TVI Pacific Inc. Announces Final Closing of Philippines Investment and Financing Transactions
Final Close Receives US $5.53 million
TSX: TVI OTCQX: TVIPF
CALGARY, July 8, 2014 /CNW/ - TVI Pacific Inc. (TSX:TVI) (OTCQX:TVIPF) ("TVI") announced today that it has completed the final closing (the "Third Closing") of various investment and financing transactions involving Prime Resource Holdings, Inc. ("PRHI"), following satisfaction of certain conditions outlined in the definitive agreements executed by TVI, PRHI and others on December 11th, 2013. Additional information relating to the transactions with PRHI (the "Transactions") are set out in (i) the news releases disseminated by TVI on December 11, 2013, December 13, 2013 and January 10, 2014, (ii) TVI's December 20, 2013 material change report, and (iii) the December 11, 2013 investment agreement (the "Investment Agreement") entered into between TVI, PRHI and others (which represents the "umbrella" agreement between TVI and PRHI for the Transactions), all of which have been filed with various securities regulatory authorities in Canada and are available through SEDAR (under TVI's profile).
Highlights of the Third Close:
|1.||The release of all proceeds remaining in escrow, including:|
|a) US $4.3 million for the purchase of 3.97% of the common shares of TVI Minerals Processing, Inc.|
|b) US $1.23 million related to the sale and restructuring of subsidiaries and Class A shareholders of TVI's|
|Philippine associate, TVI Resource Development (Phils.) Inc. ("TVIRD").|
|2.||US $5.3 million of the above transactions coming through to TVI as the repayment of intercompany advances, resulting in an aggregate US $10.650 million to TVI as a result of all Transactions and US $11.850 million to TVIRD and various subsidiaries, each before tax and related fees.|
At the first closing on December 13, 2013, PRHI invested US $1.545 million in TVI International Marketing Limited ("TVIIM") (through the purchase of one deferred non-voting share of TVIIM (redeemable at par value)) and US $2 million in TVI (through the purchase of 33,333,333 common shares of TVI at a price of US $0.06 per share). In addition, PRHI advanced US $2 million as partial payment for its investment in TVIRD.
At the second closing on January 10, 2014, PRHI released a further i) US $1.305 million, representing the balance of the subscription price for PRHI's investment in TVIIM, for which PRHI has received a second deferred non-voting share of TVIIM that is redeemable at par value; and ii) US $10.12 million, representing the balance of the subscription price paid by PRHI to acquire newly issued voting shares of TVIRD and an investment in TVIRD subsidiaries. A further US $4.3 million was advanced by PRHI (and placed into an escrow account), representing the purchase price of voting shares in the capital of TVI Minerals Processing, Inc., a Philippine incorporated subsidiary of TVIIM.
All funds advanced by PRHI are expected to be used by TVI group entities for working capital purposes and to further advance various projects, and have been used also to undertake certain restructuring transactions affecting members of the TVI group of companies (including the repurchase of all the outstanding TVIRD Class A shares). The Transactions, as outlined in TVI's December 11, 2013 news release and described in the Investment Agreement, reflect an aggregate investment by PRHI of US $22.5 million. After giving effect to the Transactions, PRHI holds approximately 5% of the total number of issued and outstanding common shares of TVI and 68.42% of the total number of outstanding voting shares of TVIRD.
The Transactions are now complete and have provided an aggregate US $10.650 million to TVI and US $11.850 million to TVIRD and various subsidiaries, each before tax and related fees, while a net US $350,000 has been used to repurchase all of the outstanding TVIRD Class A shares.
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 Philippine associate, TVIRD, has to date produced copper and zinc concentrates from its Canatuan mine and is advancing its Agata Nickel DSO operation and Balabag Gold-Silver project.
TVI holds a 30.66% indirect interest in TVIRD and the assets owned by TVIRD (including Canatuan, Balabag, the Agata Mining and the Agata Processing Joint Ventures, the Pan de Azucar Mining and Processing Joint Ventures, and various exploration properties), a 23.0% equity interest in Foyson Resources Limited, a 14.4% equity interest in Mindoro Resources Ltd., 100% of TG World Energy Corp., and a 10% interest 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%).
TVIRD continues to be operator of the Agata and Pan de Azucar joint ventures. 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 direct shipping ore ("DSO") operation of the high-iron laterite resources at the Agata Project. Shipping of the high-iron laterite is expected to commence through the third quarter of 2014.
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 Prime Resource Holdings, Inc.
PRHI is a wholly-owned subsidiary of Prime Asset Ventures, Inc. ("PAVI"). PAVI is a holding corporation of utilities engaged in various industries which include water distribution infrastructure, energy and power generation as well as retail distribution, cable and antennae television, and telecommunications.
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.
IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking information (referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "plan", "intend", "estimate", "scheduled", "expect", "may", "will", "should", or similar words suggesting future activities or outcomes. In particular, this news release includes forward-looking statements respecting certain transactions provided for in definitive agreements entered into with PRHI (the "Transactions") and uses of the proceeds advanced by PRHI in connection with the Transactions. Forward-looking statements relating to the Transactions are based upon the terms of the definitive agreements entered into with PRHI. Forward-looking statements respecting use of proceeds are based upon various assumptions and factors, including, but not limited to, the terms of the definitive agreements entered into with PRHI, discussions between representatives of TVI and representatives of PRHI and the current business plans, budgets and strategies of TVI and its subsidiaries and affiliates, all of which are subject to change. 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 contained in this news release are made as of the date hereof and TVI does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable Canadian securities law. The forward-looking statements of TVI contained in this news release are expressly qualified, in their entirety, by this cautionary statement. Various risks to which TVI, its subsidiaries and affiliates are exposed in the conduct of their business are described in detail in the TVI's Annual Information Form for the year ended December 31, 2013, which was filed on SEDAR on March 19, 2014, and is available at www.SEDAR.com.
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TVI Pacific Inc.