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TVI's Philippine Affiliate JV Completes Third Shipment of Nickel Ore at Agata Project

December 09, 2014

TSX: TVI  OTCQX: TVIPF

CALGARY, Dec. 9, 2014 /CNW/ - TVI Pacific Inc. (TSX:TVI) (OTCQX:TVIPF) ("TVI" or "the Company") and TVI's Philippine affiliate, TVI Resource Development (Phils.), Inc. ("TVIRD"), are pleased to announce that Agata Mining Ventures Inc. ("AMVI"), a joint venture company in which TVIRD holds a 60% interest and is the operator, has completed its third shipment of high-iron/low nickel direct shipping ore ("DSO") produced from the Agata project located in northern Mindanao, the Philippines.  Going forward, TVI will provide a summary of all shipments completed by AMVI on a monthly basis.

Third DSO Shipment Highlights

  • A total of 52,801 wet metric tonnes (wmt) of limonite high-iron/low nickel ore containing 0.81% nickel and 48.61% iron left the port of Payong-Payong in Agusan del Norte, Mindanao, on November 28, 2014, in accordance with an off-take arrangement between TVIRD and Tewoo Hoperay (Singapore) Pte. Ltd.

  • AMVI expects to receive gross revenue of US$660,000 for the shipment (pending final assay and price adjustments).

  • Remaining inventory to date is approximately 50,713 wmt of limonite high-iron/low nickel ore with nickel and iron content levels of 0.8% and 49.1%, respectively.

"The Agata DSO operation continues to generate the revenues and cash flows that are an essential element to TVIRD's efforts to secure a listing on the Philippine Stock Exchange ("PSE") in 2015," stated Clifford James, Chairman and CEO of TVI Pacific Inc. and Chairman of TVIRD. "A listing on the PSE would put a tangible dollar value on TVI's currently 30.66% investment in TVIRD, the achievement of which could substantially enhance its value for TVI shareholders."

Current Operations

AMVI commenced loading of a fourth shipment of high-iron/low nickel DSO at the end of November which is expected to be complete shortly, depending on weather conditions. Due to an increase in rainfall for the period from November to March, AMVI expects shipments to take slightly longer to complete but is taking measures to upgrade its operations to improve operating efficiency in wet weather conditions. 

As announced in news on November 26, 2014, AMVI also plans to mine higher grade saprolite ore (containing greater than 1.5% nickel) found in the deeper part of the nickel laterite orebody and make two separate 55,000 wmt shipments of this type of ore in the near term to secure higher selling prices. Following the shipment of the higher nickel grade saprolite ore, AMVI plans to mine and make separate shipments of both high and low grade saprolite and limonite ore in order to ensure that a blended higher selling price is obtained.

AMVI is currently planning to ramp up its nickel DSO operations from the previously stated goal of 2.5 million wet metric tonnes per year to 5 million wet metric tonnes by 2016 once it secures an amended and expanded Environmental Compliance Certificate and Declaration of Mining Project Feasibility with the Department of Environment and Natural Resources.

By doubling initially planned production capacity, AMVI expects to achieve economies of scale that would significantly enhance operating margins.  Once production has been fully ramped up, the resulting shipment schedule would be approximately one to three shipments of 55,000 wmt of DSO being dispatched every week.

About the Agata Project

The Agata project is held by AMVI, a joint venture company whose shares are owned by TVIRD and Mindoro Resources Ltd. ("Mindoro"), in which TVIRD holds a 60% interest and is operator.  TVI has a 30.66% direct interest in TVIRD and thereby a 24.2% indirect ownership interest in AMVI through its ownership in TVIRD and its 14.4% direct interest in Mindoro, which holds a 15% interest and option to acquire a further 25% in AMVI.  In TVI's consolidated financial statements, its interest in TVIRD is recorded as an investment in joint venture within the mining segment, and accounted for using the equity method. Revenues earned and related expenses incurred at the level of TVIRD and its subsidiaries, including net revenues generated by DSO shipments, now result in an adjustment to the investment account with corresponding adjustment in the consolidated income statement of TVI.

