Consolidated Audited Financial Results:
- Cash Flow From Operations - 780% Increase
- Operating Revenue - 152% Increase
- Net Income - $1.8 Million Compared With A Loss Of $3.1 Million In 2005
CALGARY, ALBERTA--(CCNMatthews - March 28, 2007) - TVI Pacific Inc.
(TSX:TVI) (the "Company") today announced record annual financial
results for the year ended December 31, 2006. The Company posted an
increase of 152% in total operating revenue to $44.5 million; an
increase of 780% in cash flow from operations to $10.2 million; and an
increase in net income to $1.8 million compared with a net loss of $3.1
million in 2005. These results are based on a successful year for
production and cash flow at the Canatuan mine in the Philippines, and
earnings from the revitalized international drilling business operated
through TVI's affiliates, Exploration Drilling Corporation and Hunan
Pacific Drilling. All dollar amounts stated in this news release are
expressed in Canadian currency.
The information provided in this News Release should be read in
conjunction with the Company's consolidated, audited financial
statements and Management Discussion and Analysis for the year ended
December 31, 2006, which have been filed on Sedar and are available
under the Company's profile at www.sedar.com, and on the Company's website at tvi2014.q4web.com.
"The operating and financial successes achieved at Canatuan in 2006
have allowed us to plan for the next level of expansion and growth,"
said Clifford M. James, TVI President and CEO. "The financial
contribution from the Canatuan mine has provided TVI Pacific with a
strong platform from which we are now pursuing the Sulphide Copper-Zinc
expansion project. We are also exploring aggressively at Balabag and
Tamarok-Tapisa, and assessing various prospects for their potential as
sources of ore for the Canatuan processing facility."
Financial Review
Highlights for the year ended December 31, 2006 include:
- Total operating revenue of $44,457,296 compared with $17,669,327 for the year ended December 31, 2005.
- Cash flow from operations of $10,150,995 compared with cash flow from operations of $1,153,289 for 2005.
- Canatuan mine cash flow from operations of $18,052,926 on revenues
of $39,377,338 in 2006, compared with mine cash flow from operations of
$4,536,815 on revenues of $14,634,699 for 2005.
- Canatuan mine net income of $10,721,296 compared with net income for the mine of $1,107,417 in 2005.
- The Canatuan mine produced 45,210 oz of Au and 608,507 oz of Ag in
2006, compared with 19,535 oz of Au and 445,859 oz of Ag during 2005.
On a gold equivalent basis, the Canatuan mine produced 56,880 AuEqOz in
2006, an increase of 112% compared with 26,830 AuEqOz for the same
period last year. The average price received in 2006 for an oz of Au was
$687.00 (2005 - $548.03) and for oz of Ag was $13.12 (2005 - $8.84)
which were used in the calculation of AuEqOz.
- The Canatuan mine average cash cost per AuEqOz was $369 compared
with $371 in 2005. Total cost per AuEqOz was $511 in 2006, compared to
$499 in 2005.
- Net income of $1,813,411 compared with net loss of $3,097,956 in
2005. Net income per share was $0.005 on a diluted basis, compared with a
net loss per share of $0.009 in 2005.
Significant additional financial information includes:
- Cash balance of $1,565,854 as at December 31, 2006, compared with a cash balance of $476,097 as at December 31, 2005.
- Working capital deficiency was $(705,813) at December 31, 2006
compared with a working capital deficiency of $(2,580,471) at December
31, 2005.
- Total assets increased to $23,601,822 at December 31, 2006 compared with $18,698,253 at December 31, 2005.
- Exploration expenses of $4,059,287 were incurred in 2006, compared with $1,716,407 for 2005.
- Administrative and general expenses increased in 2006 to $3,580,690, from $2,717,362 for 2005.
- On a consolidated basis, which eliminates inter-company revenues
and profits (ie. revenues generated from TVI's own work), the Drilling
Segment produced cash flow, net income and revenues of $1,031,934,
$671,840 and $5,066,972, respectively, for 2006, compared with $207,355,
$40,758 and $3,004,923 in 2005.
