TVI Pacific Inc. Announces Financing Opportunity and Proposed Third-Party Investment in TVI International Marketing Ltd.

TSX: TVI  OTCQX: TVIPF

CALGARY, Oct. 21, 2013 /CNW/ - TVI Pacific Inc. (TSX:TVI) (OTCQX:TVIPF) ("TVI" or the "Company") announced today that it has entered into a letter of interest (the "Proposal"), dated October 18th, 2013, which sets out certain terms of proposed transactions involving Prime Asset Ventures, Inc., an arm's-length Philippines corporation ("PAVI").  The proposed transactions contemplated by the Proposal consist of a private placement (to PAVI) of common shares of the Company (the "Private Placement") and the acquisition by PAVI of an effective 68.42% interest in the Company's indirect subsidiary, TVI International Marketing, Ltd. ("TVI Marketing"), through which TVI's Philippines assets are held.

Proposed Private Placement

The Proposal contemplates that PAVI will directly subscribe for and purchase 33,333,333 common shares of TVI (the "TVI Pacific Shares") at a price of USD $0.03 per share (USD $1 million in the aggregate).  If the Private Placement is completed, the TVI Pacific Shares would represent approximately 5% of the total number of issued and outstanding common shares of TVI (based upon 622,137,039 common shares currently outstanding and assuming there are no further issuances of shares from the treasury of the Company prior to closing of the Private Placement).  The net proceeds from the sale of the TVI Pacific Shares are expected to be used by TVI primarily for working capital.

Proposed Acquisition of an Effective 68.42% Interest in TVI Marketing

The Proposal also contemplates the acquisition by PAVI of 68.42% of ordinary voting shares of TVI Marketing ("TVI Marketing Shares"), representing an effective 68.42% interest in TVI Marketing's assets, business and operations in the Philippines, through: (а) the issuance of TVI Marketing Shares to PAVI for a total investment of USD $11.5 million; and (b) а secondary sale by TVI Limited, a wholly-owned subsidiary of TVI, of outstanding TVI Marketing Shares to PAVI at a sale price of USD $10 million.  The funds received from the issuance of TVI Marketing Shares to PAVI are expected to be used for working capital and to advance various projects, including, most notably, the Agata direct shipping ore project, located in Agusan del Norte, Mindanao, the Philippines.  The funds received from the secondary sale of TVI Marketing Shares by TVI Limited are expected to be used for working capital and to advance various other projects of TVI.

Conditions, Exclusivity and Due Diligence

Completion of the transactions contemplated by the Proposal (the "Transactions") will be subject to the satisfaction or waiver of various conditions, including committee or board approval, as applicable, of both TVI and PAVI, receipt of all necessary regulatory and third party approvals, the negotiation, execution and delivery of definitive transaction documentation by TVI and PAVI, the completion of due diligence investigations and there being no material adverse changes affecting the Company or TVI Marketing.  Under the Proposal, both TVI and PAVI have the right to conduct due diligence inquiries in respect of each other until close of business (Manila, Philippines time) on Thursday, November 7, 2013.  TVI and PAVI may consider other transaction structures if they are determined to be more efficient from a tax, legal, regulatory or financial perspective.

The Proposal provides for a 30 day exclusivity period (running until November 17, 2013), during which TVI has agreed to deal exclusively, with limited exception, with PAVI with a view to negotiating the definitive agreements required to implement the Transactions.  Subject to the terms of the Proposal, TVI may still consider alternative investment offers.

A Special Committee was established by the board of directors to consider the Proposal and negotiate the terms of the definitive agreements required to implement the Transactions as a result of the potential for a conflict of interest arising from PAVI's desire to retain certain key employees following closing of the Transactions and the potential for a finder's fee to be paid to a party in which a director has an interest.  The Special Committee has met a number of times to consider the Proposal, review available alternatives and subsequently provided a recommendation to the board of directors that the Company proceed with the Proposal, which recommendation was accepted and the TVI board of directors unanimously resolved (with the two directors who are not also members of the Special Committee abstaining) to proceed with the Proposal.

With the exception of certain provisions (exclusivity, confidentiality and costs), the Proposal is nonbinding and there can be no assurance that the Transactions will be completed on the terms set out in the Proposal or at all.

Mr. Clifford M. James, TVI's President and Chief Executive Officer noted: "This represents a very exciting opportunity for TVI Pacific to partner with a significant Philippine partner who is prepared to assist us in our efforts to advance our Philippines mining projects."

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.  The Company's affiliate, TVI Resource Development (Phils.) Inc produces copper and zinc concentrates from its Canatuan mine and is advancing its Balabag Gold-Silver project. 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.

About Prime Asset Ventures, Inc.

Prime Asset Ventures, Inc. is a holding corporation of utilities engaged in various industries which include water distribution infrastructure, energy and power generation which includes retail distribution, cable and antennae television, and telecommunications.

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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 the Transactions and the anticipated uses of proceeds from sales of securities associated with the Transactions.  Forward-looking statements relating to the Transactions are based upon the terms set out in the Proposal.  Forward-looking statements respecting use of proceeds are based upon various assumptions and factors, including, but not limited to, the terms of the Proposal, discussions between representatives of the Company and representatives of PAVI and the current business plan, budget and strategy of the Company, its subsidiaries and affiliates, all of which are subject to change.

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 Transactions, those risks and uncertainties include a failure to close one or more of the Transactions on the terms outlined in the Proposal and this news release or at all due to renegotiation of the terms and conditions of the Transactions by the parties prior to closing, or a failure to satisfy one or more conditions, such as conditions relating to due diligence, the negotiation of definitive agreements relating to the Transactions and the receipt of any necessary 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 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 the Company 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 Company's Annual Information Form for the year ended December 31, 2012, which was filed on SEDAR on March 19, 2013, and is available at www.SEDAR.com.

SOURCE TVI Pacific Inc.



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