TVI Pacific Year End Results Reinforce Solid Financial and Operational Performance
Key Financial Achievements for the Years Ended December 31, 2009 and 2008 - Increase in net revenue to $67,103,108 from $5,972,764 - Increase in operating cash flow to $21,661,992 from a deficit of $13,506,114 - Increase in net income to $18,322,345 from a net loss of $12,714,279 - 2009 production cash cost of $0.61 per copper equivalent pound
6:27 PM ET, March 25, 2010
CALGARY, ALBERTA, Mar 25, 2010 (Marketwire via COMTEX) -- TVI Pacific Inc. ("TVI" or "the Company") (TVI) today released audited, consolidated financial and operational results for the year ended December 31, 2009. This press release should be read in conjunction with the audited consolidated financial statements and management's discussion and analysis for the year ended December 31, 2009, filed with certain securities regulators in Canada on March 25, 2010, and also available on our web site (www.tvipacific.com) and SEDAR (www.sedar.com).
Key Operational Achievements Quarter Over Quarter
3 Mo Ended 3 Mo Ended 3 Mo Ended 3 Mo Ended
31-Mar-09 30-Jun-09 30-Sep-09 31-Dec-09
-------------------------------------------------
Copper pound equivalent
produced (000 lbs) 4,358 6,156 8,205 8,104
Copper produced (000 lbs) 3,018 4,862 6,701 6,145
Gold produced (oz) 866 1,502 2,162 2,440
Silver produced (oz) 119,178 110,298 121,034 181,598
Production cash cost
(US$/Cu lb eq) (1) 0.76 0.58 0.55 0.63
Average copper price
received (US$/lb) 1.77 2.11 2.67 3.05
(1) See MD&A for definition of this non-GAAP measure.
"As previously reported, a number of factors have contributed to our financial and operational success over the past year", stated Cliff James, TVI's President and CEO. "After the sulphide plant at the Canatuan mine reached commercial production on March 1, 2009, we were able to consistently ship concentrate almost every four weeks to generate cash flow. The steady state of operations, as well as process improvements at Canatuan and the improvement in copper prices during the year, has further strengthened our cash position. This has allowed us to fast-track development drilling at Balabag, pursue mine life expansion opportunities at Canatuan and advance plans to resume exploration activities at Tamarok. We also intend to continue exploration activities on our 1,240 km2 tenement package on the Zamboanga Peninsula that has the potential to host significant porphyry copper-gold, massive sulphide and epithermal gold deposits."
The following table details key operating statistics for the Canatuan Sulphide Mine for the year ended December 31, 2009.
Quarter ended Year
----------------------------------- Ended
Mar 31, June 30, Sept 30, Dec 31, Dec 31,
Operations: 2009 2009 2009 2009 2009
------------ --------------------------------------------
Total tonnes processed 89,884 104,390 158,040 173,071 525,385
Average tonnes processed per day 999 1,147 1,718 1,881 1,439
Ore copper grade (%) 2.46 2.43 2.13 1.85 2.15
Copper recovery (%) 61.80 86.93 90.19 87.24 83.07
Concentrates produced 6,460 12,229 16,427 15,287 50,403
(dry weight - t)
Average daily concentrates 72 134 179 166 138
produced (dry weight - t)
Concentrate copper grade (%) 21.20 18.03 18.50 18.23 18.65
Concentrate gold grade (g/t) 4.17 3.82 4.09 4.97 4.30
Concentrate silver grade (g/t) 573.86 280.53 229.17 369.48 328.36
Production cash cost per Cu lb
eq (US$)(1) 0.76 0.58 0.55 0.63 0.61
Offtake
--------
Copper concentrates shipped 5,351 10,136 19,434 15,164 50,085
(dry weight - t)
Average copper price received 1.77 2.11 2.67 3.05 2.56
(US$/lb)
(1) Excludes selling expenses. See MD&A for definition of this non-GAAP
measure.
2009 Highlights
- In January 2009, TVI finalized a US$30.1 million five-year term loan facility agreement. In only 12 months, two voluntary payments and two scheduled payments have been made, decreasing the original principal owing by 46% to US$16.2 million as of January 20, 2010.
- By March 2009, the company completed its first shipment of copper concentrates from the Canatuan mine. A total of 10 shipments of copper concentrates occurred in 2009 generating gross revenue of US$64 million. Subsequent to year end, an additional three shipments were completed for total gross revenues of US$26.2 million.
