TSX: TVI OTCQX: TVIPF
TSXV: MIO ASX: MDO FFT: OLN
CALGARY, Sept. 10, 2013 /CNW/ - TVI Pacific Inc.
(TSX:TVI) (OTCQX:TVIPF) (TVI) and Mindoro Resources Ltd.
(TSXV:MIO) (ASX: MDO) (FFT:OLM) (Mindoro) announced today a
National Instrument 43-101 compliant Feasibility Study indicating
robust economics for a direct shipping ore operation ("DSO") of the
high iron laterite resources at the Agata Project, located in
Agusan del Norte, Mindanao, the
Philippines.
Highlights:
- Low initial start-up capital of US$10.1 million, high Internal Rate of Return
(IRR) of 187% and payback within first year of operation;
- Post-tax Net Present Value (10% discount) of US$37.9 million;
- DSO product to grade 48% Fe and 0.9% Ni. - a
consistently in demand product;
- Remaining infrastructure development planned for Q4,
2013;
- DSO to China planned to
commence in Q1, 2014.
- Shipping rates to accelerate to 2.5M wet metric tonnes per
annum in 2015.
"Completion of the Feasibility Study is a major
milestone in developing new cash-flow opportunities beyond TVI's
producing Canatuan copper-zinc mine," said Cliff James, Chairman and President of TVI
Pacific. "The study demonstrates robust economics that provide a
path towards further development at Agata and advancing our goal of
eventually building a nickel processing plant."
"We are extremely pleased with the robust
results of the Agata DSO Feasibility Study and the progress
achieved by the operator, TVI, to date. The Agata DSO project
provides a unique opportunity to generate revenue in early 2014 and
to start rebuilding value in our company. We also look
forward with keen anticipation to the results of the Agata
Processing Feasibility Study expected in early 2014", said
Tony Climie, CEO of Mindoro.
TVI and Mindoro Joint Ventures
TVI and Mindoro have signed four joint venture
agreements, previously announced on October
1, 2012, relating to the Agata and Pan de Azucar mining
projects located in the
Philippines. The joint ventures present TVI and Mindoro with
multiple growth opportunities for near and medium-term cash flow.
Mindoro has 75% interest in the projects and an option to acquire
the remaining 25% interest from a private Philippine company.
TVI may earn up to a 60% interest from Mindoro and is operator of
the projects.
Mining opportunities at Agata include:
- near-term high-iron laterite direct shipping ore operation
(DSO);
- near-term limestone DSO;
- medium-term lime production facility;
- medium-term nickel-processing plant.
Economic Assessment
Below is a summary of the Agata DSO feasibility
study economic assessment:
Table 1: Summary of Economic Results
High Iron Limonite DSO sale price
(FOB) |
USD/wmt |
$22 |
NPV (10% discount rate) post-tax |
USD (M) |
$37.9 |
Payback Period |
Years |
1.0 |
IRR post-tax |
% |
187% |
The High Iron limonite DSO sale price of
US$22 per wet metric tonne (wmt FOB)
is 10% lower than the average sale price realized by off-takers
shipping similar ore over the past 18 months.
Capital and operating cost estimates have been
developed to ±15% precision. The inputs to the Feasibility Study
were developed by Dallas Cox,
MAusIMM (CP), of Crystal Sun Consulting Limited, based on estimates
from local Philippine contractors, TVI's current suppliers and
service providers.
Installed capital cost estimates include the
Port Loading Facility, general infrastructure, mining-related
capital costs, duties and taxes for equipment, sustaining capital
and an estimate of working capital. A 10% contingency has been
allowed within the capital cost estimate.
Operating cost estimates include mining,
infrastructure, government charges, royalties, administration,
security, community relations and environmental costs. Cash
flows are calculated on an after-tax basis applying the current
Philippine taxation regime.
Mineral Reserve Estimate and DSO Production
Targets
The National Instrument 43-101 Compliant Mineral
Resource estimate for the Agata Nickel Project, released on
April 10, 2013 (available on
www.sedar.com; www.tvipacific.com; and www.mindoro.com), forms the
basis of the Mineral Reserve estimate for the Feasibility Study and
the following DSO production targets:
Table 2: DSO Production Targets
YEAR |
wmt |
Ni% |
Fe% |
2013 |
- |
- |
- |
2014 |
2,000,000 |
0.9 |
48.0 |
2015 |
2,500,000 |
0.9 |
48.0 |
2016 |
1,800,000 |
0.9 |
48.0 |
2017+ |
500,000 |
0.9 |
48.0 |
The resource estimation method applied to the
Mineral Resources was ordinary kriging. Cut-off grades
applied were 0.5% nickel within the Limonite zone and 0.8% nickel
within the Saprolite zone.
