CALGARY, ALBERTA--(Marketwire - Nov. 27, 2007) - TVI Pacific Inc.
(TSX:TVI) ("TVI" or the "Company") today released third quarter
operating statistics for the Canatuan Mine, located in the southern
Philippines, operated by affiliate, TVI Resource Development (Phils)
Inc. ("TVIRD").
During the third quarter, the Canatuan mine produced 10,287 gold
equivalent ounces ("AuEqOz") of metal, compared with 15,437 AuEqOz in
the second quarter of 2007 and 15,698 AuEqOz in the same period in 2006.
On a year-to-date basis, the Canatuan Mine produced 39,032 AuEqOz of
metal compared with 42,975 AuEqOz produced during the nine-month period
ended September 30, 2006. Production during the third quarter consisted
of 8,079 ounces of Gold ("Au") and 118,654 ounces of Silver ("Ag").
Despite the record amount of ore processed in the second quarter of
2007, third quarter results were negatively affected by an extended
repair shutdown for one of the two ball mills and limited access to
higher grade ore during the unusually heavy rainy season. The Canatuan
Mine is continuing with initiatives to increase mill throughput and
reduce costs at the mine for the remainder of 2007. These initiatives
will be implemented in order to partially offset the impact of expected
lower ore grades during the final period of Gossan operations before the
Sulphide Project (copper/zinc concentrate production) commences.
Certain information set out in this News Release constitutes
forward-looking information, including information relating to (i)
anticipated production levels for gold and silver in the fourth quarter
of 2007, (ii) the resumption of processing of higher grade ore during
the fourth quarter of 2007, (iii) declines in ore grades and production
volumes as the gossan reserve at Canatuan is exhausted, (iv) available
tailings capacity at Canatuan, and (v) the anticipated timing of
production from the sulphide zone underlying the gossan reserve. Readers
should review the cautionary statement respecting forward-looking
information that appears at the end of this News Release.
"In response to a challenging third quarter for Canatuan Mine
operations," said Clifford M. James, TVI President and CEO, "we have
taken aggressive measures to further improve productivity and reduce
operating costs. Current mine operations, for the most part, continue in
line with our expectations and ahead of the initiation of the Sulphide
Project in 2008."
The following table summarizes the Canatuan Mine's operating statistics for
the periods presented.
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Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 % chg over
Q2/07
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Mill throughput
(dry metric
tonnes):
Total ore
processed 129,758 165,394 181,829 172,129 189,813 179,630 -5%
Average daily
throughput 1,426 1,798 1,976 1,913 2,086 1,953 -6%
Feed grade
(grams per
tonne):
Gold (Au) 3.39 2.68 2.04 1.85 1.90 1.58 -17%
Silver (Ag) 60.96 42.85 40.52 76.59 67.46 36.18 -46%
Production
volume (ounces):
Gold (Au) 12,613 12,730 10,719 8,930 10,587 8,079 -24%
Silver (Ag) 154,838 157,550 155,392 214,282 243,296 118,654 -51%
Gold equivalent
ounces (AuEqOz) 15,636 15,698 13,904 13,308 15,437 10,287 -33%
Recoveries:
Gold (Au) 89.17 89.45 89.76 87.39 91.08 88.53 -3%
Silver (Ag) 60.89 69.14 65.6 50.55 59.10 56.79 -4%
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Gold equivalent values are based on ratios calculated by dividing combined
revenues for gold and silver by the prevailing average gold price at the
time of determination.
During the second quarter of 2007, the Canatuan Mine set a
production record for mill throughput, averaging 2,086 dry metric tonnes
per day. Compared with the nine-month period ended September 30, 2006,
the Canatuan Mine increased mill throughput by 32% during the same
period of 2007 (541,572 dry metric tonnes in 2007 versus 409,351 in
2006). A number of new initiatives, designed to optimize mill
production, are under way at Canatuan, in an effort to further improve
mill throughput. During the five-week ball mill shutdown early in the
third quarter, average daily throughput was reduced by approximately
30%. Despite the ball mill repair shutdown, mill throughput averaged
1,953 dry metric tonnes per day in the third quarter, largely due to
achieving record mill throughput volumes approaching 2,400 dry metric
tonnes per day after the ball mill repairs were completed.
During the third quarter of 2007, unusually heavy precipitation
adversely affected haul roads and pit bottoms, particularly in areas
where higher grade ore is mined. As a result, most of the mill feed
during the third quarter was taken from lower grade stockpiles, which
are ordinarily blended with higher grade ores from active pits. TVI has
carefully reviewed the remaining gossan ore reserves at the mine and
expects to resume blending and processing of higher grade ore during the
fourth quarter. As the gossan operations approach the end of reserve
life, the Company expects that ore grades will gradually decline and
that metal production will reduce accordingly.
Feed grade during the third quarter of 2007 was 1.58 grams per tonne
("gpt") of gold and 36.18 gpt of silver, compared with 2.68 gpt of gold
and 42.85 gpt of silver during the third quarter of 2006. Over the past
year, the feed grade has decreased which is expected as the remaining
gossan reserves have increasingly lower grades. In addition, the nature
of the feed has changed in that the chalcocite and sulphide content of
the gossan ore has increased as mining operations approach the massive
sulphide zone underlying the gossan reserves. The presence of chalcocite
and sulphides in the ore has caused a reduction in recoveries and has
required the use of more cyanide. By increasing mill throughput volumes,
and by blending gossan ore from different areas within the current pit
(blending material both high and low in chalcocite and sulphides and
both higher and lower grades), TVI has, to date, been able to mitigate
the impact of these changes in the nature and feed grade of the ore on
metal production levels.
