- Canatuan mine highlights:
- Gross revenues of $8.2 million
- Net income of $2.4 million, before amortization and accretion
expense
- Average cash cost of US$0.79/Cu lb eq.
- Two copper concentrate shipments completed to date; 5,351 dmt on
March 27, 2009 and 3,251 dmt on May 2, 2009; future shipments
anticipated, each averaging 5,000 dmt, every four to six weeks
(TSX: TVI)
CALGARY, May 8 /CNW/ - TVI Pacific Inc. ("TVI" or the "Company") today released first quarter operating statistics for the Canatuan mine in the southern Philippines, which achieved commercial production on March 1, 2009 with gross revenues of $8.2 million. Canatuan is owned by its operating affiliate, TVI Resource Development (Phils.), Inc. ("TVIRD"). For the three month period ended March 31, 2009, the Canatuan mine produced 6,460 dry metric tonnes of copper concentrate. On March 27, 2009, TVIRD completed its first concentrate shipment of approximately 5,351 dry metric tonnes ("dmt"), and received proceeds of US$4.9 million on April 1, 2009, which represented a provisional payment of 90% of the estimated value of the shipment. The agreement under which the copper concentrates were sold to a third party provides that final payment for the remaining sale price of the concentrates is due once the final details relating to the weight, assays and prices are determined.
In addition, the Company has filed its unaudited first quarter financial statements and associated management's discussion and analysis with certain securities regulators in Canada. Copies of these documents are available on the TVI website at www.tvipacific.com and will be available under the Company's profile on the SEDAR website at www.sedar.com.
Certain statements in this News Release constitute forward-looking statements, including statements respecting anticipated operational improvements at the Canatuan mine in Q2 2009, anticipated exploration activities in the vicinity of the Canatuan mine and at other TVIRD prospects in the Philippines, the sources of funds to support exploration activities and the creation and finalization of development and exploration plans for various TVIRD prospects in the Philippines.
"The three month period ended March 31, 2009 marks the first calendar quarter of production ramp-up from the new sulphide plant at the Canatuan mine site and TVIRD continues to optimize production from the plant", stated Cliff James, TVI's President and CEO. "During the quarter, and on a stand-alone basis, the Canatuan mine achieved operating results considered encouraging by the management of the Company and generated positive net income of $2.4 million before amortization and accretion expense." (See note on non-GAAP measures below). "It should be stressed that the revenue and cash flow generated by the Canatuan mine in the first quarter was the result of a single shipment of 5,351 dmt of copper concentrates near the end of March, 2009. The Company completed a second shipment of 3,251 dmt of copper concentrates on May 2, 2009 and anticipates that future shipments, each averaging approximately 5,000 dmt, will occur approximately every four to six weeks (largely depending upon shipment schedules). Management of the Company expects operational improvements at the Canatuan mine to continue into Q2 2009 as the mine team focuses on maximizing throughput and recoveries".
Canatuan mine operational highlights for the first quarter of 2009:
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Operations: Q1 2009
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Total tonnes processed (t) 89,884
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Average tonnes processed per day (t) 999
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Copper recovery (%) 61.80
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Ore copper grade (%) 2.46
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Ore gold grade (g/t) 1.18
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Ore silver grade (g/t) 135.06
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Concentrates produced (dry weight - t) 6,460
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Concentrate copper grade (%) 21.20
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Concentrate gold grade (g/t) 4.17
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Concentrate silver grade (g/t) 573.86
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Average cash costs per Cu lb equivalent (US$)(x) 0.79
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Offtake
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Copper concentrate shipped (dry weight - t) 5,351
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Revenue from Concentrates (gross - US$) 6,447,252
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Average copper price received (US$/lb) 1.77
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(x) Excludes selling expenses. The copper pound equivalent is calculated
using commodity prices of US$1.77/lb for copper, US$932.95/oz for
gold, and US$13.45/oz for silver.
Financial highlights for the first quarter of 2009:
- During the three months ended March 31, 2009, TVI incurred a
consolidated net loss of $2.0 million. For the quarter, the Canatuan
mine generated revenues of $8.2 million from the sulphide operation,
of which $6.8 million remained in accounts receivable at the end of
the quarter. For the quarter, the Canatuan mine segment produced net
income of $1.9 million. Adding back the non-cash amortization and
accretion expense of $0.5 million, the mine segment produced net
income before amortization and accretion expense of $2.4 million.
