CALGARY, June 24, 2013 /CNW/ - TVI Pacific Inc. (TSX:TVI) (OTCQX:TVIPF) ("TVI" or the "Company") announced today it has agreed to loan, pursuant to a secured promissory note, up to CAD $1.3 million to joint venture partner Mindoro Resources Ltd. (TSXv: MIO; ASX: MDO) ("Mindoro"). The loan will be used by Mindoro to help fund its operations for the next twelve months and to finance an initial acquisition payment to Minimax Mineral Exploration Corporation ("Minimax") for Mindoro to acquire the remaining 25% interest in the Agata project. Mindoro currently holds a 75% interest in the Agata project and is negotiating an option to acquire the additional 25% from its partner Minimax. Minimax is a private Philippine company based in Makati City, Philippines that provides mineral and precious metal exploration and mining services.
TVI and Mindoro Resources have signed four joint venture agreements, previously announced on October 1, 2012, relating to the Agata and Pan de Azucar mining projects located in the Philippines on the Islands of Mindanao and Panay, respectively. The joint ventures present TVI with multiple growth opportunities for near-term and medium-term cash flow generating potential. Under the agreements TVIRD, TVI's Philippine affiliate, has the opportunity to earn up to a 60% interest and will act as operator of the projects. The balance of the interest is held by Mindoro and Minimax, from whom Mindoro is negotiating to acquire the additional interest that would increase Mindoro's share to 40% in the Agata high iron laterite direct shipping operation (DSO), limestone DSO operation, and Agata processing operation.
As previously disclosed in February 2013, the Agata Nickel Project is being advanced under the following two stage development objective:
- Stage 1: Undertake a feasibility study and permitting for a DSO project, leading, subject to economic viability, to commencing a DSO operation in late 2013.
- Stage 2: Advance preferred processing technology to pilot testing, followed by a definitive feasibility study by the end of 2013. As previously disclosed on June 6, 2013, TVI has commenced pilot-plant testing which will further define the technological parameters to be used in producing a Bankable Feasibility Study.
Terms of the Promissory Note
TVI may advance up to CAD $1.3 million to Mindoro pursuant to an agreed upon schedule of monthly draws. Funds will be repayable within twelve months of the first draw down or may be repaid earlier, together with interest and without penalty. Interest will be calculated at a minimum of 15% per annum. The promissory note is secured by shares in Mindoro's wholly owned subsidiary, MRL Nickel Philippines Inc.
Joint Venture Amendments
TVI and Mindoro have also agreed to amend the following terms of the original joint venture agreements (full terms of the original joint venture agreements are available in the Company's July 6 and October 1, 2012 press releases):
- TVI's contributions to the Agata Mining Joint Venture and Agata Processing Joint Venture will be for shares in the applicable joint venture, rather than as paid in capital, with such shares to be issued as earned and placed in escrow until TVI's full 60% interest is earned. TVI will not retain any interest in the Agata Mining Joint Venture if it withdraws prior to commencing a DSO operation and will not retain any interest in the Agata Processing Joint Venture if it withdraws prior to completing a Definitive Feasibility Study.
- TVI's minimum spending commitments pursuant to the Pan de Azucar Joint Venture agreements are extended by one year, from December 31, 2013, to December 31, 2014.
"This transaction demonstrates the confidence and continued support TVI has for our joint venture partner Mindoro Resources," said Cliff James, Chairman and CEO of TVI Pacific Inc. "Providing Mindoro with the resources to secure a 100% interest in Agata will provide us the ability to maximize the potential value of the project that our operations team has been advancing since the formation of our joint venture."
About TVI Pacific Inc.
TVI Pacific Inc. is a publicly-traded Canadian company that is focused on the production, development, exploration and acquisition of resource projects in the Philippines and Southeast Asia. TVI produces copper and zinc concentrates from its Canatuan mine. 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.
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.
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. 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. 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.
SOURCE: TVI Pacific Inc.
For further information:
Vice President, Investor & Corporate Relations
TVI Pacific Inc.