TVI Pacific Inc. (TSX:TVI -News) or (the “Company”), announced today that its Philippine affiliate, TVI Resource Development (Phils.) Ltd (“TVIRD”), and Atlas Consolidated Mining and Development Corp (“ACMDC”) have entered into negotiations respecting the establishment of a joint venture for the development of TVIRD’s Canatuan sulphide project in the Philippines. The Company’s interest in the Canatuan Mine and its other Philippine assets are held through TVIRD.
Certain information set out in this News Release constitutes forward-looking information, including information relating to (i) the transition of the Canatuan mine to production of copper and zinc from the underlying sulphide deposit, (ii) timing expectations concerning the commencement of operation of the proposed sulphide plant at Canatuan, (iii) anticipated capital costs and working capital requirements for the sulphide project at Canatuan, (iv) the timing of detailed engineering of the process plant at Canatuan, and (v) the timing of construction of phase 1 of the tailings dam for the sulphide project at Canatuan. Readers should review the cautionary statement respecting forward-looking information that appears at the end of this News Release.
TVIRD and ACMDC have signed a memorandum of agreement under which TVIRD has received an advance in the amount of 42 million Philippine pesos (approximately US$1 million) from ACMDC, which is secured by an accommodation pledge of 10% of the outstanding capital stock of TVIRD. This pledge has been granted by the Company’s wholly-owned subsidiary TVI International Marketing Ltd In connection with the advance, TVIRD has granted an option to ACMDC to enter into a joint venture with TVIRD to develop the Canatuan sulphide project. The option, which expires on January 15, 2008, is subject to any extensions mutually agreed upon by the parties in writing. Under the terms of the advance, no interest is payable by TVIRD as long as the parties continue to negotiate the joint venture. The memorandum of agreement with ACMDC provides that if the parties enter into the joint venture, the advance will be settled in accordance with the final joint venture agreement, however, if ACMDC determines not to proceed with the joint venture, the advance will at that time be treated as a loan and will be re-payable within six months, together with interest at 15% per annum.
In addition to the negotiations with ACMDC, TVIRD is involved in discussions with other parties to secure the funding required to develop the Canatuan sulphide project and to reduce the Company’s working capital deficiency. There can be no assurance that the joint venture contemplated by the memorandum of agreement with ACMDC will be successfully concluded or that the Co will be able to secure third party financing to develop the Canatuan sulphide project.
About the Canatuan Sulphide Project
The Canatuan mine currently produces gold and silver dore and, following the planned construction of the sulphide plant, will transition into the production of copper and zinc concentrates from a sulphide deposit underlying the current open pit operation.
Assuming that project financing is available in early 2008, TVI is targeting to have the sulphide plant in operation in the second half of 2008.
TVI has financed the initial development and construction of the sulphide project from cash flow generated by the current gossan operations. As at December, 2007, TVI expects that the remaining capital cost and working capital requirements for the sulphide project will be approximately US$14.4 million. The estimated cost to complete the project reflects potential cost savings assuming that portions of the current gossan producing plant can be converted to the proposed sulphide processing plant. To date, TVI has made considerable progress on the sulphide project, including:
-All permits required for the project are in place,
-Tax exemption has been approved by the Philippine Board of Investment,
-Updating the computerised geologic block model based on the 2006 drilling programme, for which a new NI 43-101 report is underway to update mineral resources and reserves,
-Metallurgical test work for process optimisation almost complete,
-Detailed engineering of the process plant due in Q1 2008,
-Purchased three used ball mills, two of which have been refurbished, 1 in storage,
-Tailings dam construction underway, phase 1 to be completed in Q1 2008 with 1 year capacity,
-Electrical power line under construction,
-Additional administration office building, warehouse and lab upgrade all completed, and
-Acid mine drainage study for waste rock and dam is ongoing
In July 2006, TVI filed an independent technical report on the sulphide project prepared by Norwest Corp in accordance with National Instrument 43-101.
