TVI Pacific second quarter: strong cash flow from low-cost production



    (TSX: TVI)

    
    -   Canatuan mine highlights for the three months ended June 30, 2009:
           -  Segmented gross revenues of $12.6 million
           -  Segmented net income of $4.1 million
           -  Average cash cost for production from the Canatuan mine of US
              $0.58/Cu lb eq.
    -   Five copper concentrate shipments completed to date brings total
        expected gross revenues to US$27 million
    

    CALGARY, Aug. 14 /CNW/ - TVI Pacific Inc. ("TVI" or the "Company") today
released second quarter operating statistics for the Canatuan Mine in the
southern Philippines, which has generated gross revenues of $20.7 million
since the initiation of commercial operations (targeting the sulphide zone) on
March 1, 2009. Canatuan is operated by TVI's Philippine affiliate, TVI
Resource Development (Phils.), Inc. ("TVIRD"). All numbers in this News
Release are expressed in Canadian dollars unless otherwise indicated. For the
three month period ended June 30, 2009, the Canatuan Mine produced 12,229 dry
metric tonnes of copper concentrates.
    The Company has filed its unaudited second quarter financial statements
and associated management's discussion and analysis with certain securities
regulators in Canada. Copies of these documents are available on the TVI
website at www.tvipacific.com and will be available under the Company's
profile on the SEDAR website at www.sedar.com. Financial information relating
specifically to the Canatuan Mine is set out in Note 14 ("Segmented
information") of the Company's consolidated interim financial statements. The
Canatuan Mine is currently the Company's main operating segment and principal
source of cash flow.
    Certain statements in this News Release constitute forward-looking
statements, including statements respecting anticipated operational
improvements at the Canatuan Mine in Q3 2009, anticipated exploration
activities in the vicinity of the Canatuan mine and at other TVIRD prospects
in the Philippines, the sources of funds to support exploration activities and
the creation and finalization of development and exploration plans for various
TVIRD prospects in the Philippines.
    "A number of factors have contributed to the improvements in performance
that were achieved at the Canatuan Mine in the most recent quarter", stated
Cliff James, TVI's President and Chief Executive Officer. "In addition to
steadily improving the throughput and recoveries at Canatuan since the
conclusion of the commissioning phase of the new operation in early March
2009, the mine team has been able to decrease the average cash cost of
production to US$0.58 per copper pound equivalent. The Canatuan operation has
also benefited from the recovery of market copper prices, which have continued
their upward trend into the third quarter."

    
    Canatuan mine operational highlights for the first and second quarters of
    2009:
    -------------------------------------------------------------------------
    Operations:                      Three months ended   Three months ended
    -----------                        March 31, 2009        June 30, 2009
    -------------------------------------------------------------------------
    Total tonnes of ore
     processed (t)                             89,884              104,390
    -------------------------------------------------------------------------
    Average tonnes of ore
     processed per day (t)                        999                1,147
    -------------------------------------------------------------------------
    Copper recovery (%)                         61.80                86.93
    -------------------------------------------------------------------------
    Ore copper grade (%)                         2.46                 2.43
    -------------------------------------------------------------------------
    Ore gold grade (g/t)                         1.18                 0.77
    -------------------------------------------------------------------------
    Ore silver grade (g/t)                     135.06                59.22
    -------------------------------------------------------------------------
    Concentrates produced
     (dry weight - t)                           6,460               12,229
    -------------------------------------------------------------------------
    Concentrate copper grade (%)                21.20                18.03
    -------------------------------------------------------------------------
    Concentrate gold grade (g/t)                 4.17                 3.82
    -------------------------------------------------------------------------
    Concentrate silver grade (g/t)             573.86               280.53
    -------------------------------------------------------------------------
    Average cash costs per Cu lb eq
     (US$)(*)                                    0.79                 0.58
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Offtake
    -------
    -------------------------------------------------------------------------
    Copper concentrates shipped
     (dry weight - t)                           5,351               10,136
    -------------------------------------------------------------------------
    Revenue from concentrates shipped
     (gross - US$)                          6,447,252           10,588,550
    -------------------------------------------------------------------------
    Average copper price received
     (US$/lb)                                    1.77                 2.11
    -------------------------------------------------------------------------
    (*) Excludes selling expenses. For the three months ended March 31, 2009,
        the copper pound equivalent for metals shipped was calculated using
        commodity prices of US$1.77/lb for copper, US$932.95/oz for gold and
        US$13.45/oz for silver. For the three months ended June 30, 2009, the
        copper pound equivalent for metals shipped was calculated using
        commodity prices of US$2.11/lb for copper, US$913.52/oz for gold and
        US$13.42/oz for silver. The copper pound equivalent for metals in
        ending inventory at June 30, 2009, was calculated using commodity
        prices of US$2.32/lb for copper, US$937.75/oz for gold and US
        $13.94/oz for silver.


    Financial highlights for the three months ended June 30, 2009:
        -  During the three month period ended June 30, 2009, TVI earned
           consolidated net income of $0.7 million. For the period, the
           Canatuan mine segment contributed $4.1 million of net income.
           Adding back the non-cash amortization and accretion expense of
           $2.0 million, the mine segment produced net income before
           amortization and accretion expense of $6.1 million. This
           represented approximately 48% of sales revenue from the segment
           for the quarter.

