Certain information and statements set out in this News Release, including the expectation of increased throughput at Canatuan and increased metal recoveries from processing operations at Canatuan, TVI’s expansion plans at Canatuan, information relating to the impact of an updated cut-off grade for the gossan reserve at Canatuan, information relating to the planned sulphide project and the anticipated impact of other operational initiatives at Canatuan, constitute forward-looking information. Readers should review the cautionary statement respecting forward-looking information that appears at the end of this News Release.CANATUAN PLANT ACHIEVES STEADY STATE THROUGHPUT OF 1,300 DMTPD
TVI Pacific Inc. (“TVI”) is pleased to announce that its affiliate, TVI Resource Development (Phils.) Inc. (“TVIRD”), has exceeded interim targeted throughput of 1,200 Dry Metric Tonnes of gossan ore milled per day (“DMTPD”) at the Canatuan Mine (Zamboanga Peninsula, Mindanao, Philippines). The plant has operated at a steady state of approximately 1,300 DMTPD and has been successfully tested beyond 1,500 DMTPD on a sustained basis. The expanded grinding circuit has proven capable of handling the increased throughput. Further improvements to the primary crusher and feed system at the front end of the plant are expected to increase the steady state operational throughput to approximately 1,500 to 1600 DMTPD by the second quarter.
“Our operations team continues to successfully test the throttle in terms of throughput and metal production,” said Cliff James, President and CEO of TVI. “Overall cost reduction is also now a major priority. The Canatuan Mine and team continue to exceed our expectations in an improving operating environment.”
METAL PRODUCTION EXPECTED TO INCREASE AS PROCESSING CAPACITY IS EXPANDED
Gold and silver production has been steadily increasing in recent months and the mine is currently producing approximately 130 gold equivalent ounces (“AuEqOz”) per day. This is expected to increase as throughput increases and additional plant components are brought on stream in an effort to increase metal recoveries. These include the previously reported upgrading and expanding of the CIL/CIP tank farm, additional thickening capacity and expansion of the Merrill-Crowe process. These systems are expected to be fully functioning before March 15, 2006. (For purposes of this News Release, silver credits are added to form gold equivalent values, as the value contributed by silver is significant. Commodity prices used in determining gold-equivalent values are USD $500 per ounce of gold and USD $9 per ounce of silver.)
REVIEW OF EXISTING GOSSAN RESOURCE AT CANATUAN UNDERWAY
TVIRD has initiated a review of the reported Gossan Resource at Canatuan with a view to determining an appropriate cut-off grade to be used for an updated gossan reserve study. Given the significant rise in prices of both gold (from US $375 to a current price greater than US $500 per oz) and silver (from US $5.50 to a current price greater than US $9 per oz) since the November 2004 Gossan Feasibility Study, substantially lower than expected capital expenditures to complete mine development to date, anticipated lower operating costs and much better economies of scale anticipated from an increase in plant throughput (from 800 DMTPD to 1,500 to 1,600 DMTPD), management expects that a decrease in cut-off grade can be achieved for the ore that can be processed at Canatuan. A lower cut-off grade will increase mineable ore reserves, mine life of the gossan phase and total ounces of gold and silver that may ultimately be produced. In addition, the November 2004 resource study did not include a volume of “rubbly gossan” (boulders and fragments of gossan which has been eroded off the main body, in a laterite matrix), and is located peripheral to the in-situ gossan deposit. This is expected to become part of the resource.
(For additional information on the Canatuan Gossan Resource, please refer to the updated, NI 43-101 compliant, Independent Technical Report On The Canatuan Copper-Gold Project, Philippines, dated November 23, 2004, which is filed on Sedar at www.sedar.com.)
ECONOMIES OF SCALE ATTRIBUTABLE TO INCREASED THROUGHPUT EXPECTED TO DECREASE GOSSAN OPERATION CASH COSTS
For the gossan mining operation, management expects cash costs per oz of Au equivalent to decrease, principally as a result of economies of scale associated with anticipated increases in throughput and daily production of metal. The impact of economies of scale on the Canatuan operation are illustrated by a comparison of 2005 operating data with operating information for January 2006 — cash costs per AuEqOz decreased from a 2005 average of CDN$371 (US$310) to CDN$300 (US$261) in January 2006. The decrease in January was principally attributable to increased metal production as compared to 2005. A number of other initiatives are currently underway, however, at Canatuan to decrease operating costs. All facets of the operation are currently being reviewed, with the objective of identifying ways to lower operating costs.
A further reduction in cash costs per oz of Au equivalent is expected when the sulfide mining operation commences, as many costs now borne entirely by the gossan operation will be shared.
SULPHIDE FEASIBILITY STUDY WELL ADVANCED WITH TARGETED COMPLETION FOR END OF FIRST QUARTER 2006
o TVIRD planning to commence Cu and Zn concentrate production before end of 2006
TVIRD’s consultants and accredited laboratories have completed metallurgical test work and arrived at the flow sheet for treating the sulphide ore at Canatuan. Norwest Corporation of Calgary, Canada, has advised TVIRD that it remains on schedule and expects to complete the full Sulphide Feasibility Study for Canatuan by the end of the first quarter of 2006. In anticipation of the completed study, TVIRD is pursuing a number of initiatives which include engaging experts to help fast-track construction of the sulphide flotation plant. These experts include a metallurgical engineering group with specific process plant expertise, a design engineering group for engineering of the flotation plant, a marine and port engineering group to design the port load out facility, a concentrate consultant to assist with developing a suitable marketing strategy and a procurement expert to determine the most cost effective sources of consumables and capital equipment.
