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The source of the chips is visible in this pic, somebody drilled and tapped a hole... possibly for a temp sender, and after realizing the hole didn't extend into the water jacket they plugged it with a pipe plug and slapped some silicone on it. So those metal chips are just debris from that work and are of concern but do clean it up before putting it back together.
Originally Posted by brewerkz
Removed water pump found small metal/silver chips in one cavity, looking help on possible source (concerned this is an oil passage).
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