- Operating Revenue - $10.5 million in Q1/07 vs $8.8 million in Q1/06
- Cash Flow From Operations - $1.3 million in Q1/07 vs $2.7 million in Q1/06
- Canatuan Mine Net Income - $2.4 million in Q1/07 vs $1.4 million in Q1/06
- April Mine Performance Shows Significant Advance Leading Into Q2
CALGARY, ALBERTA--(CCNMatthews - May 15, 2007) - TVI Pacific Inc.
(TSX:TVI) ("TVI" or the "Company") today announced solid consolidated
financial results for the first quarter of 2007 compared to the same
period last year. The Company posted total operating revenue of $10.5
million compared with $8.8 million; Cash flow from operations of $1.3
million compared with $2.7 million. The Canatuan Mine posted an increase
in net income of 67% to $2.4 million. However, allocation of cash to an
aggressive exploration program, primarily at Balabag (now approximately
80% complete) resulted in a consolidated net loss of $838,060 for the
quarter. All dollar amounts set out in this news release are expressed
in Canadian currency unless otherwise noted. The Company's President and
CEO will provide commentary, via a pre-recorded webcast presentation,
of these results along with an update on operations and exploration May
15, 2007.
"Our solid financial performance for the first quarter of 2007 has
provided a continuing platform for growth and expansion," said Cliff
James, TVI's President and CEO. "First quarter earnings and cash flow
financed a dramatically expanded exploration program, compared with the
same period last year, as well as initial expenditures on the Sulphide
Expansion Project, which is expected to be the cash flow engine for TVI
for next year and for years to come."
In addition, TVI's Philippines affiliate, TVI Resource Development
(Phils) Inc. ("TVIRD") completed a number of changes to the Canatuan
plant during Q1 which are expected to increase the overall financial
performance of the plant for the balance of the year. These changes to
the plant had a short term adverse effect on performance during the
first quarter due to plant down time during modification. The positive
effect of the changes was demonstrated in April, during which a daily
average of 207 gold equivalent ounces ("AuEqOzs") was produced, which
was significantly higher than the average daily production of 148
AuEqOzs for the first quarter. Increased daily throughput and metal
production is expected to lower overall costs of metal produced (on a
unit of production basis), thereby increasing overall financial
performance.
Financial Review
Highlights for the three-month period ended March 31, 2007 include:
- Total operating revenue of $10,486,198 compared with $8,774,290 for the three-month period ended March 31, 2006
- Cash flow from operations of $1,348,354 compared with cash flow from operations of $2,700,148 for the same period in 2006
- Canatuan mine revenues of $10,231,530 in the first quarter, compared with revenues of $7,290,418 for the same period last year
- Canatuan mine net income of $2,413,368 for the first quarter,
compared with net income for the mine of $1,442,784 in the same period
last year
- The Canatuan mine produced 8,930 oz of Au and 214,282 oz of Ag for
the first quarter, compared with 9,148 oz of Au and 140,727 oz of Ag
during the same period last year. On a gold equivalent basis, the
Canatuan mine produced 13,308 AuEqOz in the first quarter, an increase
of 14% compared with 11,641 AuEqOz for the same period last year
- Net loss of $(838,060), compared to net income of $575,753 in the
same period last year as exploration expenditures were increased
significantly to $1,571,224 in the quarter compared with $667,929 for
the same period in 2006. Net loss per share was $(0.002) on a diluted
basis, compared with a net income per share of $0.0015 in the same
period last year
-- Exploration expenses were unusually high for the first quarter,
primarily as a result of a decision by the Company to accelerate
exploration at the Balabag property in order to complete enough drilling
for a scoping study to be conducted. The drilling was completed during
the quarter and the scoping study is currently underway, and is expected
to be completed during the second quarter. In addition, materials,
supplies and labour costs associated with the Sulphide Project
construction have increased significantly as the new processing plant
moves ahead with construction. Overall Company exploration expenses are
expected to decrease significantly in the second quarter.
Significant additional financial information includes:
- Cash balance of $749,156 as at the end of March 2007, compared with a cash balance of $1,565,854 as at December 31, 2006
- Working capital deficiency was $(2,631,291) at March 31, 2007
compared with a working capital deficiency of $(705,813) at December 31,
2006
- Total assets increased to $25,293,274 at March 31, 2007 compared with $23,601,822 at December 31, 2006
- Administrative and general expenses increased in the first quarter to $971,126, from $445,387 for the same period in 2006
- The Company's Drilling Business Unit (conducted through TVI's
subsidiaries Exploration Drilling Corp. and Hunan Pacific Drilling)
produced consolidated (which eliminates inter-company revenues and
profits generated from TVIRD's own work) net income and revenues of
$(514,624) and $254,668, respectively, for the three months ended March
31, 2007, compared with $416,683 and $1,415,553 in the same period in
2006.
