New Pacific Metals Corp. is set to expand the Silver Sand silver-tin project in Bolivia after securing exploration, mining and production rights on adjacent ground.

The company said Jan. 11 that Bolivia's Ministry of Mining and Metallurgy recently approved a mining production contract between it and state miner Corporacion Minera de Bolivia, or Comibol, that covers an area of up to 56.9 square kilometers in two separate areas surrounding the early-stage project.

The contract is valid for 45 years and includes commitments for exploration and development, subject to ratification. New Pacific Metals, through subsidiary Empresa Minera Alcira SA, is to spend US$5.9 million on exploration and related work in the first five years of the contract.

The agreement gives Comibol a 4% royalty on gross sales of minerals that may be produced on ground covered by the mining production contract.

The contract stems from a memorandum of understanding New Pacific Metals inked with Comibol in mid-2018.

New Pacific Metals said the additional exploration upside increases the project to a district-scale operation. Company management could not immediately be reached for comment to take questions on exploration plans.

The company outlined plans in late 2017 for a 30,000-meter drill program at Silver Sand, to assess the potential of silver mineralization, and expanded the campaign in 2018 to 50,000 meters. Assay results are expected to be released over the next few weeks.