New Pacific Enters Into Agreement to Acquire Majority

New Pacific Enters Into Agreement to Acquire Majority Interest in RZY
Silver-Lead-Zinc Project in Qinghai Province, China 
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 12/21/12 -- New
Pacific Metals Corp. (TSX:NUX) ("New Pacific" or the "Company") is
pleased to announce it has signed a binding letter of agreement (the
"Agreement") with Silvercorp Metals Inc. ("Silvercorp") to acquire
majority interest in its wholly owned subsidiary, Fortress Mining
Inc. ("FMI"). Pursuant to the terms of the Agreement, the Company
will pay US$3.5 million to acquire an 80% interest of FMI, with an
option to acquire the remaining 20% within two years for US$5 million
after the Company has spent US$15.9 million on the project. Since the
Transaction is a related party transaction it is subject to approval
from the Toronto Stock Exchange. 
In 2007 FMI and the Qinghai Geological Survey Institute ("QGSI")
established a Sino-Foreign Co-Operative Company; Qinghai Found Mining
("QFM"), with a term of 30 years. FMI owns an 82% interest and QGSI
owns an 18% carried interest in QFM. Currently, QFM's assets consist
of approximately US$2.0 million in net cash and a 67% interest in the
RZY exploration project (the "Project"). 
In April 2011, QFM entered into an exploration agreement with its
shareholder, QGSI to jointly explore its RZY project, an early stage
exploration project located in Qinghai Province, China (collectively,
the "Exploration Agreement"). The major terms of the agreement are: 

--  The RZY project exploration permit is held by QGSI. QFM has a 67%
    interest in the RZY project by funding exploration and drilling in 2012.
--  The exploration permit will be transferred to QFM when one of two events
    occur (1) QFM completes funding of RMB30 million (US$4.8 million) on RZY
    project exploration or capital expenditures; or (2) the RZY project
    matures to a development stage project. Once transferred; QFM will have
    a 100% interest in the RZY project, giving FMI an 82% interest in the
--  QFM, funded 100% by FMI; is then committed to invest an additional
    RMB170 million (US$27.2 million) on RZY project exploration and capital
    expenditures to have a total investment of RMB200 million (US$32.0
    million) in exploration and capital expenditures on the RZY project. 
--  If QFM does not fund the required exploration and capital expenditures,
    the Exploration Agreement will be terminated while QFM maintains its
    interest in the Project. 

To date, pursuant to the Exploration Agreement, FMI has invested
US$3.5 million in QFM and QFM has spent US$1.5 million on exploration
and development expenditures in the RZY Project. 
RZY Project Location, Background, and Geological Exploration 
The RZY Project is an early stage silver-lead-zinc exploration
project, situated on a high plateau with an average elevation of
5,000 metres above sea level. The Project is located approximately
237 kilometres via paved and gravel roads from the capital city of
Yushu Tibetan Autonomous Prefecture, or 820 kilometres via paved
highway from Qinghai Province's capital city of Xining. Regular
commercial flights are available from Xining to Yushu. 
Known mineralization is silver-lead-zinc veins controlled by altered
structure zones developed in the lower Permian marine clastic
sediments. Two silver-lead-zinc mineralized zones, MI-1 and MI-2 with
a strike extent of 6.5 kilometres and width of 25 to 100 metres have
been identified by historical surface work conducted by QGSI
including trenching, pitting, geology mapping and geophysics
surveying. The geochemical profile indicated that the
silver-lead-zinc mineralization is likely in situ, not floats of
dispersion from sources in the surrounding mountainous area. The soil
geochemical anomaly also indicated there could be another mineralized
zone to the north in a flat area about one kilometre from the
In 2006, Silvercorp retained Golder Associates Ltd. ("Golder") to
complete a National Instrument 43-101 ("NI 43-101") report on the RZY
Project and Golder conducted a site visit between October 15 and 25,
2006. Samples taken by Golder from trenches and shallow pits are
listed in Table 1 below. The results indicate that silver-lead-zinc
mineralization exists at RZY. 

Table 1 Assay Results of Check Samples by Golder                            
                         Ag    Pb    Zn                                     
Sample #   Location   (g/t)   (%)   (%)  Description                        
ZDTC1-1    E95.35148    327  5.28  1.33  grab sample, disseminated sulphides
ZDTC1-1    E95.35148      -     -     -  grab sample, wallrock              
RZY001     TC1          836 17.18 15.33  grab sample, disseminated sulphides
RZY002     QJ2          105   2.2   4.5  grab sample, wallrock              
RZY003     TC2        3,015 17.64 11.93  grab sample, disseminated sulphides
RZY004     QJ1          723  1.49  0.29  grab sample, wallrock              