        -  Exploration expenditures in Q2 2009 decreased by approximately
           $0.2 million, or 72%, in comparison to Q2 2008. TVIRD's main focus
           during the quarter was to increase production at the Canatuan
           mine. TVIRD expects to expand its exploration efforts in the third
           quarter of 2009, supported by cash flows from operations at
           Canatuan.

        -  The Company recognized approximately $1.9 million in interest
           expense during the three months ended June 30, 2009, primarily
           related to the term loan signed in January 2009.
    

    Outlook
    The revenue and cash flow generated by the Canatuan Mine in the second
quarter of 2009 is a result of the second and third concentrate shipments in
May 2009, as well as partially recognized revenue from the fourth shipment
that was completed July 2, 2009. Approximately 31% of the gross revenue from
the fourth shipment was recognized in the quarter, while the balance will be
recognized in the third quarter. The TVIRD mine team at Canatuan is carrying
out additional infrastructure and equipment improvements in an effort to
further increase throughput at the mine facility and management of the Company
expects further improvements in that regard into Q3 2009. As well, the Company
is considering alternatives to raise additional capital, including debt and
equity financings.
    TVI management believes that the various TVIRD exploration projects,
especially the Canatuan near-mine tenements and the Tamarok / Tapisa project,
represent compelling opportunities for the Company. Exploration activities in
the Philippines for the balance of 2009 are expected to be partially funded by
cash flow generated from the Canatuan Sulphide Project.
    TVIRD is working towards a staged development plan for the Balabag
exploration project, to create initial plans for its other exploration
tenements, and to evaluate opportunities to acquire new properties to expand
its portfolio of properties in the Philippines. In addition, TVIRD continues
to put the community and regulatory preparations in place for an exploration
program in the vicinity of the Canatuan mine to determine if various near-mine
prospects identified by past exploration can be economically mined.
    TVI's financing strategy is to market locally in Canada, as well as
internationally in Asia, Europe and the United States. The Company is in
discussions with potential investors in the Philippines, as well as in Canada.
TVI is also considering strategic alliances or joint ventures with other
mining companies to benefit from economies of scale. There can be no assurance
that any of the current discussions will result in further investments in the
Company or that the consideration of strategic alliances and joint ventures
will lead to the establishment of relationships with third-party mining
organizations.

    Non-GAAP Measures
    Net income before amortization and accretion expense is a non-GAAP
measure that represents income before non-cash expenses in amortization and
accretion expense. This measure should not be considered an alternative to, or
more meaningful than, net income (the most directly comparable measure
calculated in accordance with GAAP). Management believes that net income
before amortization and accretion expense is a useful supplemental measure to
analyze the Company's ability to generate cash income. This measure does not
have any standardized meaning prescribed by Canadian GAAP and is, therefore,
unlikely to be comparable to similar measures used by other issuers.

    
    About TVI Pacific Inc. (TSX: TVI)
    ---------------------------------
    

    TVI Pacific Inc. is a publicly traded Canadian mining company focused on
exploring for, developing and producing precious and base metals within
district scale systems 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.

    Certain information set out in this News Release constitutes
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", "scheduled", "to be", "will be" and similar expressions.
Forward-looking statements in this News Release are based upon the opinions
and expectations of management of the Company as at the effective date of such
statements and, in certain cases, information received from or disseminated by
third parties. Although the Company 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 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 mineral reserves; timing, results and costs of exploration
and development activities; 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
equipment and availability of personnel. 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. Forward-looking information
respecting anticipated operational improvements at the Canatuan mine in Q3
2009 is based upon TVIRD's current budget and overall strategy for Canatuan
(which plans, budget and strategy are all subject to change), current and
anticipated financial obligations of TVIRD (including the terms and repayment
schedules associated with the term loan facility between TVIRD and LIM Asia
Multi-Strategy Fund Inc. and LIM Asia Special Situations Master Fund Ltd.),
the status of current operations at the Canatuan mine site and management's
experiences with historical expansions of processing capacity at the Canatuan
mine. Forward-looking information respecting anticipated exploration
activities in the vicinity of the Canatuan mine and at other TVIRD prospects
in the Philippines, is based upon TVIRD's current budget and overall strategy
for Canatuan and its other Philippine's prospects (which plans, budget and
strategy are all subject to change), current and anticipated financial
obligations of TVIRD (including the terms and repayment schedules associated
with the term loan facility between TVIRD and LIM Asia Multi-Strategy Fund
Inc. and LIM Asia Special Situations Master Fund Ltd.) and the status of
current operations at the Canatuan mine site. Forward-looking information
respecting the sources of funds to support exploration activities is based
upon current and anticipated production of copper concentrates from the
Canatuan mine and the terms of sale of such production under a long-term
off-take agreement with a third party. Forward-looking information respecting
the creation and finalization of development and exploration plans for various
TVIRD prospects in the Philippines is based upon the current status of such
plans and management's historical experiences with the development and
finalization of such plans. 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 the Company and its
affiliates are exposed in the conduct of their business (including mining
activities) are described in detail in the Company's Annual Information Form
for the year ended December 31, 2008, which was filed on SEDAR on March 26,
2009, and is available under the Company's profile at www.SEDAR.com. Subject
to applicable securities laws, the Company does not undertake any obligation
to publicly revise the forward-looking statements included in this News
Release to reflect subsequent events or circumstances.

    
    The Toronto Stock Exchange has neither approved nor disapproved of the
    information contained herein.
    





For further information:

For further information: Investor Relations, (403) 265-4356 or
tvi-info@tvipacific.com


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