New Pacific Metals Carangas 2026 PEA: Bolivia’s Silver Giant

The Global Silver Supply Gap and Where New Projects Must Step In

Primary silver production has struggled to keep pace with accelerating industrial demand for over a decade. Unlike gold, which is mined predominantly for wealth preservation, silver occupies a unique dual role: it is simultaneously a monetary metal, an industrial commodity, and an increasingly critical input for solar photovoltaic panels, electric vehicle components, and advanced electronics. According to the Silver Institute, global silver demand reached record levels in recent years, while mine supply growth has remained constrained by a lack of large, high-grade development-stage assets moving through the project pipeline.

Furthermore, silver supply deficits have become a structural feature of the market rather than a temporary anomaly, placing increasing pressure on the development pipeline to deliver new producing assets at scale.

Against this structural backdrop, the economics of undeveloped silver deposits have been quietly transforming. When a project of genuine scale does emerge with robust economics, the investment community takes notice quickly. The updated Preliminary Economic Assessment for the Carangas project in Bolivia, published by New Pacific Metals (TSX: NUAG | NYSE American: NEWP) in July 2026, represents exactly that kind of emergence. The New Pacific Metals Carangas PEA Bolivia update is, by any reasonable measure, a significant development in the global silver project landscape.

What Is the Carangas Project and Why Does It Matter?

The Carangas silver-polymetallic project is located in the Oruro Department of western Bolivia, a jurisdiction that sits within the broader Central Andes metallogenic belt, one of the most prolific silver-bearing geological terranes on Earth. Bolivia itself has a centuries-long history as a silver producer, with the legendary Cerro Rico at Potosí having produced an estimated 45,000 tonnes of silver since colonial-era mining began in the 16th century, according to historical accounts documented by multiple academic sources.

New Pacific Metals, a Canadian-listed junior miner with a focused South American exploration and development strategy, acquired and advanced the Carangas asset from early-stage exploration through to what is now an advanced-stage development project. The property covers a large land package where the principal mineralisation occurs in a shallow, flat-lying sediment-hosted silver system, a geological style that lends itself to bulk-tonnage, mechanised open-pit or layered underground mining methods.

From Exploration to Economic Study: The Development Arc

A key characteristic of sediment-hosted silver deposits like Carangas is that their grade distribution tends to be relatively consistent across large surface areas rather than concentrated in narrow high-grade veins. This geometry is commercially important: it allows for lower strip ratios, more predictable resource modelling, and processing plant designs optimised for steady-state throughput rather than selective mining.

The trade-off is that headline grades are typically lower than epithermal vein systems, but the sheer tonnage of mineralised material often compensates significantly in economic terms. Indeed, silver's dual role as both a monetary and industrial metal means that large-scale, low-cost producers are increasingly valued by a broader investor base.

The project's initial Preliminary Economic Assessment was published in 2024 and established a baseline economic case. The 2026 update represents a wholesale redesign rather than a simple parameter refresh, incorporating a meaningfully larger processing throughput configuration and, critically, the formal inclusion of a separate gold-bearing zone that had been excluded from the original study entirely.

How Does the 2026 Updated PEA Compare to the Original 2024 Study?

The scale of the revision between the two studies is significant enough that it effectively constitutes a different project configuration. The numbers tell that story clearly.

Several dynamics are worth unpacking here. The most obvious driver of the NPV expansion is the base silver price assumption, which moved from $24/oz in 2024 to $45/oz in 2026, broadly reflecting the significant rally in silver prices that occurred during 2024 and into 2025. However, attributing the NPV improvement solely to price assumptions would understate the structural changes in the project itself.

The increase in processing throughput, which drives the approximately 52% improvement in average annual silver output from 6.6 Moz to 10 Moz, carries independent economic weight regardless of price. Higher throughput spreads fixed capital and operating costs across a larger revenue base, improving unit economics even in a flat-price environment. The addition of the gold zone further transforms the project by introducing a secondary revenue stream with genuinely material scale: more than one million ounces of gold over the mine life.

Why the Gold Zone Inclusion Is More Significant Than It Appears

In mining project economics, by-product credits function as a direct offset to operating costs. When those credits are large enough, they can fundamentally alter the cost structure of a project, pushing an operation down the global cost curve and improving its resilience against silver price volatility.

