(TSX: TVI)
- Canatuan mine highlights for the three months ended June 30, 2009:
- Segmented gross revenues of $12.6 million
- Segmented net income of $4.1 million
- Average cash cost for production from the Canatuan mine of US
$0.58/Cu lb eq.
- Five copper concentrate shipments completed to date brings total
expected gross revenues to US$27 million
CALGARY, Aug. 14 /CNW/ - TVI Pacific Inc. ("TVI" or the "Company") today released second quarter operating statistics for the Canatuan Mine in the southern Philippines, which has generated gross revenues of $20.7 million since the initiation of commercial operations (targeting the sulphide zone) on March 1, 2009. Canatuan is operated by TVI's Philippine affiliate, TVI Resource Development (Phils.), Inc. ("TVIRD"). All numbers in this News Release are expressed in Canadian dollars unless otherwise indicated. For the three month period ended June 30, 2009, the Canatuan Mine produced 12,229 dry metric tonnes of copper concentrates.
The Company has filed its unaudited second 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. Financial information relating specifically to the Canatuan Mine is set out in Note 14 ("Segmented information") of the Company's consolidated interim financial statements. The Canatuan Mine is currently the Company's main operating segment and principal source of cash flow.
Certain statements in this News Release constitute forward-looking statements, including statements respecting anticipated operational improvements at the Canatuan Mine in Q3 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.
"A number of factors have contributed to the improvements in performance that were achieved at the Canatuan Mine in the most recent quarter", stated Cliff James, TVI's President and Chief Executive Officer. "In addition to steadily improving the throughput and recoveries at Canatuan since the conclusion of the commissioning phase of the new operation in early March 2009, the mine team has been able to decrease the average cash cost of production to US$0.58 per copper pound equivalent. The Canatuan operation has also benefited from the recovery of market copper prices, which have continued their upward trend into the third quarter."
Canatuan mine operational highlights for the first and second quarters of
2009:
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Operations: Three months ended Three months ended
----------- March 31, 2009 June 30, 2009
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Total tonnes of ore
processed (t) 89,884 104,390
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Average tonnes of ore
processed per day (t) 999 1,147
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Copper recovery (%) 61.80 86.93
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Ore copper grade (%) 2.46 2.43
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Ore gold grade (g/t) 1.18 0.77
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Ore silver grade (g/t) 135.06 59.22
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Concentrates produced
(dry weight - t) 6,460 12,229
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Concentrate copper grade (%) 21.20 18.03
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Concentrate gold grade (g/t) 4.17 3.82
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Concentrate silver grade (g/t) 573.86 280.53
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Average cash costs per Cu lb eq
(US$)(x) 0.79 0.58
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Offtake
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Copper concentrates shipped
(dry weight - t) 5,351 10,136
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Revenue from concentrates shipped
(gross - US$) 6,447,252 10,588,550
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Average copper price received
(US$/lb) 1.77 2.11
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(x) Excludes selling expenses. For the three months ended March 31, 2009,
the copper pound equivalent for metals shipped was calculated using
commodity prices of US$1.77/lb for copper, US$932.95/oz for gold and
US$13.45/oz for silver. For the three months ended June 30, 2009, the
copper pound equivalent for metals shipped was calculated using
commodity prices of US$2.11/lb for copper, US$913.52/oz for gold and
US$13.42/oz for silver. The copper pound equivalent for metals in
ending inventory at June 30, 2009, was calculated using commodity
prices of US$2.32/lb for copper, US$937.75/oz for gold and US
$13.94/oz for silver.
Financial highlights for the three months ended June 30, 2009:
- During the three month period ended June 30, 2009, TVI earned
consolidated net income of $0.7 million. For the period, the
Canatuan mine segment contributed $4.1 million of net income.
Adding back the non-cash amortization and accretion expense of
$2.0 million, the mine segment produced net income before
amortization and accretion expense of $6.1 million. This
represented approximately 48% of sales revenue from the segment
for the quarter.
- Exploration expenditures in Q2 2009 decreased by approximately
$0.2 million, or 72%, in comparison to Q2 2008. TVIRD's main focus
during the quarter was to increase production at the Canatuan
mine. TVIRD expects to expand its exploration efforts in the third
quarter of 2009, supported by cash flows from operations at
Canatuan.
- The Company recognized approximately $1.9 million in interest
expense during the three months ended June 30, 2009, primarily
related to the term loan signed in January 2009.
Outlook
The revenue and cash flow generated by the Canatuan Mine in the second quarter of 2009 is a result of the second and third concentrate shipments in May 2009, as well as partially recognized revenue from the fourth shipment that was completed July 2, 2009. Approximately 31% of the gross revenue from the fourth shipment was recognized in the quarter, while the balance will be recognized in the third quarter. The TVIRD mine team at Canatuan is carrying out additional infrastructure and equipment improvements in an effort to further increase throughput at the mine facility and management of the Company expects further improvements in that regard into Q3 2009. As well, the Company is considering alternatives to raise additional capital, including debt and equity financings.
TVI management believes that the various TVIRD exploration projects, especially the Canatuan near-mine tenements and the Tamarok / Tapisa project, represent compelling opportunities for the Company. Exploration activities in the Philippines for the balance of 2009 are expected to be partially funded by cash flow generated from the Canatuan Sulphide Project.
TVIRD is working towards a staged development plan for the Balabag exploration project, to create initial plans for its other exploration tenements, and to evaluate opportunities to acquire new properties to expand its portfolio of properties in the Philippines. In addition, TVIRD continues to put the community and regulatory preparations in place for an exploration program in the vicinity of the Canatuan mine to determine if various near-mine prospects identified by past exploration 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 in discussions with 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. There can be no assurance that any of the current discussions will result in further investments in the Company or that the consideration of strategic alliances and joint ventures will lead to the establishment of relationships with third-party mining organizations.
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 (the most directly comparable measure calculated in accordance with GAAP). 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 does not have any standardized meaning prescribed by Canadian GAAP and is, therefore, unlikely to be comparable to similar measures used by other issuers.
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 Q3 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 and 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.) and 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 and 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 and 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.