(TSX: TVI)
CALGARY, Jan. 21 /CNW/ - TVI Pacific Inc. (TSX: "TVI" or the "Company")
announced today that it and its Philippine affiliate, TVI Resource Development
(Phils.) Ltd. ("TVIRD"), have signed a nonbinding term sheet (the "Term
Sheet") to secure funds with LIM Asia Arbitrage Fund Inc and LIM Asia Special
Situations Master Fund Limited ("the Lenders") relating to a US$15 million
bridge financing facility ("the Facility"). The Term Sheet indicates that the
purpose of the Facility will be to provide working capital funding for TVIRD
in the near term.
Certain information set out in this News Release constitutes
forward-looking information, including information relating to (i) the
anticipated use of proceeds from the Facility, and (ii) particulars of the
terms and conditions upon which the Facility is to be made available (such as
fees, interest rates, security arrangements, drawdown and Facility extension
at the election of TVIRD). Readers should review the cautionary statement
respecting forward-looking information that appears at the end of this News
Release.
"As TVI currently has no long-term debt, the Company views the Facility
as an appropriate interim step to fund ongoing construction activities at the
Canatuan mine" said Cliff James, President and CEO of TVI. "We are pleased to
be working towards an interim loan facility while we continue to pursue
permanent arrangements to finance the sulphide expansion project at Canatuan,
including through the establishment of a joint venture arrangement with an
industry participant."
The Term Sheet also provides that a second tranche of funding up to an
additional $5 million may be made available under the structure of the
Facility, to be sourced from a third party negotiated by TVI and consented to
by the Lenders.
The Term Sheet contemplates that the Facility, when established, will
remain in place for a term of six months, subject to extension for an
additional six months, at the election of TVIRD. Extension of the Facility for
the additional six-month term will be subject to payment of a 1% extension fee
based on the amount borrowed under the Facility and satisfaction of a number
of conditions. The amounts drawn by TVIRD under the first tranche of the
facility will bear interest at the rate of 14% per year, calculated from the
date of the draw-down and compounded monthly. Amounts drawn under the second
tranche of the Facility will bear interest at a rate between 0.5% to 14% per
annum if the amounts borrowed are in United States currency, or adjusted rates
if the loan is in Philippine Pesos. The Term Sheet indicates that principal
and accrued interest under the first tranche of the Facility may be pre-paid
at any time in amounts not less than US$2 million, subject to certain
prepayment penalties. The Term Sheet further provides that partial payments on
account of the second tranche of the Facility will not be permitted so long as
any amounts remain outstanding under the first tranche of the Facility.
The Term Sheet confirms that provision of the Facility is subject to the
satisfaction of a number of conditions for the benefit of the Lenders,
including completion of satisfactory due diligence inquiries concerning TVI
Pacific, TVIRD and various affiliates, execution and delivery of definitive
documentation providing for the Facility and related security, registration of
security interests in favour of the Lenders and there being no material
adverse changes in the business, operations, property or financial condition
of the Company, TVIRD and certain affiliates. The Term Sheet anticipates that
the Company will guarantee the obligations of TVIRD under the Facility and
that the security granted to the Lenders in connection with the establishment
of the Facility will include a security interest in the outstanding shares of
TVI International Marketing Limited, through which the Company holds its
interest in TVIRD. The Term Sheet further contemplates that subparticipation
rights in the security package to be granted to the Lenders will be made
available to the provider of the second tranche of the Facility and that
certain intercompany indebtedness of TVI group companies and shareholder loans
will be subordinated to the Facility. At the time of the initial draw by TVIRD
under the first tranche of the Facility, the Lenders will be entitled to an
arrangement fee equal to 1% of the total amount of that tranche.
There can be no assurance that the Company and TVIRD will be able to
successfully negotiate the definitive agreements for the Facility contemplated
by the Term Sheet and that the Facility will be made available to TVIRD as
contemplated by the Term Sheet.
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. TVI's most advanced project,
the Canatuan Mine, currently produces gold and silver doré.
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 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
Company's ability to successfully negotiate the definitive agreements relating
to the Facility and the security to be granted to the Lenders in connection
with the Facility, the completion of satisfactory due diligence, and the
occurrence of events that could have a material adverse effect on the
business, operations, property or financial condition of the Company and its
affiliates, including 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, new laws
(domestic or foreign) and changes in administrative practices. 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 anticipated use of proceeds from the Facility is
based upon the Company's current business strategy, budgets, mine plans and
projects, all of which are subject to change, and the current status of
construction efforts at Canatuan. Forward-looking information respecting the
timing of funding and terms and conditions upon which the Facility is to be
made available are based upon the Term Sheet and discussions with the Lenders.
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, 2006 and the Company's amended Annual
Information Form for the year ended December 31, 2006, which were filed on
SEDAR on December 18, 2007 and are 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.
For further information: Clifford M. James, President and CEO, TVI
Pacific Inc., Paul Moon, Director, Corporate Communications, (403) 265-4356