TVIRD has negotiated a right of first refusal on two 9′ x 15′ ball mills, which are expected to be installed at Canatuan to support the planned 1,000 DMTPD sulphide plant. TVIRD continues to actively look for other key pieces of equipment.
TVIRD’s target is to complete construction of the Sulphide plant and commence Cu and Zn concentrate production before the end of 2006.
CONSTRUCTION OF THE SECOND PHASE GOSSAN TAILINGS IMPOUNDMENT FACILITY CONTINUES – TARGETED COMPLETION BY END OF FIRST QUARTER 2006
Construction of the second phase of the Gossan Tailings Dam is continuing with completion anticipated by the end of March, 2006. The additional capacity is being added to allow for expanded throughput and provide tailings storage through mid 2007. Onsite construction supervision and quality control programs continue to be overseen by Knight Pi??sold Consulting Group, an international consulting engineering firm headquartered in Canada. The dam and construction program have been viewed by a number of government regulatory agencies and non-governmental organizations. All of the regulatory agencies and non-governmental organizations that have examined the project have been complimentary of the work and care given to the dam and environmental protection program.
SITE SELECTED FOR THE SULPHIDE PROJECT TAILINGS STORAGE FACILITY – DESIGN AND PERMITTING HAVE BEEN INITIATED
Field investigation for a new tailings dam site to support the Sulphide Flotation Project was recently completed. Several sites are available within close proximity of the mine and mill. The final dam site is expected to be determined by the end of the first quarter of 2006. An international engineering consulting engineering firm with onsite experience is expected to design and construct the dam and impoundment.
For additional information on the Canatuan Mine, please refer to the updated, NI 43-101 compliant, Independent Technical Report On The Canatuan Copper-Gold Project, Philippines, dated November 23, 2004, and the updated Independent Gossan Mining Feasibility Study – Canatuan Project, dated November 5, 2004, both of which have been filed on Sedar at www.sedar.com. Additional information, including maps and photos of the Canatuan Mine, can also be found on TVI’s website, at www.tvipacific.com and on TVI’s dedicated Canatuan Project website found at www.tvicanatuan.com.
About TVI Pacific Inc. (TSX: TVI)
TVI Pacific Inc. is a publicly-listed (TSX:TVI) mining company focused on exploring for and producing precious and base metals within district scale systems in Asia.
In addition to the Canatuan project, TVI holds a 2.5% net smelter return (NSR) royalty on the Philippine-based Rapu Rapu project (the second foreign-invested, new, mining project in the Philippines), which commenced operations in July 2005, with royalty cash flow to TVI beginning in Q4, 2005. Exploration in the Philippines is being conducted at Canatuan (both to expand TVI’s resource base and to find new deposits), and at Balabag, which management of TVI views as a compelling exploration property. Extensive applications, which cover an area of 1,257.12 km2, have also been filed on a new copper-gold mineral district, near Canatuan, on which exploration is planned in the near future.
In China, TVI’s wholly-owned Chinese subsidiary, Hunan Pacific Geological Exploration Inc. (HPGEI) is the first foreign mining company to be granted both WOFE status and a Qualified Explorer License. HPGEI has three main areas of interest in China – gold exploration in the Golden Triangle region of Guizhou/Yunnan/Guangxi Provinces, copper/gold exploration in Yunnan Province and copper/gold exploration in the Tibet Autonomous Region. HPGEI has 168,200 hectares of land under application in China in the Golden Triangle and in the Tibet A.R.
TVI also has a Drilling Division, based in both the Philippines (EDCO) and China (HPD), which generates revenue from contract drilling.
Further Information: Clifford M. James, President and CEO
Paul Moon, Director, Corporate Communications (403) 265-4356
Ian Perry, P.Geo. of Norwest Corporation, serves as TVI’s “Qualified Person” (for purposes of National Instrument 43-101 – Standards of Disclosure for Mineral Deposits) on the Canatuan project, has reviewed this News Release.
The statements herein that are not historical facts are forward-looking statements. Forward-looking statements (often, but not always, identified by the use of words such as “expect”, “may”, “anticipate” or “will” and similar expressions) may include plans, expectations, opinions, or guidance that are not statements of fact. Forward-looking statements are based upon the opinions, expectations and estimates of management as at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or 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 reserves, timing, results and costs of exploration, development and production activities, availability of financial resources or third-party financing and new laws (domestic or foreign). Forward-looking information respecting future exploration is based on the current budget of TVI current budget of TVI, the results of earlier exploration initiatives, interpretation of available exploration data and new information obtained during the normal course of operations and those exploration plans are subject to change. Forward-looking information respecting anticipated increases in throughput at the Canatuan mill and increased metal recoveries at Canatuan are based upon recent operating experience and extensive laboratory studies. Forward-looking information respecting expansion plans at the Canatuan mine is based upon the current budget and development plans of TVI, which are subject to change. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The forward looking statements of TVI Pacific Inc. contained in this News Release are expressly qualified, in their entirety, by this cautionary statement. Various risks associated with the Company’s exploration activities are described in detail in TVI’s Annual Information Form, filed by TVI on SEDAR on April 6, 2005, which is available at www.SEDAR.com.
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.