At the Carangas gold zone, annual production of approximately 142,700 ounces of gold during years 9 through 16 represents a substantial revenue contribution. At a gold price of $3,400/oz, that equates to roughly $485 million in gross gold revenue per year during that phase — a figure that exceeds the entire initial capital cost of the 2024 study.

This is not a marginal by-product. It is a co-product with the scale to sustain project-level cash flows even if silver prices softened materially during that production window.

Core Economic Parameters of the 2026 Carangas PEA

Base-Case Returns and What Drives Them

At the base-case metal price assumptions of $45.00/oz silver, $3,400/oz gold, $1.20/lb zinc, and $0.90/lb lead, the updated PEA for Carangas delivers a post-tax NPV of approximately $2.65 billion at a 5% discount rate, with a post-tax IRR of 35.9% and an initial capital payback period of 2.4 years.

For context, a 35.9% IRR is well above the typical 15–20% hurdle rate that institutional mining financiers apply to development-stage projects in jurisdictions with elevated regulatory complexity. The 2.4-year payback period is equally notable: in a capital-intensive sector where payback periods of 5–7 years are common for large open-pit operations, sub-3-year payback signals an unusually high cash generation rate in the early mine life.

Sensitivity to Metal Prices: Understanding the Upside

One of the more compelling analytical features of the Carangas economic model is how dramatically the NPV responds to silver price changes above the base case. The broader silver market outlook suggests continued upward pressure on prices, which would further amplify these returns.

The leap from ~$2.65 billion to ~$16 billion NPV at $67.50/oz silver illustrates a key principle of high-volume, long-life silver operations: operating leverage. Because the cost structure is largely fixed once the plant is built and running, incremental silver price gains above the AISC threshold flow almost entirely to free cash flow.

At 10 million ounces per year of payable silver production, each $10/oz move in the silver price translates to approximately $100 million in additional annual pre-tax revenue. Over a 19-year mine life, the compounding effect of price appreciation on NPV is mathematically substantial.

"This kind of convex exposure to silver prices is precisely why large, low-cost development-stage silver projects attract attention from both generalist resource investors and specialist royalty and streaming companies during periods of rising precious metals sentiment."

Production Profile and Lifetime Output

A Two-Phase Mining Configuration With a Stockpile Tail

The production structure at Carangas is tiered across three distinct operational phases:

• Years 1 to 8: Approximately 15.5 million payable silver ounces per year, representing the highest-intensity silver production phase as the operation mines through the primary silver-dominant zones.
• Years 9 to 16: Production transitions to approximately 7.6 million payable silver ounces per year, supplemented by ~142,700 ounces of gold annually as the gold zone comes online. This phase effectively balances lower silver throughput with material gold co-production.
• Years 17 to 19: The active mining phase concludes, and production is sustained entirely from pre-accumulated stockpiles, extending mine life without additional stripping or development capital.

This three-phase structure has important implications for project finance modelling. The front-loaded silver production in years 1 through 8 generates the cash flows that repay initial capital quickly, while the gold-weighted middle phase provides long-term revenue stability. The stockpile tail in years 17–19 represents low incremental cost production that adds NPV with minimal additional capital outlay.

Lifetime Metals Production Summary

To contextualise the 195 million ounce silver figure: global primary silver mine supply has ranged between 800 and 900 million ounces per year in recent years according to Silver Institute data. Carangas alone, at full production, would represent roughly 1.1% of total current global annual supply from a single asset — a meaningful addition to the primary silver pipeline, particularly given the scarcity of new large-scale silver projects advancing through feasibility globally.

Capital Structure and Cost Profile

Dissecting the $644.5 Million Initial Capital Requirement

The initial capital estimate represents a significant uplift from the 2024 study's $324 million figure, driven primarily by the larger processing plant capacity and the infrastructure requirements for integrating the gold zone. The breakdown across the mine life is as follows:

• Growth Capex: $422.7 million
• Sustaining Capex: $166.5 million
• Closure Costs: $149.8 million
• Total Life-of-Mine Capex: approximately $1.2 billion

The relationship between the $644.5 million initial capex and the $2.65 billion post-tax NPV implies a capital efficiency ratio of approximately 4.1x, meaning every dollar of upfront capital investment generates roughly $4.10 in net present value. That metric sits in the upper quartile of development-stage mining projects globally, and is a primary reason the payback period is as short as 2.4 years.