The Mineral Reserve estimate in the table below,
based on open-pit optimization and designs by Dallas Cox, reflects the economic parameters in
the Feasibility Study and is expressed in both dry metric tonnes
(dmt) and wet metric tonnes (wmt).
Table 3: Agata North Mineral Reserve Estimate -
as at August 30th,
2013
Classification |
Horizon |
M (dmt) |
M (wmt) |
Ni% |
Co% |
Fe% |
Al% |
Mg% |
SiO2% |
Proven |
Limonite |
0.18 |
0.26 |
1.00 |
0.11 |
47.1 |
3.0 |
1.6 |
5.6 |
Probable |
Limonite |
6.61 |
9.44 |
0.93 |
0.11 |
48.3 |
3.4 |
0.5 |
3.0 |
Proven + Probable |
TOTAL |
6.79 |
9.70 |
0.93 |
0.11 |
48.0 |
3.4 |
0.5 |
3.0 |
Capital and Operating Costs
The project capital and operating costs are
presented in Tables 4 and 5:
Table 4: Capital Cost Estimate for Agata Nickel
DSO Project
Description |
Capital
Costs
(Million USD) |
Mobilisation |
0.15 |
Site Preparation |
0.04 |
Road Construction/Upgrading/Widening |
1.14 |
Causeway Construction |
2.62 |
Building Construction |
1.89 |
General Services and Transportation |
0.21 |
Mechanical/Electrical Equipment |
0.07 |
Laboratory and Equipment/Apparatus |
0.24 |
Office Equipment |
0.06 |
Miscellaneous Services |
0.20 |
Subtotal |
6.62 |
|
|
Working Capital |
2.64 |
Sustaining Capital |
0.95 |
Subtotal |
3.59 |
|
|
Contingency |
0.93 |
VAT Payable (@ 12%) |
1.31 |
|
|
Total |
12.45 |
Table 5: Operating Cost Estimate
|
LOM Cost
(Million USD) |
USD /wmt
shipped |
Mining & Haulage Cost |
33.5 |
3.45 |
Ore Drying |
6.5 |
0.67 |
Stockpile Load & Haulage Cost |
16.8 |
1.73 |
Barging |
21.7 |
2.24 |
Roads, Drainage and Rehabilitation |
9.7 |
1.00 |
G&A |
17.9 |
1.84 |
Fees & Royalties |
7.5 |
0.78 |
MPSA Compensation & Rates |
3.0 |
0.31 |
VAT Payable (@ 12%) |
10.9 |
1.12 |
TOTAL OPERATING COSTS |
127.4 |
13.14 |
Port Loading Facility and Infrastructure
The close proximity of the planned Port Loading
Facility to the ore stockpile (3.5km) will provide a significant
economic advantage through low transportation costs. The Port
will consist of a causeway extending approximately 160m offshore
and will allow two barges to be moored and loaded
simultaneously.
DSO Market
The region in which the Agata DSO Project is
situated, in north-eastern Mindanao, hosts approximately fifteen
DSO operations at present that cumulatively exported 17.3 million
wmt and 19.2 million wmt in 2011 and 2012, respectively.
Over the past 18 months the High Iron DSO sale
price has fluctuated between USD $15/wmt and USD $34/wmt. The recent and historical price of High
Iron Limonite DSO has been a function of supply and demand, but
influenced by seasonal weather patterns in South East Asia. DSO projects on the
sheltered west cost of the Mindanao peninsula, where Agata is
situated, can ship ore 12 months a year and take advantage of peak
season prices.
Technical Report and Independent Qualified
Persons
A National Instrument 43-101 Technical Report is
available on SEDAR at www.sedar.com and on TVI and Mindoro's
websites at www.tvipacific.com and www.mindoro.com.
The Agata North DSO Feasibility Study has been
prepared under the direction of Dallas
Cox, an independent qualified person, with contributions
from Mark Gifford and Michael Conan-Davies; independent qualified
persons as defined by National Instrument 43-101 (Canada). Messrs Cox, Gifford and
Conan-Davies have authorized the technical information detailed in
this release.
