exploration and diamond drilling programs on these two projects,

which we led to our current like advanced studies. PFS for one of the project called Silver Sand

and PEA for the other project called Carangas. So through these exploration programs and advanced

studies, we define these two projects on paper as having word class potential. In other words,

if we can put these two mines into production, they were combined producing almost 19 million

ons of silver on an annual basis. And that would have put our company very comparable to those big

players like Pam Rankin-Sover, first majestic solvers in the silver sector. So basically that's

the fundamentals of our company at the moment. Would you be open to a takeover where buyout or

are you set on production? Is that your ultimate goal? Yeah, our ultimate goal is to get these two

mines permitted, constructed, and going to production by ourselves. That's our ultimate goal.

Yeah, I can make it very clear to the investors. But that being said, I mean, there are so few good

silver projects on the market at the moment. So our project definitely attracts a lot of

tension from big players in the market. Okay, yeah, we'll talk about your sharehold destruction

in a bit more detail. So there's currently two large silver players that own a significant chunk

of your equity. So we'll talk about that just a bit. Let's talk about Bolivia as a jurisdiction.

So South America is very rich in deposits. That's the upside. However, currently as everybody is

aware, there's an economic crisis in Bolivia. So negative GDP contraction, very high inflation,

how does that impact your business? Right, you're absolutely right. Bolivia as a jurisdiction is

very famous for its bound in natural resource, especially mineral resource. And in particular,

the silver resource in that region. So what has happened in Bolivia in the past 20 years was

the country was under social socialist parties ruling for the past 20 years, which its policies

not particularly friendly towards the private sector mining or attracting foreign investments.

Simple fact is that the country hasn't been granting any mining permits or making any

major mine developments to any foreign companies in the past 20 years. We've been there since 2017,

we're the almost the only company since 2017 that made significant discoveries of silver

resource in that region. But that being said, the political scheme has changed significantly

last year during their recent national election. Because before that national election,

the socialist parties always control both of the Congress and the Senate by having more than

50% of the seats in both. But the last year's national elections results show that all the left-wing

parties combine, they represent only less than 10% of the seats in both Congress and the Senate.

So Bolivia, I think Bolivian people, they're thinking it's time for a change based on the reason

that you mentioned. The country is in economic crisis, mainly driven by the shortage of US dollar

reserves, which led to the inflation and which led to the scares of necessary daily supplies,

especially in gas and diesel, those things. And the new government, I think they're on their

top political and economic agenda is to get the country out of this economic crisis.

In simple words, they need money flowing into the country. Also, the new government has been

openly citing to revive private sector mining and also to bring in good quality foreign investments

as a critical solution to their economic crisis. So at that level, we sink at macro level,

our two projects permitting and development agenda perfectly aligns with the country's

overall economic and political agenda. Because our two projects will combine over 700 million

dollars of initial investment into the country if they can get us permitted. We've been actively

working with the current government to socialize these ideas. The message we send to the government

is very clear. It's very nice for you guys to send out those open message to the world welcoming

everybody to start investing into Bolivia as a very resource, like a potential place for resource.

But what would be even better is to set up good examples in a company like us to actually

do something, right? Get us permitted, get the mines developed and built. These good examples

were more than 10,000 of words. Well, it's good that you're in touch with the government because

investors might be concerned about nationalization risk. Can you talk about that? Bolivia has had a

history even as recently in the last 20 years of nationalizing some deposits in their country,

oil and gas and also lithium. How can you convince investors this will not happen here?

Right. But as I'm saying, like the last 20 years, the Bolivian government is a very different one.

It's basically its policies more towards the left-wing socialism side. But this new government

is more centered to right side, that's for leaning. Also, the president Rodrigo Paz himself openly

saying like bring capitalism back to Bolivia. As I'm saying, they're also looking at

reviving the private sector mining and attracting foreign investments as the key solution

to their country's economic problem. So, at the current stage, I don't think national

nullize any saying would be in the government's interest because they're really just shooting

themselves in the foot if they're doing so. Yeah. So, let's talk about the permitting process.

How far along are you right now? We're actually just made some very recent progress for

on one of our project, which is Karengas project. We reached community agreement

with the local community there. So, maybe before I jump into the project level, explain that

little bit of our high level overall permitting strategies. So, we're taking a

both of a top-down and a bottom-up approach at the same time. By top-down, I mean we obviously

need to gain access and build meaningful relationships with government officers and influential

peoples across all levels of the government that is relevant to the permitting process. Because

all these permits needs to go to their congress and send it for approval. But at the same time,

the team is more focused on doing a bottom-up. By saying that, bottom-up means we want to build a very

solid foundation at the project level. That means very good community relations. Regional alliance

with other stakeholders in the areas. So, those are the foundations that I'm talking about.