AISC in Context: What $18.25/oz AgEq Means Operationally

The all-in sustaining cost of $18.25/oz AgEq during the initial production phase compares favourably against a base-case silver price of $45.00/oz, implying a gross operating margin of approximately 59% at base-case prices. When expressed as silver-only AISC net of by-product credits (gold, zinc, and lead), the equivalent figure drops to $12.11/oz, underscoring the importance of the polymetallic credit structure to the overall cost competitiveness of the operation.

"An operating margin exceeding 50% at base-case metal prices is typically a threshold that draws serious attention from project-level debt financiers, streaming companies, and royalty groups, as it signals meaningful headroom to service project-level debt even in a price correction scenario."

Key Risks and Material Uncertainties

PEA-Stage Limitations That Investors Must Understand

A Preliminary Economic Assessment occupies the earliest stage of formal economic assessment in the mining project development sequence. It sits below a Pre-Feasibility Study (PFS) and a full definitive feasibility study in terms of rigour, data density, and confidence. Under Canadian NI 43-101 standards, a PEA may incorporate Inferred Mineral Resources, which carry a higher degree of geological uncertainty than the Indicated or Measured resources required for reserve classification.

This matters for investors in several concrete ways:

1. The economic projections in a PEA are not bankable. Project financiers require at minimum a Pre-Feasibility Study, and typically a full Feasibility Study, before committing construction-phase capital.
2. Mine plans built substantially on Inferred resources carry meaningful risk of revision as infill drilling converts those resources to higher confidence categories, potentially altering mine sequencing, throughput assumptions, or recoverable grades.
3. Capital cost estimates at PEA stage typically carry accuracy ranges of plus or minus 35–50%, meaning the $644.5 million initial capex figure could move materially in either direction through subsequent study phases.

None of these limitations diminish the significance of the Carangas economics at face value. They do, however, define the work remaining before the project can be financed and constructed.

Bolivia's Regulatory Environment: Navigating Complexity

Bolivia operates under a mining regulatory framework governed by the Bolivian Mining Law (Law 535), which was substantially revised in 2014. The state mining company, COMIBOL, plays a central role in the sector, and the framework includes provisions for administrative mining contracts that define the terms under which private companies operate.

For New Pacific Metals, the conversion of existing exploration licences to Administrative Mining Contracts is a prerequisite for advancing to feasibility-level studies and ultimately to construction. Bolivia has historically presented a complex operating environment for foreign mining companies, with periods of resource nationalism, regulatory uncertainty, and community engagement challenges. Investors should assess Bolivia-specific political and regulatory risk independently as part of any investment analysis.

Permitting Status and Regulatory Pathway

The next critical milestones on the Carangas development timeline are regulatory in nature rather than technical. New Pacific Metals has indicated its intention to:

1. Complete the conversion of Exploration Licences to Administrative Mining Contracts.
2. Initiate the Environmental Impact Assessment (Estudio de Impacto Ambiental, or EIA) process during the near-term reporting periods.
3. Continue advancing its framework agreement with the local Carangas community, which forms the social licence foundation for the project.

The EIA process in Bolivia can be lengthy and requires comprehensive baseline environmental studies, community consultation, and regulatory review. Permitting completion is widely regarded as the gating event that would trigger the commissioning of a full Feasibility Study, making it the single most time-sensitive variable in the project's development timeline.

Frequently Asked Questions: New Pacific Metals Carangas PEA Bolivia

What is the Carangas project?

Carangas is a large-scale silver-polymetallic development project located in the Oruro Department of Bolivia, owned and operated by Canadian company New Pacific Metals. The project hosts a sediment-hosted silver mineralisation system alongside a gold-bearing zone, and has been the subject of two Preliminary Economic Assessments, most recently updated in July 2026.

What were the key results of the 2026 updated Carangas PEA?

The 2026 study returned a post-tax NPV of approximately $2.65 billion at a 5% discount rate, a post-tax IRR of 35.9%, and an initial capital payback period of 2.4 years at base-case metal prices of $45/oz silver and $3,400/oz gold.

How does the 2026 PEA differ from the 2024 original study?

