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TVI's Philippine Affiliate Joint Venture Nears Completion of Definitive Feasibility Study on Agata Nickel Processing Project

November 24, 2014

TSX: TVI  OTCQX: TVIPF

CALGARY, Nov. 24, 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 Processing Inc. ("API") expects to complete by the end of 2014 a definitive feasibility study ("DFS") for a nickel processing plant at the Agata project located in northern Mindanao, the Philippines.  API is a joint venture company in which TVIRD has the right to earn a 60% interest upon the delivery of the DFS.  The proposed nickel processing plant will use a proprietary and innovative combination of two proven technologies that aim to achieve maximum nickel recovery at low operating and initial capital cost.

"Completion of the DFS is a critical milestone for TVIRD as the proposed nickel processing plant would produce nickel at low costs and receive feed from the same mining site as the current high iron/low nickel direct shipping ore operation, creating notable cost savings and operational synergies," stated Mr. Cliff James, Chairman, President and CEO of TVI Pacific Inc. and Chairman of TVIRD.  "Additionally, the completion of this study will support TVIRD's efforts to secure a listing on the Philippine Stock Exchange, the achievement of which could substantially enhance its investment value for TVI shareholders."

Current direct shipping ore operations ("DSO) are focused on the upper zone of the Agata laterite orebody, which consists of an upper high-iron/low nickel zone (ferruginous limonite zone), an intermediate high iron/medium nickel zone (limonite zone), and a lower low iron/medium-high nickel zone (saprolite zone).  The proposed nickel processing facility would process ore from the lower limonite and saprolite zones and produce a mixed hydroxide product ("MHP") with approximately 40% nickel content, which would be sold to the stainless steel market under offtake agreements.

Process Innovation

The process technology that TVIRD has been developing will revolutionize the way nickel laterites are processed in the industry.  Currently, the most common technology used is high pressure acid leach ("HPAL"), a process which generally requires intense upfront capital expenditures ("capex") of over $1 billion.  To avoid such high capex, TVIRD has engineered a two-stage process involving an initial Atmospheric Tank Leach ("ATL") process and a secondary Low Pressure Acid Leach ("LPAL") process.  Combined, the CAPEX for this two-stage process in a modular plant that is capable of producing 7,000 tonnes of nickel equivalent product per year is expected to range between $150 million to $200 million, a substantially lower cost, while having the same anticipated low operating costs as HPAL.  More precise figures will be announced upon the completion of the DFS.

While both the ATL and LPAL processes on their own are well understood and proven technologies - ATL is used as a standalone process for nickel laterite and copper oxide operations and LPAL is commonly used in zinc processing - this would be the first time the two processes are combined in this order for the processing of nickel limonite and saprolite ore.

It is expected that the DFS will be completed by the end of the year.

DFS Methodology & Progress

The DFS scope of work was separated into two components: (1) a Philippine in-country component for items such as port, infrastructure, mining, residue storage and water supply; and (2) a Process Plant and Acid Plant component.

The in-country component was conducted by Philippine-based engineering companies as well as the TVIRD project team to ensure that this part of the scope is integrated optimally with the DSO project to increase operational and cost efficiency.  Work completed to date includes the design of: (i) a management plan that aims to integrate a staged backfill plan with proposed mining stages while enabling progressive rehabilitation of mining areas to take place; (ii) a leached ore storage facility for the containment of residue generated from the ATL processing facility; (iii) a brine management system which would treat brine solution from the processing plant for safe discharge into the ocean through a subsea diffuser according to the release requirements of the Department of Energy and Natural Resources; and (iv) a water conveyance system to provide a dedicated water supply to the operation.

The Process Plant and Acid Plant component was designed by the Beijing General Research Institute of Mining & Metallurgy ("BGRIMM") and a prominent Chinese acid plant supplier, respectively.  TVIRD selected BGRIMM to complete the process plant design due to its reputation as an international Chinese engineering company well experienced and recognized as a leader in nickel processing research with access to premium quality, cost-effective Chinese process equipment.  The impact of this selection will be significant as approximately 80% of the project capital cost is related to the process and acid plants.  The relationship with BGRIMM is further supported by its previous work on the project, as announced in news on March 19, 2014, which involved extensive bench and pilot scale testing. As such, test work seamlessly flowed into flow sheet development, process design and engineering and cost estimation with the same technology partner.

To date, process and acid plant engineering has been completed. This design culminated in a 3-D model of the plant, with select static 3-D images available for viewing at www.tvipacific.com. Vendor quotations for all equipment have been received and integrated into the overall plant capital calculations. All raw materials and reagent requirements have been determined and vendor quotations obtained. This, together with other items such as labour costs, has been compiled to provide the process and acid plant operating cost. Both capital and operating costs are in line with previous indicative expectations.

Future Plans

Once the DFS has been completed, TVIRD will move into detailed plant design and construction. The financing of plant construction, engineering, site development and procurement are planned for 2015 with plant construction and commissioning expected to proceed the following year.

An indicative MHP offtake agreement has been received from BGRIMM. The MHP pricing from this proposed agreement has been used as the basis for the nickel product pricing in the economic model of the project.

Qualified Person

Mike Bue, Bsc. Eng, M.Eng, P.Eng, Technical Advisor and Project Advisory Group member of TVI and a member of the Professional Engineers of Ontario and Canadian Institute of Mining and Metallurgy, is the qualified person under NI43-101 who has approved the scientific and technical information in this news release.

Mr. Bue is supported in his role by Vincent Smith, MSc, chemical eng, project metallurgist, who has over 20 years of experience in metallurgical process development, operations and design across 50 mine sites encompassing 15 countries and was previously the group technology manager for ENK Plc, a nickel laterite development and production company in the Philippines.

About the Agata Nickel Processing Project

The Agata nickel processing project is held by API, a joint venture company in which TVIRD has the right to earn a 60% interest upon the delivery of a definitive feasibility study, subject to TVIRD having expended a minimum of $2 million within 12 months of the date of the Agata Processing Option and Joint Venture Agreement ("API Agreement") signed on September 24, 2012, and completing the definitive feasibility study within 4 years of the date of the API Agreement. As of September 30, 2014, TVIRD has completed its requirement to spend a minimum of $2 million and has earned 45% of shares in API, which remain in escrow until satisfaction of other requirements.

The 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 nickel producing region providing ore to processing plants in Australia, China, Korea and Japan.

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 with its Agata DSO project.  TVIRD also continues to advance its 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. 

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.

TVI Pacific Inc. 
Shirley Anthony
Investor Relations
778.999.2771
tvi-info@tvipacific.com

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