New Pacific Metals Corp. (TSX: NUAG) (NYSE-A: NEWP) has signed Administrative Mining Contracts (AMCs) for its Carangas Silver-Gold Project in Bolivia, granting a 30-year fixed term and marking a critical step in transitioning the project from exploration to production. The contracts will now be submitted for ratification and approval, moving the company closer to formal mining tenure. This development comes as the global silver market faces a fifth consecutive year of supply deficit, with demand from electric vehicles, AI data centers, and green energy outpacing production.
The Silver Institute expects global mine production to remain flat in 2026, widening the structural deficit. Governments, including the U.S., have classified silver as a critical mineral. Most silver is mined as a byproduct of copper and zinc, limiting the ability to rapidly increase supply. New Pacific Metals aims to help fill this gap with its two large undeveloped open-pit silver projects: Silver Sand and Carangas. Together, they have the potential to produce nearly 23 million ounces of silver annually. Carangas alone holds a mineral resource of over 200 million ounces of silver and is projected to produce 15.5 million ounces per year.
Drilling at Carangas is set to commence in the first half of September, with approximately 25,000 meters of the 30,000-meter program focused on upgrading mineral resources in both the silver and gold zones. The remaining drilling will test extensions and new targets. The company notes that this campaign positions Carangas among a small group of potential future silver producers capable of making a meaningful contribution to the global market.
Carangas is planned as an open-pit mine, which is generally cheaper and safer to operate. During the first eight years, New Pacific expects production costs of about $12 per ounce of silver after byproduct credits from gold and base metals. With silver prices hitting an all-time high earlier this year and J.P. Morgan predicting $63 per ounce in Q4 2026, the project is expected to pay back its setup costs in less than two and a half years. The mine has enough resources to operate for nearly two decades. If it meets its targets of over 15 million ounces annually, it would represent about 1.8% of 2025’s global mine production; at 25 million ounces per year, that share could rise to around 3%.
For readers invested in raw materials, this announcement signals progress toward bringing significant new silver supply online. The successful development of Carangas could ease some pressure on manufacturers facing soaring material costs and support the rollout of green technologies. However, permitting and technical work, including environmental categorization and an Environmental Impact Assessment, remain ahead. The outcome will be closely watched as an indicator of whether new mining projects can help bridge the persistent silver deficit. To learn more about New Pacific Metals and the Carangas silver project, click here.
