TSX: TVI OTCQX: TVIPF
CALGARY, Aug. 12, 2014 /CNW/ - TVI Pacific Inc.(TSX: TVI) (OTCQX: TVIPF) ("TVI" or "the Company") today announced its unaudited, consolidated financial and operational
results for the quarter ended June 30, 2014.
For a thorough explanation of the points discussed in this news release,
shareholders are encouraged to read the unaudited interim consolidated
financial statements, prepared in accordance with International
Financial Reporting Standards ("IFRS"), and the management's discussion and analysis for the periods ended
June 30, 2014 and June 30, 2013 and the audited consolidated financial
statements for the years ended December 31, 2013 and 2012. These
documents were filed with certain securities regulators in Canada, and
are available on our web site (www.tvipacific.com or under our profile on SEDAR www.sedar.com).
Q2 2014 Highlights
Cash balance of $1.8 million at June 30, 2014.
No debt owing.
Net loss before interest, tax, depreciation and share of loss of
associates and joint ventures of $1.19 million.
Net loss of $1.9 million.
A working capital surplus of $7.4 million.
June 30, 2014
June 30, 2013
March 31, 2014
Gross revenue ($ million)
Net revenue ($ million)
Net loss ($ million)
Basic net loss per share
Cash balance at quarter end ($ millions)
Letters of credit and loan facilities ($ millions) (1)||
Working capital surplus ($ millions)
Average interest rate of: 2.00% for Q2 2013 and for year-end 2013. All
Letters of Credit |
and loan facilities have been fully repaid at December 31, 2013.
On December 27, 2013, the Philippine Securities Exchange Commission
approved an increase in the authorized capital stock of TVI's
Philippine operating affiliate, TVI Resource Development Phils., Inc.
("TVIRD"), which resulted in the subscribed ordinary shares being issued to
Prime Resource Holdings, Inc. ("PRHI") and a reduction in TVI's indirect interest in TVIRD and other
Philippine subsidiaries. This has further resulted in the
deconsolidation of TVIRD, Exploration Drilling Corporation ("EDCO") and interests in the Agata and Pan de Azucar joint venture entities.
TVI's continuing interest of approximately 30.66% in TVIRD is now
recorded as an investment in joint venture within the mining segment,
and accounted for using the equity method in the consolidated financial
statements. As such, revenues earned and related expenses incurred at
the level of TVIRD and its subsidiaries now result in an adjustment to
the investment account and therefore do not make financial results
directly comparable year-over-year.
In addition to retaining a 30.66% indirect interest in TVIRD and other
Philippine subsidiaries, TVI continues to directly hold (i) 23.01%
equity interest in Foyson Resources Limited ("Foyson") (ii) a 14.4% equity interest in Mindoro Resources Ltd. ("Mindoro" or "MRL"); (iii) its 10% interest in the Amazon Bay Iron Sands project (for
which the exploration license is held by Titan Mines Limited, a company
in which Foyson holds 50% shareholding and has an option to acquire the
remaining 50%); and (iv) its 100% investment in shares of TG World
Energy Corp. ("TG World").
Net income breakdown
||3 months ended|
June 30, 2014
|3 months ended|
June 30, 2013
Reported net loss
Interest expense and income taxes
Depreciation, depletion and accretion
Share of loss of associates and joint venture
Net loss before interest, taxes, depreciation and accretion, and|
share of loss of associates and joint venture
Adjusting for non-cash items, the net loss before interest, taxes,
depreciation and share of loss of associates and joint ventures is
reduced to $1.19 million for the three months ended June 30, 2014. The
share of loss of associates and joint venture represents TVI's proportionate share of losses recognized through the
quarter by Foyson and Mindoro, as well as TVI's 30.66% indirect
interest in TVIRD and the other Philippine subsidiaries.
TVI fully repaid all debt facilities as at December 31, 2013 and has not
incurred anything further as at June 30, 2014.
Cash reported at June 30, 2014 now includes only cash held at the level
of TVI and not within its affiliates, and includes also only the
proceeds received from PRHI through the First and Second Close. After
giving effect to the various investment and financing transactions
involving PRHI (the "Transactions"), following satisfaction of certain conditions outlined in the
definitive agreements executed by TVI, PRHI and others on December
11th, 2013, PRHI holds approximately 5% of the total number of issued
and outstanding common shares of TVI and 68.42% of the total number of
outstanding voting shares of TVIRD.
Further to the news release disseminated by TVI on July 8, 2014, TVI has
now completed the Final Close with PRHI which has resulted in the
release of all proceeds remaining in escrow, including:
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US $4.3 million for the purchase of 3.97% of the common shares of TVI
Minerals Processing, Inc.; and,
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US $1.23 million related to the sale and restructuring of subsidiaries
and Class A shareholders of TVIRD.
US $5.3 million of the above transactions have come through directly to
TVI in July 2014 as the repayment of intercompany advances, resulting
in an aggregate US $10.65 million to TVI as a result of the
Transactions and US $11.85 million to TVIRD and various subsidiaries,
each before tax and related fees.
