TSX: TVI OTCQX: TVIPF
CALGARY, Feb. 14, 2013 /CNW/ - TVI Pacific Inc. (TSX: TVI) (OTCQX:
TVIPF) (TVI or the Company) announces that it will proceed with an
amended Tranche 2 subscription agreement with Foyson Resources Limited
(Foyson). TVI originally signed a Tranche 2 subscription agreement and
associated joint venture agreements on August 28, 2012. Both Foyson and
TVI have agreed to amendments to the transaction documents and have
also agreed on various associated issues. The amended Tranche 2
agreement is subject to approval by Foyson shareholders at a meeting
that Foyson will convene on or before April 18, 2013. All amounts
stated in this news release are in Australian Dollars unless otherwise
Based on discussions with Foyson and under the amended terms, TVI will:
subscribe for 142,857,143 Foyson shares at A$0.007 for a total $1.0
million investment and receive 80 million options from Foyson,
exercisable at $0.015 prior to December 31, 2014, bringing TVI's
ownership of Foyson to 29.5% on a fully diluted basis (subject to
Foyson shareholder approval);
make a Convertible Loan to Foyson in the amount of A$600,000 with the
right (but not the obligation) to request repayment from Foyson through
the issuance of 75 million shares and 75 million options to TVI
(subject to Foyson Shareholder approval);
focus resources on the Amazon Bay iron sands project with the intent of
fast-tracking the development of an operating mine; and
work jointly with Foyson to identify a resource project with the
potential of near-term development and cash flow potential.
Mr. Clifford M. James, Chairman and CEO of TVI, states: "We are very
pleased with the amended agreement and arrangements with Foyson, which
enable us to focus on the joint venture projects that will benefit the
greatest from TVI's financial resources and technical expertise."
TVI originally signed agreements with Foyson on the following projects
located in Papua New Guinea: the Amazon Bay Iron Sands Joint Venture
Project, an Amazon Bay Royalty Agreement, the New Britain Gold/Copper
Joint Venture Project, the Massau and Tanga Island Option Agreement,
and the New Ireland Option Agreement. Along with amending the Tranche 2
agreement, TVI and Foyson also held discussions regarding these
projects and the development strategies for each and have subsequently
agreed to amendments relating to the projects. Specifically, TVI will
focus its technical and financial resources on the Amazon Bay iron
sands project and seek to fast track the development of an operating
As TVI's focus is on projects with the opportunity for near-term
development and production, the Company and Foyson have also agreed to
jointly identify a resource project with near-term cash flow potential.
Tranche 2 Placement
TVI completed the Tranche 1 subscription agreement comprising the
purchase by TVI of 68 million Shares through a private placement
representing approximately 8.93% at a purchase price of A$0.013 per
Share (A$884,000 in the aggregate) on September 3, 2012.
Under the original Tranche 2 agreement, TVI agreed to purchase 160
million shares of Foyson at a purchase price of A$0.015 per Share
(A$2.4 million in the aggregate). The original agreement also provided
that (i) in connection with the closing of Tranche 2, TVI (or a
subsidiary or other affiliate) would also be granted, for nominal
aggregate consideration, options to subscribe for and purchase up to an
additional 140 million Shares of Foyson; and (ii) each option will
entitle the holder to purchase, subject to adjustment in accordance
with the terms of the option, one Foyson share at a price of A$0.03.
On a fully diluted basis, this would have resulted in TVI owning
approximately 34.7% of Foyson.
Under the amended Tranche 2 agreement, TVI will subscribe for
142,857,143 Foyson shares at A$0.007 (A$1.0 million in the aggregate).
Foyson will also issue 80 million options to TVI, exercisable at
$0.015, prior to December 31, 2014. Completion of the Tranche 2
placement is subject to Foyson's shareholders' approval at a meeting
that Foyson will convene on or before April 18, 2013.
On completion of the Tranche 2 placement, TVI will hold approximately
29.5% of the listed shares in Foyson (on a fully diluted basis). TVI
and Foyson have agreed that in the period until June 30, 2014, TVI will
not seek to increase its percentage holding, except as provided for
under the current agreements, without prior approval of Foyson.
Under the original agreement, TVI had agreed to make a loan to Foyson in
the principal amount of A$400,000 with an interest rate of 8% per annum
repayable before November 30, 2012. As per the amended agreement, TVI
has agreed to restructure the loan to a Convertible Loan in the amount
of A$600,000, repayable on June 30, 2014 at zero interest, if not
previously converted to securities.
In the six-month period prior to June 30, 2014, TVI will have the right
(but not the obligation) to request repayment of the Convertible Loan
by Foyson through the issuance of 75 million shares and 75 million
options to TVI. The options will be exercisable prior to December 31,
2014 at $0.015. Foyson will seek the approval of its shareholders for
this potential loan conversion at a shareholder meeting Foyson will
convene on or before April 18, 2013.
Joint Venture Agreements
TVI will continue to proceed with the Amazon Bay joint venture. To date,
the Company has invested over $725,000 in the project and has committed
to a minimum project spend of A$2 million by December 31, 2013. TVI
will leverage its strong technical expertise and experience in
completing mining projects in the Philippines on time and on budget to
seek ways to fast track the development of an operating project at
While Foyson successfully confirmed the presence of a copper porphyry
system in the New Britain joint venture exploration program completed
at Atui in New Britain, both TVI and Foyson agree the project would be
best optimized by introducing a major copper/gold producer to replace
TVI. Although TVI has invested over $790,000 in the New Britain Joint
Venture, the Company's strategy is to advance projects with near-term
production potential and will therefore focus its resources on Amazon
TVI will cooperate with Foyson in identifying a possible replacement
joint venture partner and may choose to withdraw from the New Britain
joint venture upon the earlier of Foyson introducing a new partner or
September 30, 2013.
Appointment of Directors
Following completion of the Tranche 2 closing, TVI will be entitled to
appoint two directors to the Foyson Board out of a maximum of five
About TVI Pacific Inc. (TSX: TVI) (OTCQX: TVIPF)
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. The Company produces
copper and zinc concentrates from its Canatuan mine and is advancing
its 100% owned Balabag Gold-Silver project towards production in 2014.
TVI is a partner/operator in several joint venture projects in the
Philippines and Papua New Guinea and also has an interest in an
offshore Philippine oil property.
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. The forward-looking
statements set out in this news release include information relating to
proposed transactions involving Foyson. Forward-looking statements
relating to the proposed transactions involving Foyson are based upon
the terms and conditions set out in the amendment agreement and joint
venture related agreements noted above.
Forward-looking statements are subject to certain risks and
uncertainties that could cause actual events or outcomes to differ
materially from those anticipated or implied by such forward-looking
statements. With respect to the proposed transactions involving Foyson,
those risks and uncertainties include a failure to close one or more of
the proposed transactions on the terms outlined in this news release
due to renegotiation of those terms by the parties prior to closing, or
a failure to satisfy one or more conditions, such as conditions
relating to the receipt of any necessary regulatory approvals and
Foyson shareholder approval. 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 contained herein are expressly qualified
by this cautionary statement.
The Toronto Stock Exchange has neither approved nor disapproved of the
information contained herein.
SOURCE: TVI Pacific Inc.
For further information:
TVI Pacific Inc.