Exploration 2011-2012 
In 2011 Silvercorp, through QFM and QGSI, conducted surface geology
mapping and an induced polarization ("IP") geophysical survey
program. The IP survey commenced along the western portion of the 6.5
kilometre long mineralized zone and was completed in 2012. The survey
results indicate the existence of an area of high polarization to the
north of the alteration break zone, and a separate minor zone of high
polarization to the south. These high polarization areas may be
related to mineralized alteration zones at depth. 
In 2012, seven trenches were completed by QFM. Lead-zinc-silver
mineralization was identified in all trenches. The mineralization is
characterized by lead-zinc sulphides and pyrite as well as oxides
such as litharge and limonite. The galena is blocky or massive and is
associated with quartz-carbonate veins. The width of lead-zinc
mineralization exposed in trenches ranges from a few metres to more
than 10 metres with individual galena-quartz veins of a few
centimeters to half a meter wide. Assay results from the trenches
completed in 2012 confirmed the presence of high grade
silver-lead-zinc mineralization as indicated by historical results
(see Table 2 below). The assay results of the new trenches are shown
together with the historical results in Table 2. High grade silver is
mostly associated with high grade lead and zinc which is the case of
blocky or massive lead-zinc sulphides with quartz veins, but some
high grade silver intervals contain relatively low values of lead and
zinc, which may mean there are multiple distinct variations of

Table 2 Assay Intervals of Trenches and Pits                                
                            Interval        Ag      Pb      Zn              
Section   Trench/Pit No.         (m)     (g/t)     (%)     (%)  Note        
0         TC16                  0.60     42.10    1.22    1.06  Historical  
          TC17                  3.80  1,337.54    1.13    1.53  Historical  
          2012TC5              19.20     72.25    1.93    0.33  Silvercorp  
          2012TC5              11.50     30.59    0.71    0.58  Silvercorp  
          2012TC5               1.40    126.00    0.11    0.18  Silvercorp  
16        2012TC6                7.8     30.15   0.138   0.085  Silvercorp  
          2012TC6                4.5     82.95   0.355   0.187  Silvercorp  
          2012TC6                4.5     12.42   0.135   0.384  Silvercorp  
          2012TC6               19.7    201.37   2.696   0.254  Silvercorp  
23        TC15                  1.50     22.80   0.048   0.094  Historical  
          TC15                  3.00     33.00    0.35     0.1  Historical  
          QJ5                   4.45     58.20    0.92    0.13  Historical  
24        TC6                   6.00    132.55    2.57    1.16  Historical  
          QJ3                   5.00    130.32    2.98    2.43  Historical  
          2012TC7               3.00     14.05    0.05     0.2  Silvercorp  
          2012TC7               8.60     66.90    0.57    0.74  Silvercorp  
          2012TC7               2.20    405.61    5.02    2.55  Silvercorp  
35        TC1                  21.80     70.75    0.88    0.84  Historical  
          QJ2                   5.00    217.28    3.57    8.07  Historical  
          2012TC3              20.80     50.21    1.24    0.79  Silvercorp  
40        TC7                   7.50    259.34    5.91    0.58  Historical  
          QJ4                   5.50  1,276.66   21.31    0.93  Historical  
          2012TC8               3.50     14.87    0.13    0.36  Silvercorp  
          2012TC8               9.00    201.27    3.69    0.66  Silvercorp  
51        TC2                  16.50    349.57    1.38    0.53  Historical  
          QJ1                   8.00  2,025.84    6.58    3.00  Historical  
          2012TC2              31.50     76.62     0.6    0.17  Silvercorp  
56        TC12                   4.2     51.61   0.035   0.883  Historical  
1. "QJ"- shallow pit                                                        
2. Historical assay results were analyzed by the Qinghai Geological Central 
3. Silvercorp's historical assay results were analyzed by SGS labs in       
 Tianjin, China                                                             

To test the depth potential of the mineralization exposed by surface
workings, over 890 metres in five drill holes were drilled in 2012.
Multiple altered structure zones with narrow galena-quartz veins were
hit in holes, but no massive or blocky lead-zinc sulphide quartz
veins, as observed in the trenches on surface, were intercepted.
Although assay results of drill cores indicated the mineralization
occurs in the major east-west structural zones in the Permian clastic
sediments and is continuing at depth (see Table 3 below), the width
and grades of drill intercepts are inferior to the results of the
surface trenches and pits. Drill hole ZK2401 did not hit any
significant mineralization as exposed by the surface trenches.
However, given the strike extent of the mineralization, and the
high-grade nature of the silver-lead-zinc mineralization indicated by
samples from the trenches and pits, New Pacific believes there is
enough evidence to support the transaction and justify continued
drilling at the Project in 2013. 