During the second quarter of 2007, gold recovery reached a record
high, averaging 91.08%, and silver recovery averaged 59.10%. In the
third quarter, gold recoveries declined slightly to 88.53%, in line with
historic recovery rates, while silver recoveries of 56.79% were
comparable to year-to-date recoveries but lower than the prior year due
to the change in ore grades. A significant portion of third quarter mill
throughput was taken from lower grade stockpiles as access to higher
grade run of mine material was restricted due to unusually heavy
precipitation.
Production was also adversely affected by limited tailings capacity
during the second quarter as the gossan dam approached capacity. TVI had
initially planned to begin discharging tailings into the newly
constructed sulphide dam, in compliance with local environmental
standards. After careful consideration, however, the Company decided to
raise the gossan dam instead, as part of its ongoing commitment to
protect the environment. The gossan dam lift was completed in the third
quarter.
During the third quarter of 2007, TVI initiated a comprehensive cost
reduction program for all of its operations and administrative offices.
At the Canatuan Mine, TVI is targeting to reduce cash production costs
by twenty-five percent or more while continuing to increase mill
throughput.
For additional information on the Canatuan Mine, please refer to the
National Instrument 43-101 ("NI 43-101") technical report prepared by
Geostat Systems International Inc. ("Geostat"), which was filed with
certain securities regulatory authorities in Canada on August 21, 2006
and is available on the SEDAR website at
www.sedar.com. The Geostat report assesses the gossan mineral reserves and resources at the Canatuan deposit.
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 the Philippines and other Asian countries. The
Company's interest in the Canatuan Mine and its other Philippine assets
are held through its affiliate, TVI Resource Development (Phils.) Ltd.
("TVIRD"). TVI's most advanced project, the Canatuan Mine, currently
produces gold and silver dore.
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 through the SEDAR website at
www.sedar.com.
The Canatuan sulphide project includes a copper-zinc bearing massive
sulphide zone underlying the gossan zone currently being mined at
Canatuan. Construction of the sulphide project is underway and TVI plans
to be in production in mid-2008. The Company is currently arranging
financing for the sulphide project.
TVIRD also holds a 2.5% net smelter royalty on the Philippine-based
Rapu Rapu project operated by Lafayette Mining Ltd. as well as other
significant land positions in the Philippines. TVIRD is focusing its
exploration efforts on expanding the mineral resource base near the
Canatuan Mine and on the Balabag project, for which the Company recently
released a resource estimate that has been filed on SEDAR.
Through a wholly-owned Chinese subsidiary, the Company has 2,394 km2
of land under application in China in the Golden Triangle and in the
Tibet Autonomous Region.
TVI's drilling business operates a fleet of 21 drill rigs, providing
contract drilling services to the Company's exploration projects and to
third parties. The drilling business provides the Company with priority
access to drilling equipment at low costs and the opportunity to
generate cash flow from third party contracts.
Andrew Bradfield BSc, P.Eng., Vice President, Operations of TVI
Pacific Inc., serves as TVI's "Qualified Person" (for purposes of
National Instrument 43-101 - Standards of Disclosure for Mineral
Deposits) on the Canatuan project and has reviewed this News Release.
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 obtained from third party sources 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 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 in 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 anticipated production
levels for gold and silver at Canatuan in the fourth quarter of 2007 is
based upon production levels achieved during the first, second and
third quarters of 2007, the anticipated effects of current initiatives
designed to increase mill throughput, resumption of processing of higher
grade ore and availability of tailings capacity.
Forward-looking
information respecting the resumption of processing of higher grade ore
during the fourth quarter of 2007 is based upon assumptions relating to
weather patterns. Forward-looking information respecting declines in ore
grades and production volumes as the gossan reserve at Canatuan is
exhausted is based upon independent third-party reports as to the nature
and extent of the gossan mineral reserve at Canatuan, the results of
mining operations at Canatuan to date and the experiences of management
with similar mining operations in other areas. Forward-looking
information respecting available tailings capacity at Canatuan is based
upon independent third-party reports as to the nature and extent of the
gossan mineral reserve at Canatuan and independent third-party
engineering advice respecting the capacity of newly constructed
containment facilities at Canatuan. Forward-looking information
respecting the anticipated timing of production from the sulphide zone
underlying the gossan reserves at Canatuan, is based upon the status of
negotiations concerning financing of the sulphide project, the status of
TVIRD's program to source equipment for the expansion of the Canatuan
mine, progress made to date in the construction of the sulphide plant at
Canatuan, management's experiences with the construction of the gossan
processing facility at Canatuan, the current business plan developed by
the Company and the Company's current budget and overall strategy for
the Canatuan mine, which plans, budget and strategy 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
Annual Information Form for the year ended December 31, 2006, which was
filed on SEDAR on March 29, 2007 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.