TVI Pacific Provides First Quarter 2014 Financial and Operational Results

On December 27, 2013, the Philippine Securities Exchange Commission approved an increase in the authorized capital stock of TVI's Philippine operating affiliate, TVI Resource Development Phils., Inc. ("TVIRD") which resulted in the subscribed ordinary shares being issued to Prime Resource Holdings, Inc. ("PRHI") and a reduction in TVI's indirect interest in TVIRD and other Philippine subsidiaries.  This has further resulted in the deconsolidation of TVIRD, the Exploration Drilling Corporation ("EDCO") and interests in the Agata and Pan de Azucar joint venture entities.  TVI's continuing interest of approximately 30.66% in TVIRD is now recorded as an investment in joint venture within the mining segment, and accounted for using the equity method in the consolidated financial statements.  As such, revenues earned and related expenses incurred at the level of TVIRD and its subsidiaries now result in an adjustment to the investment account and therefore do not make the above financial highlights directly comparable year-over-year.

In addition to retaining a 30.66% indirect interest in TVIRD and other Philippine subsidiaries, TVI currently holds directly (i) 23.01% equity interest in Foyson Resources Limited ("Foyson") (ii) a 14.4% equity interest in Mindoro Resources Ltd.; (iii) its 10% interest and further earning right 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.

Net income breakdown

Adjusting for non-cash items, the net loss before interest, taxes, depreciation and share of loss of associates and joint ventures is reduced to $0.46 million at March 31, 2014.  The share of loss of associates and joint venture represents TVI's proportionate share of losses recognized through the quarter by Foyson and Mindoro, as well as TVI's 30.66% indirect interest in TVIRD and the other Philippine subsidiaries.

Cash Position

TVI fully repaid all debt facilities as at December 31, 2013 and has not incurred anything further as at March 31, 2014.

Cash reported at March 31, 2014 now includes only cash held at the level of TVI and not within its subsidiaries, and includes also only the proceeds received from PRHI through the First and Second Close; a further US$5.53 million remains in escrow until completion of the third and final close with PRHI, US$5.32 million of which will be provided directly to TVI while the balance will be released to TVIRD.

As at March 31, 2014, TVI subsidiaries have a cash balance of $13.0 million but this balance has been reclassified to Investment in Joint Venture in the consolidated financial statements, in proportion to the interest retained by TVI, as a result of the transaction with PRHI through which PRHI has assumed joint control of TVIRD with TVI.

Operational Highlights

During Q1 2014, TVIRD completed its last shipments of copper concentrate and zinc concentrate from the current mining operations at Canatuan as ore reserves from the open pit have been exhausted.  While the copper concentrate shipment of 4,118 dry metric tonnes generated gross revenues of approximately US$7.6 million and the zinc concentrate shipment of 5,069 dry metric tonnes generated approximately US $3.3 million, only TVI's 30.66% proportionate share of TVIRD's net loss has been recognized in TVI's investment in joint ventures.  The total net loss of the mining segment in Q1 2014 that has been deconsolidated is $1.98 million.

Final milling operations through January at Canatuan averaged a daily throughput of 3,068 dry metric tonnes for a total of 46,026 tonnes in the month (and in total for Q1 2014).  This mill feed consisted of ore mined from within the ore reserve block model as well as additional materials found and mined during the period.  The average copper feed grade was 0.33% and average copper recovery 76%, as compared to 0.51% average copper feed grade and 80% average copper recovery in the previous quarter.

Decommissioning and rehabilitation activities within the disturbed areas of Canatuan have commenced.  The first quarter activities have focused on the decommissioning of plant and equipment within the mill and processing plant area and continuation of the progressive rehabilitation activities within the overburden waste areas.  The rehabilitation tasks include earthwork stabilization, drainage controls and re-vegetation.  Water quality monitoring as well as meteorological data collection, hydrologic data collection and instrumentation data collection for the Sulphide Tailings Storage Facility Dam continued through the first quarter.  These activities will continue through the remainder of 2014.

Canatuan is owned 100% by TVIRD.  TVI has a 30.66% indirect ownership interest in Canatuan through TVIRD as a result of the PRHI transaction.