Because we want to build this foundation and present a very nice package for the government to

approve. That's our goal. Now, jump into the project specifics. For Karengas, as I'm saying,

we just signed framework agreements with the local community. So, that's a big step forward

at the project foundation level. With that in hand, now we're moving on to completing some

technical aspects of our current permitting. So, for that project, we're currently under the

conversion of our existing exploration licenses into mining licenses. And we're expecting to have

that maybe completed mid-2026. So, let's say, June, July this year. So, right off that, we will

start the application of the environmental license. And internally, we'll do a feasibility study

on the project simultaneously to figure out the detailed engineering and how we want to build

the mine. The preliminary feasibility studies were done for SilverSant and Karengas in 2024,

correct? It's actually a pre- feasibility study for SilverSant and a preliminary economic

assessment for Karengas. And you're right. Both of those were done in 2024. Were there updates

since 2024? No updates yet. But as I'm saying, we're planning on doing a feasibility study for

Karengas later this year. That would be a big upgrade from the preliminary economic assessment.

The NPV, I'm reading on this slide, the NPV for SilverSant,

as of the preliminary feasibility study in 2024, is $740 million. And Karengas is a pre-PA,

is NPV is $501 million. That's based on $24 Silver. Exactly. If you were to adjust that for

today's Silver, how would your market cap change? You simply multiply it by three or four times.

Yeah, it would be over $2 billion. Why do you think the market is not

accurately updating this price change? Well, the market will obviously have the freedom to do

it themselves. But we're restricted to do it on our own. Yeah, it has to go through a proper

process. But this is an interesting aspect that I've encountered with many miners, not just

yourself, that their PEA or their pre-visibility study have NPVs of a certain number based on

a much lower asset price at the time. And if you were to adjust that for today's prices,

which the market is not doing, their market cap should be much, much higher. So is there a reason

why investors you think are not capturing this change right now up to date? I think that's

statement is only partially true, because if you look at our market cap today, I think some of

the factors are already affected into it. Just last week, we're trading over a billion US on the

market cap. That's obviously significantly higher than the two projects added up together.

And also, you have to factor in the risk factor of a junior company, as I'm saying,

like these NPVs are just defined on paper. What does it really mean if we cannot get the

mines permitted? So the market probably take that into consideration as well. They always see

whether your company can move forward to get your mine actually permitted and built as the

major risk for any junior mining company with defined assets, like in our situation. And

quite frankly, I don't blame any of those. I think that's a fair decision. Yeah, that's an honest

answer. That's why at management level, we tend to not look too much into the current market price

and those things, because as I'm saying, let's be on our control. What we are focusing on

is to get to the ground, work with local communities, work with the government to actually

get our mines permitted. That's more important. Once we made those fundamental milestones,

that will significantly lift our, like let's say, our floor price off our share.

Investors always want to talk to the management team and say, hey, why is it taking so long to

permit a project? Happens all the time. How do you answer that question? What are some of the

obstacles you have to overcome? Well, the obstacles, main obstacles for permitting in the jurisdiction

like a Bolivia comes from to France. One is at the project level. You have to deal with local

communities. You're dealing with different people all the time. It's always very challenging

and dynamic. I think all mining companies are facing similar issues. The other ones in the jurisdiction

like Bolivia, as I'm saying, there hasn't been any permits granted in the past 20 years.

Even just following the standard procedures there, could present some sort of challenges sometime,

just because even the government is not too familiar of doing that. But we are working closely

on both fronts and we've made significant progress since last year. The signing of the community

agreements with the Karengas community is a perfect example and a proof of that. As I mentioned that,

we've been making very meaningful progress with this new Bolivia government. Let's assume everything

goes to plan then what is your projected timeline to getting into production? As I'm saying,

we're intent to start the application of the environmental license second half of this year

and that process along likely take another 12 to 18 months to complete. So ideally, we're looking

at the end of 2027 or a beginning of 2028 as the starting phase of construction of our mines.

Then the construction itself likely takes another two years. So if everything goes well,

towards 2030 will be the starting of commercial production for our projects.

It's this year the capital expenditure for SilverSand is $358 million. Karengas, around

$324 million combined. That's almost $700 million. That's 70% of your current market cap. So how do

you intend to fund production? I think if we get these two mines permitted, there shouldn't be any

problem when we go into the capital market to raise funds for it. It likely will be mixed off

equity and debt or some convertibles by then. But as I'm saying, with these two work class

over projects as the fundamental and with all the permits in place, I don't foresee any issues

that we raising that kind of money in the capital market. You're planning to produce this yourself

and operate it yourself or do you think you're going to a JV with somebody else and do it?