Dallas Cox,
MAusIMM(CP), a qualified person as defined by National Instrument
43-101, has reviewed and verified the disclosure of the Mineral
Reserve Estimate in this news release. Mr. Cox has over
thirty years of experience which is relevant to the activity he has
undertaken and he has consented to the release of the pertinent
information in the form and context in which it appears.
Mark Gifford,
FAusIMM, a qualified person as defined by National Instrument
43-101 has reviewed and verified the disclosure of the Mineral
Resource Estimate in this news release. Mr. Gifford has over
twenty- six years of experience which is relevant to the activity
he has undertaken and he has consented to the release of the
pertinent information in the form and context in which it
appears.
Michael
Conan-Davies, MAusIMM(CP), a qualified person as defined by
National Instrument 43-101 has reviewed and verified the disclosure
of the Economic Assessment in this news release. Mr.
Conan-Davies has over fifteen years of experience which is relevant
to the activity he has undertaken and he has consented to the
release of the pertinent information in the form and context in
which it appears.
About TVI Pacific Inc.
TVI Pacific Inc. is a Canadian resource company
focused on the production, development, exploration and acquisition
of resource projects in the
Philippines and Southeast
Asia. The Company produces copper and zinc concentrates from
its Canatuan mine and is advancing its Balabag Gold-Silver
project. TVI is a participant/operator in several joint
venture projects in the
Philippines and Papua New
Guinea and also has an interest in an offshore Philippine
oil property.
About Mindoro Resources Ltd.
Mindoro is a Tier 1 Issuer trading on the TSX
Venture Exchange (MIO), Australian Securities Exchange (MDO) and
Frankfurt Stock Exchange (WKN 906167). Mindoro has a 75% interest,
and an option to acquire the remaining 25%, in the Agata Nickel
Project, Mindanao, and the Pan de Azucar Sulphur-Copper-Gold
Project, Iloilo. TVI Pacific Inc. has the option to earn up to a
60% interest in these projects by meeting the earn-in requirements
outlined in the September 27, 2012
release. Mindoro also holds a 53.3% stake in ASX listed Red
Mountain Mining (ASX: RMX), which has a 100% direct and indirect
interest in the Batangas gold and copper-gold projects.
The Toronto Stock Exchange has neither
approved nor disapproved of the information contained
herein.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
IMPORTANT INFORMATION REGARDING
FORWARD-LOOKING STATEMENTS
Certain statements in this news release
constitute 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",
"schedule" and similar expressions. Forward-looking statements
include, but are not limited to, commencing development of the
infrastructure for the Agata North DSO Project plans to commence
direct shipping of high iron limonite ore to China in the first quarter of 2014, and other
statements that are not historical facts. Forward-looking
statements are based upon the opinions and expectations of TVI and
Mindoro as at the effective date of such statements and, in certain
cases, information received from or disseminated by third parties.
Although TVI and Mindoro believe that the expectations reflected in
such forward-looking statements are based upon reasonable
assumptions and that information received from or disseminated by
third parties 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. These factors include, but are
not limited to, such things as general economic conditions in
Canada, the United States, the Philippines and elsewhere; volatility of
prices for precious metals, base metals, oil and gas; commodity
supply and demand; fluctuations in currency and interest rates;
inherent risks associated with the exploration and development of
mining properties; inherent risks associated with the exploration
of oil and gas properties; ultimate recoverability of reserves;
production, timing, results and costs of exploration and
development activities; political or civil unrest; availability of
financial resources or third-party financing; new laws (domestic or
foreign); changes in administrative practices; changes in
exploration plans or budgets; and availability of personnel and
equipment (including mechanical problems). 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.
The forward-looking statements of TVI and
Mindoro contained in this news release are expressly qualified, in
their entirety, by this cautionary statement. Various risks to
which TVI, Mindoro and their affiliates are exposed in the conduct
of their business are described in detail in TVI's and Mindoro's
Annual Information Forms for the year ended December 31, 2012, which were filed on SEDAR on
March 19, 2013, and April 1, 2013, respectively, and are available at
www.SEDAR.com. Subject to applicable securities laws, TVI and
Mindoro do not undertake any obligation to publicly revise the
forward-looking statements included in this news release to reflect
subsequent events or circumstances, except as required by
law.
SOURCE TVI Pacific Inc.