An initial Offtake Agreement ("Agreement") was signed by AMVI in June 2014 with Tewoo Hoperay (Singapore) Pte. Ltd, a subsidiary of Tianjjn Hoperay Mineral Limited Company, a major Chinese State Owned Enterprise, to sell one million wet metric tonnes of high-iron/low nickel DSO, and a second Agreement was signed in August 2014 to sell 500,000 wet metric tonnes.  Advance payments of US$3 million have now been received by AMVI against both agreements to fund initial operating costs.

The Agata Project is located in Agusan del Norte province, within the Surigao mining region on the island of Mindanao, Philippines. The Surigao region is a major lateritic nickel producing region providing ore to processing plants in Australia, China, Korea and Japan.  The Agata Project is well located and is expected to benefit from its deep protected seaport, the opportunity for year-round shipping and its proximity to main markets in Asia.

Based on the National Instrument ("NI") 43-101 compliant Feasibility Study completed by TVIRD on September 10, 2013, robust economics were indicated for a DSO operation of the high-iron laterite resources at the Agata Project.  The Feasibility Study concluded:

  • Low initial start-up capital of US$10.1 million, high Internal Rate of Return of 187% and payback within the first year of operation;
  • Post-tax Net Present Value (10% discount) of US$37.9 million; and,
  • DSO product to grade 48% Fe and 0.9% Ni - a product in consistent demand.

An NI 43-101 compliant mineral resource estimate released on April 10, 2013 shows the Agata DSO project to have reported Proven and Probable Reserves of 9.7 million wmt with a grade of 48% Fe with 0.9% Ni.  The report is available for viewing on http://www.sedar.com and www.tvipacific.com.

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 as well as gold and silver doré from its Canatuan mine and has now commenced shipping high-iron/low nickel ore at the Agata DSO project, which is 60% held by TVIRD.  TVIRD is also in the final stages of completing a definitive feasibility study ("DFS") on the innovative Agata nickel processing project, in which TVIRD has the right to earn a 60% interest upon completion of the DFS, and continues to advance its 100% owned Balabag Gold-Silver project.  TVI is a direct or indirect participant/operator in several joint venture projects in the Philippines, Papua New Guinea and Fiji and also has an interest in an offshore Philippine oil property.

In addition to retaining a 30.66% indirect interest in TVIRD and other Philippine subsidiaries, TVI continues to directly hold (i) 20.04% equity interest in Foyson Resources Limited ("Foyson") (ii) a 14.4% equity interest in Mindoro; (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.  

IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

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", "scheduled", "to be", "will be" and similar expressions.  Forward-looking statements in this News Release are based upon the opinions and expectations of management of the Company as at the effective date of such statements.  Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, 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 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, changes in exploration plans or budgets, and availability of equipment and personnel. 

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 cash flows anticipated from future production of high-iron/low nickel  DSO at the Agata Mining Project, is based upon high-iron/low nickel DSO prices in effect as at the date of this News Release, management's forecasts of trends in prices of  high-iron/low nickel DSO, current mining rates of high-iron/low nickel DSO from the Agata Mining Project, estimates of the size of the high-iron/low nickel DSO reserves at Agata Mining Project, the current development plan for Agata Mining Project, TVIRD's current budget and overall strategy for Agata Mining Project, which plans, budget and strategy are all subject to change.  Forward-looking information respecting the anticipated timing of future shipments of high-iron/low nickel DSO from the Agata Mining Project, is based upon current mining rates of high-iron/low nickel DSO from the Agata Mining Project, the terms of the third party offtake agreement for the purchase of high-iron/low nickel DSO produced at the Agata Mining Project, estimates of the size of the high-iron/low nickel DSO reserves at the Agata Mining Project, the current development plan for the Agata Mining Project, TVIRD's current budget and overall strategy for the Agata Mining Project, 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 (including mining activities) are described in detail in the Company's Annual Information Form for the year ended December 31, 2013, which was filed on SEDAR on March 19, 2014 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.

SOURCE TVI Pacific Inc.

Shirley Anthony, Investor Relations, TVI Pacific Inc., Phone: 778.999.2771, E-mail: shirley.anthony@tvipacific.com