But the options are all open. But as I'm saying, the current management's focus is on

like getting it permitted and getting these mines built and going into production by ourselves.

Yeah. But strategic windows can open at any point. What if permitting takes longer than expected?

What is your backup plan? Well, it's hard to say that we have a backup plan for the permitting

because for any company to run the project at this current stage permitting is the only focus.

We need to get it permitted. If we cannot get it permitted, someone else have to get it permitted.

So it's hard to say we have a backup plan. But all I can say is if it gets delayed,

then it will be reflected on our share price. So we'll be trading at a heavier discount if we

cannot get it permitted. But then maybe at a lower value, some other big guys may jump in to

trying to just grab it as a bargain opportunity for in both ways. That's a good way to think

about it. Yeah. Pan-American silver currently owns 11.5%. 28% is owned by silver core metals. Tell

us about the nature of your relationship with both these companies. Of course. Yeah.

Both has been long-term strategic partners in our company since 2017. They always maintain

their provider share in our company passing every run of financing in the past.

And both has been providing us with very valuable suggestions and advice from time to time.

And we appreciate it very much. And we expect them to continue support us in the same fashion,

going forward. Okay. And the operations though, it's still independently operated by

your management team. Absolutely. It's 100% independent operated by the new Pacific

management team. Okay. And do you think that the shareholder structure will change in time soon,

meaning these companies will own less or more of your shares? I don't foresee that.

Yeah. I think these two strategic partners will maintain their provider share in our share

structure. Okay. Very good. Tell us a little give us more detail about your drilling program.

We talked a lot about the permitting stage, but tell us about the 30,000 meter drilling program.

Yeah. We're going to do a plus 30,000 meters drilling at our Carangus project this year,

likely starting in the second quarter of 2026. The idea of doing this drilling program is we

allocated two thirds of the meterage to do infill and resource definition drilling,

trying to just enhance our existing resource at the upper level silver zone and also at the deep

level gold zone. And then we'll do one third of the meterage into further exploration drilling,

mainly targeting the deep level gold zone. And we'll also allocate some meterage to one of the

previously identified IP anomalies, trying to find the new resource somewhere else.

Okay. And okay, management is always important for the investors. Investors want to know

who the management team is. Tell us a little bit about yourself and your professional background,

leading up to what you currently do. Sure. Yeah. I'm actually coming from a financial background.

I'm a chatter professional accountant registered in Canada. I joined the mining industry

with SilverCorp in 2009, so 17 years ago. Worked way up all the way through the rank.

And in 2015, I was appointed as Chief Financial Officer for New Pacific Matters Corp,

which is my current company. And just the last year, I think in April, I was appointed CEO

for the company. Yes. Yeah. The biggest lessons you learned transitioning from

accountant to management in a mining company. What were they?

Obviously, it's a life-changing change for myself and for the company.

Because as I'm saying, I'm coming from a financial background. But to me, at CEO level,

it's more leadership. And how you lead the team, set up clear objectives,

make day-to-day week-to-week action plans to achieve those objectives,

and communicate those plans to your subordinates, assign tasks, work with them together,

be at the front line. For example, myself, things I took over as CEO, I spent over 75% of my time

in Bolivia, working very closely with our front line people to resolve all these permitting

issues. Then collecting timely feedbacks, assess the situation, and make adjustments, timely

adjustments. So that's my style. And I think I don't think any particular background being geology,

or mining, or financial sayings, that matters that much. It's mainly the leadership division

in those things that you can provide to your team, and how you organize your team,

how you promote the morale, and how you attract everyone to work around you towards the same

objective. Okay. Well, thank you, Jalen. Yeah. I appreciate your insights. Tell us where we can find

more information about your company. Well, the most straightforward ways to go to our company's

website, which is www.newpacificmattos.com. When can we expect the next news release?

It's a bit hard to tell. Okay. I mean, we're issuing news release based on real progress.

But hopefully, like the rest of 2026, we would be able to provide our investors or potential

investors with a stream of good news release based on real milestone progress. Your stock is up

just for the audience to know. In 2025, around last year, it was just under $1.50. It's a $5.12

sense. How are you celebrating? It was more hot work. Okay. Great. Thank you very much, Jalen.

Thanks a lot, David. Thank you for watching. Don't forget to like and subscribe.