Cash was augmented in the quarter by the receipt of remaining production
petroleum tax credits ("PPTC") in June of US $573,268 from the State of Alaska (the "State"). The areas previously explored by TG World for hydrocarbons in
Alaska qualified TG World to apply for PPTC, which are cash credits
funded by the State for previous exploration and seismic expenditures.
In addition to the $1.8 million held directly by TVI at June 30, 2014,
TVI's Philippine affiliates have a cash balance of $11.5 million. Cash
held directly by TVI's Philippine affiliates has been reclassified to Investment in Joint Venture in the consolidated financial statements, in proportion to the interest
retained by TVI, as a result of the transaction with PRHI through which
PRHI has assumed joint control of TVIRD with TVI.
June 30, 2014
June 30, 2013
March 31, 2014
Average tonnes processed per day
Ore copper grade (%)
Concentrate copper grade (%)
Concentrate gold grade (g/t)
Concentrate silver grade (g/t)
Concentrate zinc grade (g/t)
During the six months ended June 30, 2014, TVIRD completed its last
shipments of copper concentrate and zinc concentrate from the current
mining operations at Canatuan as ore reserves from the open pit have
been exhausted. The total gross revenue of TVIRD for the six months
ended June 30, 2014 was US $10.95 million (CAD $12.06 million), of
which only the 30.66% proportionate share of TVIRD's net loss has been
recognized in TVI's investment in joint ventures. The total net loss
of the mining segment in Q2 2014 and for the six months ended June 30,
2014, that has been deconsolidated is $2.1 million and $4.1 million,
Following the end of mining and processing operations in January,
decommissioning and rehabilitation activities within the disturbed
areas commenced. The second quarter activities have continued to focus
on the decommissioning of plant and equipment within the mill and
processing plant area and continuation of the progressive
rehabilitation activities within the overburden waste areas and the
surface mine area. The rehabilitation tasks include earthwork
stabilization, drainage controls and re-vegetation. Water quality
monitoring as well as meteorological data collection, hydrologic data
collection and instrumentation data collection for the Sulphide
Tailings Storage Facility Dam continued through the second quarter.
These activities will continue through the remainder of 2014.
Canatuan is owned 100% by TVIRD. TVI has a 30.66% indirect ownership
interest in Canatuan through TVIRD.
A key focus of TVIRD through the quarter, as operator of the Agata
Mining Joint Venture ("AMVI"), has been the commencement of site development and construction of
the port facility in June for the proposed direct shipping ore ("DSO") operation of the high-iron laterite resources at the Agata Project.
On April 28, 2014, AMVI announced it has received the Declaration of
Mining Project Feasibility ("DMPF") and clearance to develop a port facility for the proposed DSO
operation, receipt of which provides authorization to proceed to
development, including the extraction and sale of iron, nickel and
other associated minerals in the contract area, and builds on the
existing Environmental Compliance Certificate ("ECC") already held by the project. Shipping of the high-iron laterite is
expected to commence through the third quarter of 2014, subject to
receipt of remaining port approvals and financing.
As operator also of the Agata Processing Joint Venture ("APJV"), TVIRD is continuing to develop the definitive feasibility study on
nickel processing at Agata, which is expected to be complete through
the second half of 2014. Pilot plant testing by the Beijing General
Research Institute of Mining & Metallurgy ("BGRIMM") facility in China and at the TVIRD pilot plant in the Philippines has
Both the DSO and the nickel processing projects have been supported by
the updated National Instrument 43-01 ("NI 43-101") technical report filed by TVI on April 10, 2013, and entitled
"Independent Report on the Nickel Laterite Resource - Agata North,
Philippines", which reflects an updated and reclassified resource
estimate for the Agata North nickel laterite resource. The new resource
provides a robust foundation for moving forward, initially with a DSO
operation of high-iron limonite (upper laterite horizon), followed by
atmospheric leach processing of the underlying saprolite horizon.
Highlights of the updated NI 43-101 include:
An increase in Measured and Indicated resources to 33.9 million dry
metric tonnes at 1.1% nickel as compared to the previous 31.8 million
dry metric tonnes at 1.05% nickel;
Inferred resources are 2.0 million dry metric tonnes at 1.04% nickel;
Estimated contained nickel is 391 thousand tonnes.
At a cut-off grade of 44% iron, there are an estimated 7.0 million dry
metric tonnes, or approximately 10 million wet metric tonnes, at 48.5%
iron and 0.94% nickel - a DSO product grade much in demand in China.
TVI has a 30.66% indirect ownership interest through TVIRD in the
interest to be earned in the Agata Mining Option and Joint Venture and
the Agata Processing Joint Venture. TVIRD has the option to earn up to
a 60% interest in each of these projects by expending a minimum $2
million on each within 12 months of the date of each joint venture
agreement and by bringing the DSO operation into production and
completing a definitive feasibility study for a nickel processing
facility. As at June 30, 2014, TVIRD has earned 59% of shares in the
Agata Mining Joint Venture and 45% of shares in the Agata Processing
Joint Venture, which remain in escrow until satisfaction of the
As mentioned, TVI's continuing interest of approximately 30.66% in
TVIRD, as well as the indirect ownership interest to be earned through
TVIRD in the Agata Mining Option and Joint Venture and the Agata
Processing Joint Venture, is now recorded as an investment in joint venture within the mining segment, and accounted for using the equity method in
the consolidated financial statements. As such, revenues earned and
related expenses incurred at the level of TVIRD and its subsidiaries
now result in an adjustment to the investment account. Cash generated
also at the level of TVIRD, its subsidiaries and joint ventures, will
be accounted for directly at that level, and be used to fund activities
at that level, and will therefore not flow through directly to TVI but
may be expected to fund current and future operations and expansion
activities at the level of TVIRD, its subsidiaries and joint ventures
to further enhance the value of the investment.