The 2026 study incorporates a higher-throughput processing configuration, the inclusion of the gold zone (excluded in 2024), a longer mine life of 19 years versus 16, and a base silver price of $45/oz versus $24/oz. The post-tax NPV increased from approximately $501 million to $2.65 billion.

What metal prices were used in the Carangas PEA base case?

The base case used $45.00/oz silver, $3,400/oz gold, $1.20/lb zinc, and $0.90/lb lead.

Is Carangas a permitted mine?

No. The project is currently advancing through the permitting conversion process. The company is working to convert Exploration Licences to Administrative Mining Contracts and intends to initiate the Environmental Impact Assessment process.

When could Carangas begin construction?

No construction timeline has been formally established. Construction would require completion of the permitting conversion, finalisation of an Environmental Impact Assessment, completion of a full Feasibility Study, and securing of project financing. Each of these steps carries its own timeline and execution risk.

What is the silver-equivalent production figure for Carangas?

The updated PEA estimates total lifetime production of approximately 339 million ounces of silver-equivalent, incorporating silver, gold, zinc, and lead on an equivalency basis.

Who owns the Carangas silver project?

The Carangas project is wholly owned by New Pacific Metals Corp, a Canadian mining company listed on the Toronto Stock Exchange (TSX: NUAG) and NYSE American (NEWP).

What's Next for New Pacific Metals and the Carangas Development Pathway?

Permitting as the Critical Gating Event

The trajectory from PEA to Feasibility Study is well established in the mining industry, but it is rarely linear. For Carangas, the permitting conversion process is the true gating mechanism. Until Administrative Mining Contracts are secured and the EIA process is underway, a formal Feasibility Study cannot be meaningfully advanced, and project-level financing discussions remain premature.

2026 Drilling Programs and Resource Conversion

Continued drilling programs in 2026 serve a dual purpose: converting Inferred resources to Indicated and Measured categories, which strengthens the geological foundation for a Pre-Feasibility Study, and potentially expanding the known resource envelope, particularly within the gold zone. Resource conversion through drilling is a standard but capital-intensive process, and the outcomes of 2026 drill programmes will be material to how the next study phase is structured.

Carangas Within the Broader Silver Development Landscape

In a global context where very few silver projects of this scale are advancing through the development pipeline, the New Pacific Metals Carangas PEA Bolivia result occupies a notable position. The combination of multi-hundred-million-ounce silver resources, polymetallic by-product credits, and a long mine life in a historically proven silver district provides a differentiated profile relative to most development-stage peers.

Whether that profile translates into project execution depends heavily on Bolivia's regulatory timeline, the continued support of the Carangas community, and the evolution of silver prices over the 2–4 year window typically required to advance from PEA to construction decision. Consequently, investors tracking this asset should monitor permitting milestones as the primary near-term indicator of project momentum. The updated PEA report published by New Pacific Metals provides the full technical detail underpinning these economic projections for those seeking deeper analysis.

Key Takeaways: Carangas PEA 2026 at a Glance

• 19-year mine life with active mining from years 1 to 16 and stockpile processing extending through years 17 to 19.
• Post-tax NPV of ~$2.65 billion and IRR of 35.9% at $45/oz silver base case, rising to ~$16 billion NPV at $67.50/oz silver.
• Initial capital of $644.5 million with a 2.4-year post-tax payback, implying a capital efficiency ratio of approximately 4.1x.
• Approximately 10 million payable silver ounces per year over the project life, with peak production of 15.5 Moz/year in years 1 to 8.
• Over 1 million ounces of gold produced as a significant co-product during years 9 to 16.
• Total silver-equivalent production of ~339 million oz AgEq over the full mine life.
• AISC of $18.25/oz AgEq during the initial phase, implying margins exceeding 50% at base-case silver prices.
• Permitting conversion and EIA initiation are the next critical milestones before a Feasibility Study can be advanced.

This article contains forward-looking statements and economic projections derived from a Preliminary Economic Assessment, which is subject to significant uncertainty. PEA-stage studies are not equivalent to Pre-Feasibility or Feasibility Studies and should not be relied upon for investment decisions without independent verification. Mineral resources referenced in the PEA may include Inferred resources, which carry higher geological uncertainty than Measured or Indicated classifications. Investors should review the full technical report and consult a qualified financial adviser before making any investment decisions. The author holds no position in New Pacific Metals or any related securities.

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