This represented approximately 30% of sales revenues from the
segment. The Company was able to achieve a positive net income within
the segment after only one shipment during the quarter.
- Exploration expenses totalled $0.1 million during the three months
ended March 31, 2009, which was a decrease of about $0.4 million or
80% compared to the first quarter of 2008. Due to a shortage of
funding, TVIRD did not conduct the same level of exploration activity
as it did during the comparative period in 2008. TVIRD plans to
expand exploration efforts as soon as additional financing is
available.
- The Company recognized approximately $1.5 million in interest expense
on the new term loan signed in January 2009.
Outlook
Management of TVI expects that TVIRD exploration efforts will, subject to the availability of financing, continue to focus on the Canatuan near-mine tenements, the Balabag project, and the promising Tamrok/Tapisa project. Management of the Company expects that TVIRD will partially fund exploration activities from cash flow generated through the sale of copper concentrates produced at the Canatuan mine. As well, TVI continues to consider other financing alternatives, including a future debt financing, future equity offerings, and sales of non-core assets.
The Company is assessing financing alternatives for the working capital required to support the initial development of the Balabag project and to advance the Company's broader exploration program. TVI plans to finalize a development plan for the Balabag exploration project, create initial plans for its other exploration tenements, and evaluate opportunities to acquire new properties to further expand the Company's portfolio of properties in the Philippines. In addition, the Company expects to leverage off of its existing Canatuan facilities and determine if discoveries made on the Canatuan near-mine tenements can be economically mined.
TVI's financing strategy is to market locally in Canada, as well as internationally in Asia, Europe, and the United States. The Company is currently entertaining potential investors in the Philippines, as well as in Canada. TVI is also considering strategic alliances or joint ventures with other mining companies to benefit from economies of scale.
Non-GAAP Measures
Net income before amortization and accretion expense is a non-GAAP measure that represents income before non-cash expenses in amortization and accretion expense. This measure should not be considered an alternative to, or more meaningful than, net income. Management believes that net income before amortization and accretion expense is a useful supplemental measure to analyze the Company's ability to generate cash income. This measure may not be comparable to similar measures used by other companies. This press release should be read in conjunction with the unaudited interim financial statements for the three month periods ended March 31, 2009 and 2008.
About TVI Pacific Inc. (TSX: TVI)
---------------------------------
TVI Pacific Inc. is a publicly traded Canadian mining company focused on exploring for, developing and producing precious and base metals within district scale systems in the Philippines. The Company's interest in the Canatuan Mine and its other Philippine assets are held through its affiliate, TVI Resource Development (Phils.) Inc.
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 and, in certain cases, information received from 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 received from 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 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, changes in exploration plans or budgets, and availability of equipment and availability of 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 anticipated operational improvements at the Canatuan mine in Q2 2009 is based upon TVIRD's current budget and overall strategy for Canatuan (which plans, budget and strategy are all subject to change), current and anticipated financial obligations of TVIRD (including the terms and repayment schedules associated with the term loan facility between TVIRD and LIM Asia Multi-Strategy Fund Inc. and LIM Asia Special Situations Master Fund Ltd.), the status of current operations at the Canatuan mine site, management's experiences with historical expansions of processing capacity at the Canatuan mine. Forward-looking information respecting anticipated exploration activities in the vicinity of the Canatuan mine and at other TVIRD prospects in the Philippines, is based upon TVIRD's current budget and overall strategy for Canatuan and its other Philippine's prospects (which plans, budget and strategy are all subject to change), current and anticipated financial obligations of TVIRD (including the terms and repayment schedules associated with the term loan facility between TVIRD and LIM Asia Multi-Strategy Fund Inc. and LIM Asia Special Situations Master Fund Ltd.), the status of current operations at the Canatuan mine site. Forward-looking information respecting the sources of funds to support exploration activities is based upon current and anticipated production of copper concentrates from the Canatuan mine, the terms of sale of such production under a long-term off-take agreement with a third party. Forward-looking information respecting the creation and finalization of development and exploration plans for various TVIRD prospects in the Philippines is based upon the current status of such plans, management's historical experiences with the development and finalization of such plans. 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 and its affiliates are exposed in the conduct of their business (including mining activities) are described in detail in the Company's Annual Information Form for the year ended December 31, 2008, which was filed on SEDAR on March 26, 2009 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.