Remains confident in the Philippine mining industry
Hong Kong / March 2013 – TVI Pacific Inc. (“TVI”) Chairman and CEO Clifford M. James last week announced the company’s full-year 2012 financial and operational results to investors, entrepreneurs, brokers and investment analysts at the premier Mines and Money exhibit held at the Hong Kong Convention and Exhibition Center. The executive also segued into an overview of the company’s diverse portfolio of medium to long-term projects, primarily in the Visayas and Mindanao regions in the Philippines, and Papua New Guinea. He presented the company’s approach – through its local operating affiliate, TVI Resource Development Philippines Inc. (TVIRD) – to generating revenue from various commodity sources, particularly copper, zinc, high iron laterite, limestone, nickel and pyrite from mineral-rich deposits in the country. Held annually in Hong Kong, Mines and Money is a platform for mining companies worldwide to raise capital in Asia. This year, the exhibition received over 3,500 participants during its five-day run.
“TVI remains confident in the Philippines and the local mining industry,” according to James. “Testament to this is TVI’s strong corporate presence in the country through its local affiliate and its faith in the proven operational capability of its management team, which is almost entirely Filipino,” he said.
Given the government’s lifting of its two-year moratorium on new mining applications, James is confident as well that that it will be consistent in its implementation of the law. Recent developments have sent a positive signal to both local and foreign investors alike that the Philippine government intends not only to reorganize the industry but to also revitalize it.
Financial results
In accordance with International Financial Reporting Standards (IFRS) and Canadian securities regulations, James announced full-year net revenues of US $77.1 million generated through the company’s sale of copper and zinc concentrates from its Canatuan operations, of which net income before tax is $6.0 million. 2012 revenue was affected by a lower average copper price of US$3.60. After taxes, net income stands at US $5.3 million, up by 53.9 percent from the previous year.
The company’s cash balance for the year ended December 31, 2012 stands at $16.0 million; notwithstanding the settlement of the Rapu Rapu Net Smelter Return (NSR), which will further augment cash by a net minimum agreed $3.3 million due to TVIRD for the period through to December 31, 2012 but not yet collected, further strengthening the company’s position to invest in growth projects. Meanwhile, short term debts are at $9.9 million or a 38.9 percent reduction from the previous year’s $16.2 million.
Mining, milling and other expenses for the year were at $48.6 million, which were lower compared to the $48.8 million incurred in 2011. This, despite the 5 percent increase in the volume of copper shipped in 2012 versus previous year. Improved metal recoveries contributed to a 7% increase in metal production in 2012 and, combined with a lower consumption of chemicals required for processing, resulted in lower production cost per unit and expanded the Canatuan’s plant’s track record as a low cash cost producer.
2013 Outlook: a diverse portfolio of projects
Since 2004, the company has operated its Canatuan copper-zinc mine. This year, as it winds-up operations on its initial ore body, it also realizes potential discoveries – additional mineralized prospects in nearby Malusok which can potentially extend its mine life. Likewise, it is also set to implement the development of its Balabag gold-silver project in Zamboanga del Sur, pending the DENR’s issuance of its Environment Compliance Certificate (ECC) and on which it projects some 50,000 gold ounces per year beginning in 2014. This development is fortified by a nonbinding term sheet with Metrobank for a US $20 million term loan facility coupled by a $3.0 million letter of credit.
Joint venture projects with Mindoro Resources Ltd. (MRL) and Minerals Production Sharing Agreement (MPSA) holder, Minimax Mineral Exploration Corporation are also expected to come on-stream beginning in the second half of the year. These projects are geared towards the production of direct shipping ores (DSOs) high iron laterite, limestone and pyrite as well as the establishment of a nickel processing plant in Agusan del Norte by 2015. Plant construction is valued at less than $100 million. In all of the joint venture projects, TVIRD reserves the option to assume a majority 60% interest and will act as operator.
Finally, through its relationship with Foyson Resources Ltd., TVI Pacific Inc. also pursues the development of its Papua New Guinea assets, focusing primarily on Amazon Bay as a very large potential resource, particularly mineral sands containing iron, vanadium and titanium. TVI also has interests in copper, moly, gold porphyry and silver through its share ownership position in Foyson.
