TSX : TVI OTCQX: TVIPF
CALGARY, March 19, 2013 /CNW/ - TVI Pacific Inc. ("TVI" or
"the
Company") today released audited, consolidated financial and
operational results for the year ended December 31, 2012. This press
release should be read in conjunction with the audited
consolidated
financial statements that have been prepared in accordance with
International Financial Reporting Standards ("IFRS") and
management's
discussion and analysis for the years ended December 31, 2012 and 2011,
and filed with certain securities regulators in Canada on March 19,
2013, and also available on our web site (www.tvipacific.com
and SEDAR www.sedar.com).
2012 Year-End Highlights
$77.1 million in net revenue was
realized from the sale of concentrates;
$6.0 million in net income (before
tax) / $5.3 million in net income
(after tax)
Cash balance at year-end was $16.0
million;
Short term debts of $9.9 million
(average interest rate of 2.0%); and
A working capital surplus of $13.7
million
During the year ended December 31,
2012, the Canatuan mine generated net
revenues of $77.1 million, made up of
seven copper concentrate
shipments and three zinc concentrate shipments, as compared to
$83.0
million net revenue realized in 2011 representing seven
completed
shipments of copper concentrate and only one shipment of zinc
concentrate. The 2012 revenue was affected by a lower average
copper
price of US$3.60, as compared to
average copper price of US$3.90
realized in 2011. Net revenues are net of treatment, refining
and
penalties from the buyer which increased to 14.3% of the gross
revenue
in 2012 from 11.6% in 2011, based on the revised treatment and
refining
rates and freight charges, as negotiated and agreed with the
metal
off-take partner, taking into consideration the quality of the
concentrates and the change in the destination of the copper
concentrate shipments.
Mining, milling and other expenses for the year ended December 31, 2012,
were $48.6 million which were lower
compared to the $48.8 million
incurred in 2011, despite the volume of Cu lb eq shipped in
2012
exceeding the 2011 volumes by 5%. Improved metal
recoveries
contributed to a 7% increase in (Cu lb eq) metal production in
2012
and, combined with a lower consumption of chemicals required
for
processing, resulted in lower unit of production costs.
Mining,
milling and other expenses do not include treatment, refining
and
penalties from the buyer as these costs are netted against
revenues.
During the year ended December 31,
2012, the Company also had foreign
exchange gains of $2.7 million
arising from the settlement of
intercompany loans through the year that had been provided at
varying
historical rates in years prior as compared to a $0.2 million foreign
exchange loss in 2012.
On December 14, 2012, TVI Resource
Development (Phils.) Inc. ("TVIRD")
signed a memorandum of agreement ("MOA") with Rapu Rapu Group,
which
outlines terms for the settlement of outstanding net smelter
return
payments to TVIRD. The MOA confirms agreement of a gross sum amount
of
US$4,807,435 between TVIRD and the
Rapu Rapu Group for the period 2005
through Q4 2012. TVIRD is to receive a total of US$3,845,948, which is
net of 20% withholding taxes, of which US$2,217,184 has already been
received to date.
Cash Position
At December 31, 2012, the Company
held $16.0 million in cash that it
can
reinvest into further growth in the Company compared to
$23.7 million
at the end of 2011. The Company also held $9.9 million in various
short term debts and term loan, at an average interest rate of
2.0%.