Table 3 RZY Drill Intercepts 2012                                           
                      From        To  Interval        Ag        Pb        Zn
Section  Hole_Id       (m)       (m)       (m)     (g/t)       (%)       (%)
35       ZK3501       67.2      68.7       1.5       116      2.03      0.81
         ZK3502       12.2      13.7       1.5       198      1.02      0.64
                      58.9      60.4       1.5       704      1.09      0.47
                      91.1      92.1         1       202      3.23      1.98
51       ZK5101       59.1      60.6       1.5       103      0.27      0.49
                     117.6     119.1       1.5       107      1.06      1.96
         ZK5102       75.4      76.9       1.5       205      3.53      1.84
                      79.9      84.4       4.5        94      0.89      1.64
                      87.4      88.9       1.5        31      0.51      1.81
                     124.8     125.3       0.5        99      0.08      1.64
24       ZK2401 no significant results                                      
note: assay results were analyzed by SGS labs in Tianjin, China             

All intervals are reported as downhole lengths and are not corrected
to true widths for the mineralized intervals as drill holes typically
cut mineralization at variable angles and geometries of mineralized
zones remain speculative until further drilling is completed. 
Alex Zhang, P.Geo., is the Qualified Person on the project as defined
under National Instrument 43-101. He has reviewed and approved the
contents of this news release. 
Sample Preparation and Assay Results 
QFM employed standard QA/QC procedures to monitor and control assay
quality by regular insertion of standard reference materials, blank
samples and duplicate samples prior to shipment for preparation and
analysis. Drill cores are halved with diamond saw on site. Half core
and trench channel samples are shipped from site by security courier
to the preparation facilities of SGS, Xi'an, China for preparation.
Sample preparation includes the typical process of drying, crushing,
splitting and pulverizing. Pulp samples then are delivered by
security courier to the analytical laboratory of SGS, Tianjin, China
for analysis. Analytical method is 4-acid digestion with ICP-AES
finish with the over limits going to AAS finish. Routine QA/QC
procedures are also carried out at the lab by itself to monitor the
quality of sample preparation and analysis. 
The trenching and drilling results set out in this news release,
including the assays that were analyzed by SGS labs in 2012, were
completed for Silvercorp Metals Inc. and QGSI, and as such, pursuant
to NI 43-101 are historical. The Company has not verified the
historical assay results and they should not be relied upon. The only
NI 43-101 technical report completed to date was the Golder technical
report in October 2006. The Company intends to complete updated
technical reports as exploration continues. 
About New Pacific 
New Pacific is a Canadian gold and silver exploration and development
company which owns the Tagish Lake gold project in Yukon, Canada. 
Certain of the statements and information in this press release
constitute "forward-looking information" within the meaning of
applicable Canadian provincial securities laws. Any statements or
information that express or involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions or future events or performance (often, but not always,
using words or phrases such as "expects", "is expected",
"anticipates", "believes", "plans", "projects", "estimates",
"assumes", "intends", "strategies", "targets", "goals", "forecasts",
"objectives", "budgets", "schedules", "potential" or variations
thereof or stating that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved,
or the negative of any of these terms and similar expressions) are
not statements of historical fact and may be forward-looking
statements or information. Forward-looking statements or information
relate to, among other things: the price of silver and other metals;
the accuracy of mineral resource and mineral reserve estimates at the
Company's material properties; the sufficiency of the Company's
capital to finance the Company's operations; estimates of the
Company's revenues and capital expenditures; timing of receipt of
permits and regulatory approvals; availability of funds from
production to finance the Company's operations; and access to and
availability of funding for future construction, use of proceeds from
any financing and development of the Company's properties. 
Forward-looking statements or information are subject to a variety of
known and unknown risks, uncertainties and other factors that could
cause actual events or results to differ from those reflected in the
forward-looking statements or information, including, without
limitation, risks relating to: fluctuating commodity prices;
calculation of resources, reserves and mineralization and precious
and base metal recovery; interpretations and assumptions of mineral
resource and mineral reserve estimates; exploration and development
programs; feasibility and engineering reports; permits and licenses;
title to properties; First Nations title claims and rights; property
interests; joint venture partners; acquisition of commercially
mineable mineral rights; financing; recent market events and
conditions; economic factors affecting the Company; timing, estimated
amount, capital and operating expenditures and economic returns of
future production; integration of future acquisitions into the
Company's existing operations; competition; operations and political
conditions; regulatory environment in Canada; environmental risks;
insurance; risks and hazards of mining operations; key personnel;
conflicts of interest; dependence on management. 
This list is not exhaustive of the factors that may affect any of the
Company's forward-looking statements or information. Forward-looking
statements or information are statements about the future and are
inherently uncertain, and actual achievements of the Company or other
future events or conditions may differ materially from those
reflected in the forward-looking statements or information due to a
variety of risks, uncertainties and other factors, including, without
limitation, those referred to in the Company's Annual Information
Form for the year ended June 30, 2012 under the heading "Risk
Factors". Although the Company has attempted to identify important
factors that could cause actual results to differ materially, there
may be other factors that cause results not to be as anticipated,
estimated, described or intended. Accordingly, readers should not
place undue reliance on forward-looking statements or information. 
The Company's forward-looking statements and information are based on
the assumptions, beliefs, expectations and opinions of management as
of the date of this press release, and other than as required by
applicable securities laws, the Company does not assume any
obligation to update forward-looking statements and information if
circumstances or management's assumptions, beliefs, expectations or
opinions should change, or changes in any other events affecting such
statements or information. For the reasons set forth above, investors
should not place undue reliance on forward-looking statements and
New Pacific Metals Corp.
Investor Relations
(604) 633-1368
(604) 669-9387 (FAX)
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