TVI Pacific Provides First Quarter 2014 Financial and Operational Results
TSX: TVI OTCQX: TVIPF
CALGARY, May 14, 2014 /CNW/ – TVI Pacific Inc. (TSX: TVI) (OTCQX: TVIPF) (“TVI” or “the Company“) today announced its unaudited, consolidated financial and operational
results for the quarter ended March 31, 2014.
For a thorough explanation of the points discussed in this news release,
shareholders are encouraged to read the unaudited interim consolidated
financial statements, prepared in accordance with International
Financial Reporting Standards (“IFRS“), and the management’s discussion and analysis for the quarters ended
March 31, 2014 and March 31, 2013, and the audited consolidated
financial statements for the years ended December 31, 2013 and 2012.
These documents were filed with certain securities regulators in
Canada, and are available on our web site (www.tvipacific.com) or under our profile on SEDAR (www.sedar.com).
Q1 2014 Highlights
-- Loss before interest, tax, depreciation and share of loss of associates and joint ventures of $0.46 million. -- Net loss of $1.6 million. -- Cash balance of $1.9 million at March 31, 2014. -- No debt owing. -- A working capital surplus of $8.6 million.
Quarter ended Quarter ended Quarter ended March 31, 2014 March 31, 2013 December 31, 2013 Gross revenue ($ million) - $11.4 $10.3 Net revenue ($ million) - $10.2 $8.6 Net income (loss) ($ million) ($1.6) ($0.6) ($9.8) Basic net income (loss) per share ($0.002) ($0.001) (0.016) Cash balance at quarter end ($ millions) $1.9 $7.6 $2.4 Letters of credit and loan facilities ($ millions) (1) - $6.9 - Working capital surplus ($ millions) $8.6 $11.3 $9.5 (1) Average interest rate of: 2.00% for Q1 2013 and for year-end 2013. All Letters of Credit and loan facilities have been fully repaid at December 31, 2013.
On December 27, 2013, the Philippine Securities Exchange Commission
approved an increase in the authorized capital stock of TVI’s
Philippine operating affiliate, TVI Resource Development Phils., Inc.
(“TVIRD“) which resulted in the subscribed ordinary shares being issued to
Prime Resource Holdings, Inc. (“PRHI“) and a reduction in TVI’s indirect interest in TVIRD and other
Philippine subsidiaries. This has further resulted in the
deconsolidation of TVIRD, the Exploration Drilling Corporation (“EDCO“) and interests in the Agata and Pan de Azucar joint venture entities.
TVI’s continuing interest of approximately 30.66% in TVIRD is now
recorded as an investment in joint venture within the mining segment,
and accounted for using the equity method in the consolidated financial
statements. As such, revenues earned and related expenses incurred at
the level of TVIRD and its subsidiaries now result in an adjustment to
the investment account and therefore do not make the above financial
highlights directly comparable year-over-year.
In addition to retaining a 30.66% indirect interest in TVIRD and other
Philippine subsidiaries, TVI currently holds directly (i) 23.01% equity
interest in Foyson Resources Limited (“Foyson“) (ii) a 14.4% equity interest in Mindoro Resources Ltd.; (iii) its 10%
interest and further earning right in the Amazon Bay Iron Sands project
(for which the exploration license is held by Titan Mines Limited, a
company in which Foyson holds 50% shareholding and has an option to
acquire the remaining 50%); and (iv) its 100% investment in shares of
TG World Energy Corp.
Net income breakdown
3 months ended 3 months ended March 31, 2014 March 31, 2013 ($ million) ($ million) Reported net income (loss) (1.56) (0.58) Interest expense and income taxes 0.02 Depreciation, depletion and 0.01 2.42 accretion Share of loss of associates and 1.09 0.08 joint venture Net income before interest, (0.46) 1.94 taxes, depreciation and accretion, and share of loss of associates
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.
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.
Quarter ended Quarter ended Quarter ended March 31, 2014 March 31, 2013 December 31, 2013 Average tonnes 3,068 2,483 3,104 processed per day Ore copper 0.33 0.81 0.51 grade (%) Concentrate 18.30 17.81 17.08 copper grade (%) Concentrate 12.41 11.33 11.09 gold grade (g/t) Concentrate 423.00 365.11 388.24 silver grade (g/t) Concentrate - 37.01 40.75 zinc grade (g/t)
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
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
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
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.
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.