Operational Snapshot Quarter-Over-Quarter and Year to Date
2012
|
Quarter ended
|
Fiscal year
ended
Dec. 31, 2012
|
March 31, 2012
|
June 30, 2012
|
Sept. 30, 2012
|
Dec. 31, 2012
|
Copper pound equivalent
("Cu lb eq") produced
|
6,527,072
|
6,997,256
|
7,034,311
|
7,638,715
|
28,197,354
|
|
Copper produced (lbs)
|
3,356,555
|
3,750,947
|
3,924,034
|
3,923,719
|
14,955,255
|
|
Gold produced (oz)
|
2,061
|
2,745
|
3,085
|
3,539
|
11,430
|
|
Silver produced (oz)
|
123,917
|
127,685
|
109,055
|
143,969
|
504,626
|
|
Zinc produced (lbs)
|
4,841,896
|
4,197,683
|
1,789,459
|
2,790,187
|
13,619,225
|
Production cash cost per
Cu lb eq (US$)(1)
|
1.70
|
1.29
|
1.29
|
1.34
|
1.40
|
Average copper price received
(US$/lb)
|
3.85
|
3.57
|
3.48
|
3.59
|
3.60
|
Average zinc price received
(US$/lb)
|
0.94
|
0.85
|
-
|
0.90
|
0.89
|
(1) Excludes selling
expenses and amortization expenses. See MD&A for
definition of this non-IFRS measure.
2012 Operations Summary
The average daily throughput for the year ended December 31, 2012, was
2,645 dry metric tonnes for a total mill feed in the year of
968,069
tonnes. TVI is currently targeting through 2013 an average
daily
throughput of 2,600 dry metric tonnes, which results in a
remaining
life of mine of approximately 0.8 years (subject to change in
throughput to meet shipping commitments).
Only a portion of original ore reserves was consumed through the
year
due to the additional material found and mined during the period.
This
material, primarily mineralized schist, was used as a blending
material
to optimize mill recoveries and was located both inside and outside
the
pit shell and not included in the original ore reserves.
Detailed
metallurgical and ore reserve studies will continue to be
undertaken to
determine future processing scenarios and their potential impacts
on
the ore reserves and mine life.
The following table details key operating statistics for the
Canatuan
Sulphide Mine for the year ended December
31, 2012.
|
Quarter ended
|
Fiscal year
ended
Dec.31, 2012
|
March 31, 2012
|
June 30, 2012
|
Sept. 30, 2012
|
Dec. 31, 2012
|
Total tonnes processed
|
246,998
|
229,281
|
237,383
|
254,407
|
968,069
|
Average tonnes processed per
day
|
2,744
|
2,520
|
2,580
|
2,765
|
2,645
|
Ore copper grade (%)
|
0.85
|
0.92
|
0.92
|
0.88
|
0.89
|
Copper recovery (%)
|
72.65
|
80.97
|
81.22
|
79.92
|
78.74
|
Copper concentrate produced
(dry weight - t)
|
8,370
|
9,219
|
9,708
|
9,934
|
37,231
|
Average daily concentrates
produced (dry weight - t)
|
92
|
101
|
106
|
108
|
102
|
Concentrate copper grade (%)
|
18.19
|
18.46
|
18.33
|
17.91
|
18.22
|
Concentrate gold grade (g/t)
|
7.70
|
9.48
|
9.41
|
10.51
|
9.33
|
Concentrate silver grade (g/t)
|
377.91
|
370.51
|
333.39
|
402.57
|
371.05
|
Zinc recovery (%)
|
55.29
|
61.77
|
41.98
|
47.43
|
52.99
|
Zinc concentrate produced
(dry weight - t)
|
4,494
|
3,836
|
1,677
|
2,706
|
12,713
|
Concentrate zinc grade (%)
|
48.88
|
49.64
|
48.40
|
46.77
|
48.59
|
Off-take:
|
|
|
|
|
|
Copper concentrate shipped
(dry weight - t)
|
6,033
|
10,638
|
10,274
|
9,503
|
36,448
|
Zinc concentrates shipped
(dry weight - t)
|
3,939
|
5,062
|
-
|
4,470
|
13,471
|
2013 Outlook
Balabag
Further exploration drilling was temporarily suspended through
December
31, 2012, to ensure the deposit area was cleared of illegal
miners. The
corehouse and the drill cores were relocated to Ipil during
this
drilling activity suspension. The plan is to pursue the development
of
the starter mine. TVIRD has done extensive in-house feasibility
studies
which indicate robust stand-alone economics. A Preliminary
Declaration
of Mining Project Feasibilty (DMPF) has been filed with the Mines
and
Sciences Bureau (MGB), the responsible government agency. A final
DMPF
is expected to be filed in Q2.