For further information on TVI's operations please refer to the
Management's Discussion and Analysis available on TVI's website www.tvipacific.com or under our profile on SEDAR (www.sedar.com).
Other Direct Investments: Foyson Resources Limited and Amazon Bay
Following the quarter, TVI was advised that on July 25, 2014, its 10%
earned interest in Amazon Bay was formally registered with the Papua
New Guinea Mineral Resources Authority ("PNG MRA") after having been earlier approved by the Minister for Mining on June
5, 2014. Foyson Resources Limited ("Foyson"), with whom TVI has the Amazon Bay Iron Sands Joint Venture Project,
also announced on July 3, 2014, that the PNG MRA has renewed
exploration license EL1396, the key tenement covering the Amazon Bay
iron sands project on the southeast cost of PNG. Together with the
other approved Amazon Bay tenements, Foyson now has a land holding of
approximately 1,627 sq. km. In addition to the 10% earned interest in
Amazon Bay, TVI continues to hold a direct 23.01% equity interest in
Foyson. Through the quarter, a sampling program at Amazon Bay has been
completed, resulting in 600kg of samples being provided to a major
Chinese group in Beijing for metallurgical testing.
Subsequent to the quarter on July 25, 2014, TVI provided notice to
Foyson of its intent not to proceed with the Stage 2 farm-in of Amazon
Bay but renewed its commitment to assist Foyson in finding a cashflow
positive project, with synergies for its PNG operations. Foyson
announced July 4, 2014, that it has commenced exclusive negotiations
for a strategic relationship with Integrated Green Energy Pty Ltd ("IGE") to acquire and fund the commercialization of its plastics-to-diesel
technology, where the agreed strategy is to build four commercial-scale
waste plastic-to-diesel plants in eastern Australia over the next two
years. IGE is an Australian company located near Newcastle, New South
Wales, with a focus on the development of its waste conversion
technology to produce sustainable energy resources. The technology is
applicable to both processing non-recyclable and waste
plastics-to-fuels and for power generation in remote locations by
processing a hybrid biomass, and IGE is currently operating a
successful pilot plant, producing industry standard diesel suitable for
use in conventional diesel engines. IGE is seeking the necessary
funding to complete the first commercial facility at its Berkeley Vale
pilot plant site, which has full environmental approvals and can be
operational within six months of funding. Foyson has entered into a
120 day exclusivity period to complete due diligence, on the basis of
acquiring licenses to operate the technology on a global basis, with
exclusivity in some jurisdictions, including Australia.
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. TVI's affiliate,
TVIRD, has to date produced copper and zinc concentrates from its
Canatuan mine and is advancing its Agata Nickel DSO operation and its
Balabag Gold-Silver project. TVI is a direct or indirect
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.
The Toronto Stock Exchange has neither approved nor disapproved of the
information contained herein.
IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
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 TVI 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).
The forward-looking statements set out in this news release include
information relating to interests that may be earned by TVIRD in the
Agata joint ventures; opportunities for exploration, development and
commercialization of the Agata Mining Project. Related risks and
uncertainties include, but are not limited to: (A) results of further
work in pursuing the conceptual planning not supporting current
expectations as to the opportunities anticipated; (B) TVIRD not funding
the necessary expenditures at Agata to advance the project or earn an
interest under the joint venture agreement due to, among other things
(i) changes in TVIRD's strategic priorities, due diligence findings,
changes in laws or regulations affecting mining operations in the
Philippines (including the profitability of such operations), and other
factors, (ii) changes in TVIRD budgets and (iii) limited availability
of funds; (C) a determination on the part of TVIRD not to pursue
projects contemplated by one or more of the joint venture agreements
for technical, economic, legal or other reasons (including, without
limitation, a failure to obtain required permits or other governmental
or regulatory approvals); and (D) certain other risks identified
elsewhere in TVI's public filings, including, without limitation, those
risk factors set forth at pp. 66-74 of TVI's Annual Information Form
dated March 19, 2014.
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 contained in this News Release are
expressly qualified, in their entirety, by this cautionary statement.
Various risks to which TVI is exposed in the conduct of its business
are described in detail in the TVI's Annual Information Form for the
year ended December 31, 2013 which was filed on SEDAR on March 19, 2014
and is available under TVI's profile at www.sedar.com. Subject to applicable securities laws, TVI does not undertake any
obligation to publicly revise the forward-looking statements included
in this news release to reflect subsequent events or circumstances.
SOURCE TVI Pacific Inc.