- In November 2009, construction commenced on an additional flotation circuit to process zinc ore at the Canatuan mine. The Zinc Circuit is expected to be fully operational by mid-Q2 2010 and is expected to monetize the zinc component of the deposit for an added revenue stream. Copper concentrate production will continue at a rate of approximately 5,000 tonnes per month while the zinc circuit is designed to produce approximately 1,000 tonnes of zinc concentrate per month.
- In December 2009, a Mineral Production Sharing Agreement ("MPSA") encompassing the Tamarok copper-gold project was formally approved by the Secretary of the Department of Energy and Natural Resources of the Philippines. This MPSA will allow advanced exploration activities including geophysical surveys, systematic detailed geological investigations and the delineation of drill targets.
- By December 31, TVI had recorded 2,048,506 work hours with no lost time incidents. This remarkable achievement is a reflection of a safe and supportive environment with professional management. TVI takes great pride in fostering a workplace that stresses safety, efficiency, responsibility and career development.
2010 Outlook
Canatuan Mine
The mine continues to achieve consistent operating throughput and concentrate production. It is anticipated that future shipments of approximately 5,000 dry metric tonnes each will occur approximately every six weeks. Previously, shipments occurred every four to six weeks. In order to significantly reduce shipping and freight costs, the Company will be increasing the grade of the copper content for each metric tonne of concentrate shipped. Therefore, with a fewer number of shipments in 2010, the Company intends to sell a similar amount of metal content at a higher grade.
In March 2010, the Company received an amendment to its Environmental Compliance Certificate which increases the daily maximum allowable production rate to 2,500 tonnes per day and a maximum annual extraction rate of 2,500,000 tonnes per year. This allows the Company the capacity to process additional ore from other sources, including the Canatuan Near-Mine Tenements.
Balabag
As of February 22, 2010, drilling has commenced at the Balabag project on a 26 hole, 2,500 metre drilling program focused on the Tinago vein, the largest of three spatially related vein systems occurring at Balabag Hill. This program aims to define the area where the Tinago vein system is anticipated to extend to depth. The target is a minimum of 50,000 gold equivalent ounces in the indicated category, allowing for a scoping study to define an economical start-up mine development program.
The Balabag gold project is a high priority for TVI. Based on preliminary exploration results, TVI believes that the Balabag property has the potential to become a second production centre for the Company.
Canatuan Near-Mine Tenements
A key factor in TVI's forward strategy is to optimize profits from the producing Canatuan copper mine. This operation is the foundation or platform for growth for TVI. Exploration to date has identified several mineral occurrences on the surrounding tenements, including Tabingan, Matigdao and Palalian that TVI believes are compelling exploration prospects.
In February 2010, a Joint Venture agreement was finalized with DMCI-CERI ("DMCI"), a subsidiary of DACON Corporation, to conduct exploration, development and production of mineral deposits in the Greater Canatuan Tenement area. The JV partners will fund an exploration program in the Greater Canatuan Tenement area for a period of two years amounting to a maximum of US$2 million, to be shared in accordance with their respective interests.
The strategic alliance with DMCI allows for the opportunity to participate in a number of mineral properties around the Philippines. These properties are currently owned by DMCI and combining the talents of both companies may prove mutually beneficial over the longer term.
Tamarok
In North Zamboanga, TVI's tenement package covers almost all the targets identified by a prior exploration program, numbering at least 20 epithermal gold, massive sulphide and porphyry copper-gold prospects. TVI's first priority, the Tamarok copper-gold project, is located 60 kilometres north-northeast of the Balabag project. Reconnaissance work carried out to date supports historical findings and has discovered new prospects. A great deal of the mineralization in these areas occurs on the surface and has been easily accessible to the Company's exploration teams.
A scout drilling program will test subsurface continuity of outcropping porphyry copper-gold mineralization at Malachite Hill, where an initial exploration program of a 38 metre continuous channel sample produced an average of 0.71% copper and 0.35 grams per tonne gold.
Other Non-Core Opportunities
TVI is constantly evaluating non-core opportunities for addition revenue. These include possible joint ventures, equipment and facility optimization options, and cost saving initiatives that can be monetized.
"We are moving our projects forward, we are capitalizing on our Philippine advantage, we have a proven strategy for growth and we will continue to execute on these strengths", continued Cliff James. "2009 was a significant year for TVI. Please also view our new, updated presentation on our web site at www.tvipacific.com".
About TVI Pacific Inc. (TVI)
TVI Pacific Inc. is a publically traded, profitable, low cost copper producer focused on the production, development, exploration and acquisition of precious and base metal mining projects 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.