The Balabag NI 43-101 technical report dated June 23, 2012, and entitled
"NI 43-101 Technical Report on the Balabag Gold Project,
Zamboanga
Province, Philippines" is
available on SEDAR at www.sedar.com and on TVI's website at
www.tvipacific.com. The technical report, which incorporates
results of drilling
completed to the end of June 2011,
provides estimates of an indicated
mineral resource of 1.78 million tonnes averaging 2.34 grams per
tonne
of gold and 72.3 grams per tonne of silver containing 134,262
ounces of
gold and 4,148,196 ounces of silver.
On March 12, 2013 TVIRD secured US
$23 million low interest
financing
with a major Philippine bank to support the development of the
proposed
Balabag mine. This will provide TVIRD with additional working
capital
funding for construction and commissioning activities and
support
mining and processing activities. The facility includes a US
$20
million term loan facility with the interest rate set at
90-day Libor
plus 250 basis points (approximately 3%) and an additional US
$3
million Letter of Credit available to TVIRD for a 180 day
period at the
prevailing market rate.
The exploration drilling program has recommenced at Balabag in
January
2013 following the removal of all illegal miners from the
area though
implementation of a Cease and Desist Order ("CDO") against the
illegal
miners on 23-25 October 2012 by an
Inter-Agency Alliance of national
enforcement agencies. The Environmental Impact Statement
(EIS) has
also been endorsed in February 2013
by the Environmental Management
Bureau (EMB) technical review committee to the Department of
Environment and Natural Resources (DENR) office for the approval
and
issuance of the Environmental Compliance Certificate (ECC).
The
Declaration of Mining Project Feasibility document package is
expected
to be completed by the second quarter 2013 following the approval
of
the ECC, while plant design and equipment sizing has also been
completed as part of an update of the internal feasibility study
that
was previously submitted to the MGB.
TVIRD continues to progress with success the critical elements
to
advance the development of the Balabag project, targeting plant
construction by the second half of 2013 and first doré production
by Q1
of 2014.
Greater Canatuan Tenement Area (GCTA)
Exploration of TVI's GCTA was limited to a ground reconnaissance
survey
to verify the Versatile Time Domain Electro-Magnetics (VTEM)
geophysical survey interpretations. Potential exploration
drilling
sites have been identified from this reconnaissance work;
however,
mobilization of the rigs is currently on hold until the
required
permits are issued. Meanwhile, ground survey verification and
a more
detailed geologic surface mapping will continue to define
potential
drilling targets primarily at the neighboring tenement, which is
within
trucking distance of the current Canatuan mine/processing plant.
Any
mineable ore located in this area could be economically transported
to
the existing Canatuan plant for processing.
Malusok and SE Malusok (APSA-0023-IX)
Processing and approval of Mineral Production Sharing Agreement
(MPSA)
applications continued to be on hold because of the ongoing
moratorium
on new permit applications imposed by the Secretary of the
Department
of the Environment and Natural Resources (DENR). The moratorium on
new
permit applications is still in effect in spite of the signing of
the
much awaited Executive Order by the President of the Philippines.
Timing as to the issuance of the required permits continues to
be
uncertain.
Exploration Permit Application 61 (EXPA 61)
Exploration Permit Application 61 (EXPA-000061-IX) is also affected
by
the moratorium and therefore there were no new activities in the
area.
Tamarok Copper and Gold Prospect
Tamarok exploration work has been suspended since January 2012 as the
initial scout drilling results were not encouraging. The decision
to
suspend the work was to focus exploration resources on other
projects.