- The Drilling Segment completed 16,847 meters of drilling for TVI
during 2006 (out of a total 58,946 for the year), compared with 143
meters in 2005 (out of a total 19,370 for 2005).
Certain information set out in this News Release constitutes
forward-looking information, including outlook information for TVI
Pacific for 2007, anticipated timing for completion of the Canatuan
Sulphide Project and startup of the Sulphide plant, 2007 exploration
activity in the Philippines, the timing of an internal scoping study in
relation to the Balabag prospect, assessment of other projects and
properties in connection with the Company's efforts to acquire advanced
stage properties/projects, expectations relating to the consolidation of
the accounts of various Philippines entities within the TVI Pacific
group, and the timing of recognition of a non-controlling interest on
the consolidated income statement of TVI Pacific and recognition of a
corresponding liability on the consolidated balance sheet of TVI
Pacific.
Outlook
The 2007-year is expected to be a period of expansion for TVI
Pacific. TVI's 2007 business plan identifies the construction of the
Canatuan Sulphide Project as a primary objective for the year. At the
same time, the 2007 business plan anticipates that the main focus for
exploration will be near mine exploration in the vicinity of Canatuan,
where the Company is evaluating various prospects as possible sources of
ore for the Canatuan facility.
The Company has allocated funding for additional exploration work at
the Balabag prospect, assuming continued encouraging drill results from
the Balabag property. An internal scoping study is planned in 2007 for
this project. A prior news release concerning exploration plans for the
Company's Balabag prospect was issued March 1, 2007.
In 2007, management expects that the Company will also actively
assess other projects and properties with the objective of acquiring
advanced stage properties/projects. Additional details regarding the
Company's acquisition plans were outlined in the news release issued by
the Company on March 2, 2007.
The mining industry faces many
challenges in 2007, as producers try to replace and increase ore
reserves and resources in a high commodity price environment. Management
believes TVI is well positioned for growth in 2007 and has the
manpower, technical expertise and financial resources to do so.
About TVI Pacific Inc. (TSX:TVI)
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 Asia.
In the Philippines, TVI's most advanced project, the Canatuan Mine
(the first foreign-invested, new, mining project in the Philippines
since the passage of the Philippine Mining Act of 1995) began mining and
milling operations in mid-2004, producing gold and silver dore through
its affiliate TVI Resource Development (Phils.) Ltd. ("TVIRD"). In 2006,
TVIRD received a completed NI 43-101 feasibility study on the Canatuan
Sulphide project prepared by Norwest Corporation. The report has been
filed with certain securities regulatory authorities in Canada and is
available at the SEDAR website at www.sedar.com.
The Norwest study addresses the copper-zinc bearing massive sulphide
zone, or lower portion of the Canatuan Deposit. Construction of the
Sulphide Project at Canatuan is now underway. In addition, TVIRD holds a
2.5% NSR on the Philippine-based Rapu Rapu project operated by
Lafayette Mining Ltd. Exploration in the Philippines is being conducted
at Canatuan, in an effort to expand TVIRD's mineral resource base and to
find new deposits, at Balabag and at other areas which management of
TVI view as compelling exploration properties.
TVI Resource Development (Phils), Ltd. ("TVIRD"), is the principal
operating vehicle of the TVI Pacific group in the Philippines. TVI
Pacific indirectly owns 40% of the outstanding voting shares of TVIRD,
through a wholly owned subsidiary, TVI International Marketing Ltd.