Update on Agata Direct Shipping Ore ("DSO") Operation

On April 28, 2014, the Agata Mining Joint Venture announced it has received the Declaration of Mining Project Feasibility ("DMPF") and clearance to develop a port facility for the proposed DSO operation of the high-iron laterite resources at the Agata Project.  Receipt of the DMPF authorizes the Agata Mining Joint Venture to proceed to development, including the extraction and sale of iron, nickel and other associated minerals in the contract area.  Site development is expected to commence in the second quarter of 2014 and shipping of the high-iron laterite would then commence through the third quarter of 2014, subject to receipt of remaining port approvals and financing.  Construction of the port facility may commence upon securing the permit to construct, the application for which has commenced and will be followed also by an application for the permit to operate.

TVIRD has an option to earn a 60% interest in the Agata Mining Joint Venture upon commencement of commercial production subject to (i) TVIRD having expended a minimum of $2 million within 12 months of the date of the Agata Mining Option and Joint Venture Agreement ("AMVI Agreement"), and (ii) commercial production at Agata having commenced within 3 years of the date of the AMVI Agreement. Under the AMVI Agreement, TVIRD is required to fund all expenditures associated with the establishment of the mining operation.

As at March 31, 2014, TVIRD has incurred a total of $2,360,034 and earned 59% of shares in the Agata Mining Joint Venture, which remain in escrow until satisfaction of other requirements.  TVI has a 30.66% indirect ownership interest through TVIRD in the interest to be earned in the Agata Mining Joint Venture as a result of the PRHI transaction.

For further information on TVI's operations please refer to the Management's Discussion and Analysis available on TVI's website www.tvipacific.com or under our profile on SEDAR (www.sedar.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 from its Canatuan mine and is advancing its Balabag Gold-Silver project and its Agata Nickel DSO operation.  TVI is a direct or indirect participant/operator in several joint venture projects in the Philippines and Papua New Guinea and also has an interest in an offshore Philippine oil property.

The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.

IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Press Release constitute 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", "schedule" and similar expressions. Forward-looking statements are based upon the opinions and expectations of TVI as at the effective date of such statements and, in certain cases, information received from or disseminated by third parties. Although TVI 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. These factors include, but are not limited to, such things as general economic conditions in Canada, the Philippines and elsewhere; volatility of prices for precious metals, base metals, oil and gas; commodity supply and demand; fluctuations in currency and interest rates; inherent risks associated with the exploration and development of mining properties; inherent risks associated with the exploration and development of oil and gas properties; ultimate recoverability of reserves; production, timing, results and costs of exploration and development activities; political or civil unrest; 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 personnel and equipment (including mechanical problems).

The forward-looking statements set out in this news release include information relating to interests that may be earned by TVIRD in the Agata joint ventures; opportunities for exploration, development and commercialization of the Agata Mining Project.  Related risks and uncertainties include, but are not limited to:  (A) results of further work in pursuing the conceptual planning described in this MD&A not supporting current expectations as to the opportunities outlined; (B) TVIRD not funding the necessary expenditures at Agata to advance the project or earn an interest under the joint venture agreement due to, among other things (i) changes in TVIRD's strategic priorities, due diligence findings, changes in laws or regulations affecting mining operations in the Philippines (including the profitability of such operations), and other factors, (ii) changes in TVIRD budgets and (iii) limited availability of funds; (C) a determination on the part of TVIRD not to pursue projects contemplated by one or more of the joint venture agreements noted above for technical, economic, legal or other reasons (including, without limitation, a failure to obtain required permits or other governmental or regulatory approvals);  and (D) certain other risks identified elsewhere in TVI's public filings, including, without limitation, those risk factors set forth at pp. 66-74 of TVI's Annual Information Form dated  March 19, 2014. 

This news release also includes forward-looking statements respecting certain transactions provided for in definitive agreements entered into with PRHI (the "Transactions") and are based upon the terms of these definitive agreements.  With respect to the Transactions, those risks and uncertainties include a failure to close one or more of the Transactions on the terms outlined in the definitive agreements entered into with PRHI due to the failure to satisfy one or more conditions, such as conditions relating to the receipt of any necessary corporate or regulatory approvals.

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.

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 TVI is exposed in the conduct of its business are described in detail in the TVI's management's discussion and analysis for the year ended December 31, 2013 which was filed on SEDAR on March 19, 2014 and is available under TVI's profile at www.sedar.com.  Subject to applicable securities laws, TVI 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.