Heads of Agreement with Mindoro and Foyson
TVI has entered into two heads of agreements (HOA) with Mindoro
Resources Ltd. (Mindoro or MRL), a TSX Venture Exchange ("TSXV")
listed
issuer (TSX VENTURE:MIO), also listed on the ASX (ASX:MDO), who
is
engaged in mining exploration in the
Philippines, and Foyson Resources
Limited (Foyson), an Australian Securities Exchange ("ASX")
listed
issuer (ASX:FRL) operating in the resource industry in Papua New
Guinea. The HOA, dated July 6,
2012 and August 17, 2012,
respectively,
set out the terms of various proposed transactions consisting of
loan
to, acquisition of equity interests by way of private placement to
be
undertaken in two tranches for each company and joint ventures
with
Mindoro and Foyson (or affiliates).
On September 28, 2012, TVI acquired
ownership and control of 18,779,353
units of Mindoro by way of a private placement (Tranche 1) at a
price
of $0.05 per unit, for a total of
$938,968. On October 10, 2012, TVI
completed the purchase of an additional 24 million units of
Mindoro, at
$0.05 per unit, for an aggregate
purchase price of $1.2 million
(Tranche 2A). As at December 31,
2012, TVI holds an interest of 14.4%
in Mindoro and has spent $1,255,179
on option to purchase contracts
towards gaining an interest in the previously reported Agata and
Pan de
Azucar joint ventures. Prior extensive pre-feasibility and
engineering
works have been conducted on the Mindoro properties and can be
accessed
on Mindoro's website at www.mindoro.com or on SEDAR at
www.sedar.com.
The Mindoro properties offer significant growth opportunities,
including
near-term high iron (Fe) laterite and limestone direct shipping
ore
(DSO) operations for which development planning/permits are
well-advanced, a medium-term pyrite material DSO operation, a
medium-term lime production facility, and a medium-term nickel
(Ni)
processing plant for which a Project Execution/Technology
Development
team of highly experienced professionals is currently fast-tracking
a
Ni processing facility plant using an initial low-capex
leaching
technology approach.
An update to the NI 43-101 report prepared originally for
Mindoro,
together with a Feasibilty Study on the Hi Fe DSO operation, are
now
underway and are expected to be complete in the coming
weeks.
An update to the NI 43-101 report for the Ni processing
project,
prepared originally for Mindoro, is initially planned and will
be
followed by a full feasibility study. The feasibility study is
well
underway and is expected to be completed by the end of 2013.
Pending a
positive feasibility study and a decision to proceed, plant
construction is expected to commence in 2014 with the
commissioning/commercial production of nickel hydroxide product
in
2015, dependent on obtaining permits in a timely manner, among
other
things.
On August 28, 2012, TVI has completed
the first tranche of the private
placement (Tranche 1) with Foyson, wherein TVI acquired 68
million
shares representing 8.93% of Foyson's issued capital, at a
purchase
price of AUD$0.013 per share, for a total of AUD$884,000
($907,249).
As at December 31, 2012, TVI holds an
interest of 8.93% in Foyson and
has spent AUD$690,109 ($706,343) on
option to purchase contracts
towards gaining an interest in the previously reported Amazon Bay
and
New Britain joint ventures. Amazon Bay is a vanadium/titanium
rich
mineral sands property while New Britain is a copper porphyry, and
both
are located in Papua New
Guinea.
In February 2013, both Foyson and TVI
have agreed to amendments to the
Tranche 2 subscription agreement. Under the amended Tranche
2
agreement, TVI will subscribe for 142,857,143 Foyson shares at
A$0.007
(A$1 million in the aggregate).
Foyson will also issue 80 million
options to TVI, exercisable at $0.015, prior to December
31, 2014.
Completion of the Tranche 2 placement is subject to Foyson's
shareholders' approval and a meeting that Foyson will convene on
or
before April 18, 2013. On
completion of the Tranche 2 placement, TVI
will hold approximately 29.5% of the listed shares in Foyson (on
a
fully diluted basis).
About TVI Pacific Inc. (TSX:TVI) (OTCQX:TVIPF)
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 towards production in 2014.