TVI has engaged an independent third party to update the NI 43-101 mineral resource estimate for the Canatuan deposit. The report is expected to incorporate results from an extensive drilling programme consisting of 197 drill holes for a total of 8,380 metres that was completed in late 2006, as well as extensive metallurgical testing which is still ongoing. TVI has requested the updated mineral resource and reserve models to, among other things, facilitate detailed planning and operational optimisation for the Canatuan sulphide project.
About TVI Pacific Inc. (TSX:TVI -News)
TVI Pacific Inc. is a publicly traded Canadian mining company focused on exploring for and producing precious and base metals within district scale systems in the Philippines and other Asian countries. The Company’s interest in the Canatuan Mine and its other Philippine assets are held through its affiliate, TVI Resource Development (Phils.) Ltd TVI’s most advanced project, the Canatuan Mine, currently produces gold and silver dore.
Atlas Consolidated Mining & Development Corp is a major mining corporation active in the Philippines. Atlas is listed on the Philippine Stock Exchange (PSE: AT -News) with a current market capitalisation of approximately US$340 million, and was, until May 1995, listed on the American Stock Exchange (AMEX). Among Atlas’ significant mining assets in the Philippines are the Toledo Copper Mine in Cebu, where copper concentrates are expected to be exported from starting mid-2008, and the Berong Nickel Project in Palawan, which has commenced exporting nickel ore to China in early 2007. Atlas also owns a portfolio of mineral interests throughout the Philippines, which include advanced and greenfield copper, gold and nickel targets.
Certain information set out in this News Release constitutes forward-looking information. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. Forward-looking statements are based upon the opinions and expectations of management of the Company, as at the effective date of such statements and, in certain cases, information provided or disseminated by third parties. Although the Co believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, and that information obtained from third party sources is reliable, it can give no assurance that those expectations will prove to have been correct. Forward-looking statements are subject to certain risks and uncertainties (known and unknown) that could cause actual outcomes to differ materially from those anticipated or implied by such forward-looking statements. These factors include, but are not limited to, such things as the volatility of prices for precious metals and base metals, commodity supply and demand, fluctuations in currency and interest rates, inherent risks associated with the exploration and development of mining properties, ultimate recoverability of mineral reserves, timing, results and costs of exploration and development activities, availability of financial resources or third-party financing, new laws (domestic or foreign), changes in administrative practices and changes in exploration plans or budgets.
Accordingly, readers should not place undue reliance upon the forward-looking statements contained in this News Release and such forward-looking statements should not be interpreted or regarded as guarantees of future outcomes. Forward-looking information respecting the anticipated transition to production of copper and zinc from the sulpide deposit at Canatuan is based upon TVI’s current mining plans for the Canatuan mine. Forward-looking information respecting the anticipated timing and capital costs related to the startup of the sulphide plant at Canatuan is based upon the status of negotiations concerning financing of the sulphide project, that financing will be available on terms acceptable to TVI Pacific, the status of TVIRD’s programme to source equipment for the expansion of the Canatuan mine, progress made to date in the construction of the sulphide plant at Canatuan, management’s experiences with the construction of the gossan processing facility at Canatuan, and mining plans, capital budgets and other projections prepared by the Company. As well, where applicable, forward-looking information is based upon the Company’s current business strategy, budgets, mine plans and projects, all of which are subject to change. The forward-looking statements of the Co contained in this news release are expressly qualified, in their entirety, by this cautionary statement. Various risks to which the Co is exposed in the conduct of its business are described in detail in the Company’s management’s discussion and analysis for the year ended December 31, 2006 and the Company’s amended Annual Information Form for the year ended December 31, 2006, which were filed on SEDAR on December 18, 2007 and are available under the Company’s profile at www.SEDAR.com. Subject to applicable securities laws, the Co does not undertake any obligation to publicly revise the forward-looking statements included in this news release to reflect subsequent events or circumstances.
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.
Clifford M. James
TVI Pacific Inc.
President and CEO
(403) 264-7028 (FAX)
TVI Pacific Inc.
Director, Corporate Communications
(403) 264-7028 (FAX)
Source: TVI PACIFIC INC.
December 27, 2007