-- The Drilling Business Unit completed 5,138 metres (4,021 metres
for TVIRD's own work) of drilling during the first quarter 2007,
compared with 10,368 metres (786 metres for TVIRD's own work) during the
same period last year. The significant increase in metres drilled for
the Company's own work is related to the Balabag Prospect.
-- Overall, the results for the Drilling Business Unit were lower
than expected, mainly as a result of fewer than expected third party
contracts materializing during the quarter. However, a number of
contracts have recently been signed and results are expected to improve
in the second quarter and for the balance of the year. The Drilling
Business Unit has expanded its marketing efforts, which has resulted in
two new contacts in Kyrgyzstan that are expected to start up operations
in the second quarter of 2007. Furthermore, additional work in China and
the Philippines is anticipated for the second quarter
Outlook
At the Canatuan mine, high sulphide content was encountered in the
gossan ore during the first quarter of 2007, causing both recovery and
cost issues. These issues have been addressed and the operating results
for the early part of the second quarter are showing improvements as
evidenced by April performance figures. Record metal prices have
continued, and there are expectations that the high price environment
will continue in the near term. The targeted increases for throughput in
2007 at the Canatuan mine are expected to exceed that of 2006, and
would therefore allow for lower overall production costs (on a unit of
production basis) and an increase in financial performance figures;
however, lower grades are expected to result in similar production
levels for gold and silver year-over-year. The planning, development and
construction of the sulphide plant is well underway with construction
scheduled to be completed in early 2008. The Company has been able to
attract a number of financing proposals for the sulphide project as a
result of continuing strong metal prices and investor confidence in the
Company's operating capabilities, as demonstrated by the continued
successful operation of the Company's main asset, the Canatuan Mine, as
well as confidence in the Company's ability to construct and operate the
next phase of development in a timely and cost-effective manner. It is
expected that one of these proposals will be selected in the near term.
Management believes that financing for the sulphide plant is expected to
be completed in the second quarter 2007. Exploration on existing and
new properties is expected to increase towards the end of 2007 as the
Company expands its portfolio of properties in the Philippines. A second
infill drilling program on the Balabag property, which is approximately
75 km north-east of the Canatuan mine, will commence late in 2007 after
the scoping study has been completed. The scoping study, which is being
prepared by an independent third party, is to derive key operating,
engineering, costing and economic parameters to be used, if positive,
for a conceptual open-pit, stand alone mining operation anticipated on
the Balabag property going forward. Exploration in China has been
reduced while awaiting approval on exploration applications. The
Company's drilling business experienced a slower-than-anticipated start
in 2007; however, successful marketing efforts are producing improved
results in the second quarter, with new drilling contracts having been
received for the balance of the year.
Webcast
Due to technical issues with the Company's new server, the
previously announced webcast presentation of the first quarter results,
including a quarterly review of operations, exploration and drilling,
will be made available to the public late in the afternoon of May 15th,
2007, when the technical issues are expected to be resolved. We
apologize for the inconvenience.
To listen to this event, please enter the following link into your
web browser approximately 10 minutes prior to the start of the webcast.
Information links will also be provided for any system requirements and
software needed.
www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1844260
For those who are not able to listen to the webcast on the day of
the event, an archived version will be available for a 90 day period and
can be accessed using the same link above.
An electronic copy of TVI's corporate presentation that accompanies
the first quarter results will be made available on the Company's
website http://tvi2014.q4web.com/presentations)
in the late afternoon on May 15th, 2007. Listeners are encouraged to
follow along with the slides while listening to the webcast.
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.
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 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.
The financial information set out in this release should be read in
conjunction with the consolidated, unaudited interim financial
statements of the Company as at and for the period ended March 31, 2007
and related Management Discussion and Analysis which have been filed
with certain securities regulatory authorities in Canada and are
available on the SEDAR web site at www.sedar.com and on the Company's website at tvi2014.q4web.com. Wherever used in this News Release, Gold equivalent values were calculated applying a 57 to 1 Ag to Au ratio.
Certain statements in this News Release contain forward-looking
information, including statements respecting anticipated increases in
overall performance of the Canatuan plant for future periods,
expectations relating to the impact of increased throughput and metal
production at Canatuan on future costs and financial performance, timing
of completion of a scoping study at Balabag, expectations relating to
exploration expenses in the second-quarter, expectations relating to the
performance of the Company's Drilling Business for future periods,
expectations concerning commodity prices for future periods,
expectations concerning the financing of the Sulphide Project at
Canatuan (including the timing thereof), expectations relating to the
timing of completion of the Sulphide Project at Canatuan, expectations
relating to exploration activities in the Philippines for future periods
and expectations relating to the timing of future exploration
activities at Balabag.
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. 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.