TVI is a
partner/operator in several joint venture projects in the Philippines
and Papua New Guinea and also has
an interest in an offshore Philippine
oil property.
Yulo Perez, Chief Operations
Officer, TVIRD, a qualified person as
defined by NI 43-101, has approved the scientific and the
technical
information contained within this press release.
The Toronto Stock Exchange has neither approved nor disapproved
of the
information contained herein.
Cautionary Statement - Forward-Looking Information
Certain statements in this Press 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 are based upon the opinions and
expectations
of TVI as at the effective date of such statements and, in
certain
cases, information received from or disseminated by third
parties.
Although the Company believes 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 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
and development 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).
Forward-looking statements regarding forward production costs
and
shipping and refining costs are based on current and previous
mineral
reserve and resource estimates, current mining and processing
activities, prior experiences of management with mining and
processing
activities, the current development and operating plan, efficiency
and
effectiveness of the sulphide plant, and the Company's overall
plans,
budget and strategy for Canatuan (which are all subject to
change).
Forward-looking statements regarding the remaining mine life
and
resources/reserves of the Canatuan deposit are based on current
and
previous mineral reserve and resource estimates, current mining
and
processing activities, prior experiences of management with mining
and
processing activities, the current development and operating
plan,
efficiency and effectiveness of the sulphide plant, and the
Company's
overall plans, budget and strategy for Canatuan (which are all
subject
to change). Forward-looking statements respecting the copper and
zinc
concentrate shipping volumes and the timing of future shipments
are
based on the Company's previous experience with concentrate
shipments,
current mining and processing activities, current and previous
mineral
reserve and resource estimates, discussions to date with the
off-take
partner, efficiency and effectiveness of the sulphide plant, and
the
Company's overall plans, budget and strategy for Canatuan (which
are
all subject to change). Forward-looking statements regarding
the
timing and nature of exploration and drilling activities in the
Greater
Canatuan Tenement Area (including EXPA 61, Malusok and SE
Malusok),
Tamarok and the Company's other tenements in the Philippines and Papua
New Guinea are based upon current and previous exploration
activities,
management's experience with other exploration programs undertaken
in
the Philippines, Papua New Guinea and elsewhere, and the
Company's
overall plans, budget and strategy (which are all subject to
change).
In certain cases, the timing of exploration activities in
the
Philippines and Papua New
Guinea is dependent upon the receipt of free
prior informed consent from indigenous communities and
regulatory
approvals from the governments of the
Philippines and Papua New
Guinea.
Forward-looking statements regarding expectations that the Company
will
be able to find additional ore in the Greater Canatuan Tenement
Area
(including EXPA 61, Malusok and SE Malusok) and that this ore can
be
economically transported to the existing Canatuan mill are based
upon
current and previous exploration activities, management's
experience
with other exploration programs undertaken in the Philippines and
elsewhere, management's current and previous experience with mining
and
processing activities at Canatuan, and the Company's overall
plans,
budget and strategy (which are all subject to change).
Forward-looking
statements regarding the Company's expected metal production
and
capital expenditures for 2013, and its ability to continue to
generate
revenue from its operations are based on current mining and
processing
activities at Canatuan, current throughput of the sulphide
plant,
anticipated recoveries, efficiency and effectiveness of the
sulphide
plant, management's prior experiences with mining and processing
at
Canatuan, the estimated copper and zinc mineralization of the
sulphide
zone at Canatuan, current and previous exploration, and the
Company's
overall plans, budget and strategy (which are all subject to
change).
The forward-looking statements of the Company contained in this
News
Release are expressly qualified, in their entirety, by this
cautionary
statement. Various risks to which the Company 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,
2012 which was filed on SEDAR on March 19, 2013 and is available under
the Company's profile at www.sedar.com. Subject to applicable
securities laws, the Company does not undertake
any obligation to publicly revise the forward-looking
statements
included in this news release to reflect subsequent events or
circumstances. 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.
SOURCE TVI Pacific Inc.