("TVI Marketing"). TVI Marketing owns 40% of the outstanding voting
shares of 19 other Philippines incorporated companies (together with
TVIRD, the "Philippines Entities") and TVIRD owns the balance of the
outstanding shares of each of those companies. For financial statement
purposes, TVI Pacific consolidates the accounts of the Philippines
Entities, which are classified as "variable interest entities", as TVI
Pacific is recognized as the primary beneficiary. TVI Pacific expects to
continue to consolidate the accounts of the Philippines Entities until
such time as the cumulative losses of those entities are recovered. As
at December 31, 2006, such cumulative losses were estimated at $14.2
million. Following recovery of the cumulative losses, TVI Pacific will
be required to record a non-controlling interest on its income statement
(and a corresponding liability on its balance sheet) in connection with
the consolidation of the accounts of the Philippines Entities, which
will result in only 40% of the net income generated by TVIRD being
included in the consolidated net income of TVI Pacific. At this time,
TVI Pacific is not able to accurately project when it may be required to
recognize the non-controlling interest on its income statement and the
related liability on its balance sheet. Depending upon the timing of
certain events, the non-controlling interest and related balance sheet
liability may be reflected in the financial statements of the
Corporation as at and for the year ending December 31, 2007.
In China, TVI's wholly-owned Chinese subsidiary, Hunan Pacific
Geological Exploration Inc. ("HPGEI"), was the first foreign mining
company to be granted both WOFE status and a Qualified Explorer License.
The exploration program in China is focused primarily within the Golden
Triangle area, a highly prospective metallogenic region in China's
south-western provinces of Yunnan, Guizhou and Guangxi Autonomous Region
and prospective areas in the Tibet Autonomous Region. HPGEI has 2,394
sq kms of land under application in China in the Golden Triangle and in
the Tibet A.R.
TVI also has a Drilling Segment consisting of Exploration Drilling
Corporation ("EDCO"), a wholly-owned subsidiary of TVI Pacific Inc.
based in the Philippines, and Hunan Pacific Drilling ("HPD"), a segment
of HPGEI based in China, which generates revenue from contract drilling.
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 Company believes that the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions and that information provided 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 events or 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 to 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 Outlook for TVI Pacific for 2007 is based upon the 2007 business
plan of the Company, which is subject to change, the existing financial
resources of the Company, management's expectations relating to the 2007
business and economic environment in the Philippines and elsewhere, and
the continuance of the existing commodity price environment throughout
the 2007 financial year. Forward-looking information relating to the
construction of the Canatuan Sulphide Project and the timing of
completion of that project is based upon the 2007 business plan of the
Company, which is subject to change, the availability of financial
resources and third-party financing to support construction of the
Sulphide Project, the availability of equipment and services, and the
receipt of all necessary regulatory approvals.
Forward-looking information respecting the assessment of advanced
stage properties/projects for acquisition is based upon the 2007
business plan of the Company, which is subject to change, and the
availability of financial resources, discussions and negotiations to
date with respect to possible acquisition opportunities. Forward-looking
information relating to the anticipated exploration activities at
Canatuan is based upon the results of prior exploration activities and
current exploration plans and budgets, which are, in turn, premised on
such things as the prices for precious metals and base metals, commodity
supply and demand, currency and interest rates, recoverability of
mineral reserves, timing, results and costs of development activities,
availability of financial resources or third-party financing, applicable
laws (domestic or foreign) and are subject to change. In certain cases,
the anticipated timing of exploration activities is dependent upon the
receipt of regulatory approvals from government authorities in the
Philippines. The Company has no control over the timing of processing of
applications for such regulatory approvals. Forward-looking information
respecting the consolidation of the accounts of various Philippines
entities within the TVI Pacific group and the timing of recognition of a
non-controlling interest on the consolidated income statement of TVI
Pacific and recognition of a corresponding liability on the consolidated
balance sheet of TVI Pacific is based upon management's understanding
of Canadian Generally Accepted Accounting Principles, advice received
from the Company's external auditors, estimates respecting the amount of
the cumulative losses of the applicable Philippines entities and
anticipated events that may give rise to recovery of such cumulative
losses. 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 (including exploration activities) are
described in detail in the Company's Annual Information Form for the
year ended December 31, 2006, which has been filed on SEDAR 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.
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.