2014

TVI Pacific Inc. announces the signing of definitive joint venture agreements with Mindoro Resources Ltd. (and an affiliate) and the acquisition of common shares and share purchase warrants of Mindoro

TSX:TVI  OTCQX:TVIPF

CALGARY, Oct. 1, 2012 /CNW/ - TVI Pacific Inc. ("TVI" or the "Corporation") (TSX: TVI) (OTCQX: TVIPF) announced today that it and TVI Resource Development Phils., Inc. ("TVIRD") have entered into various joint venture agreements with Mindoro Resources Ltd. ("Mindoro"), and an affiliate of Mindoro, relating to the Agata and Pan de Azucar mining projects in the Philippines.  As well, TVI has acquired voting shares ("Shares") and share purchase warrants of Mindoro (a TSX Venture Exchange ("TSXV") listed issuer (TSXV: MIO) that also has securities listed on the Australian Securities Exchange (ASX: MDO)).  The definitive joint venture agreements were entered into pursuant to a Heads of Agreement (the "HOA"), dated July 6, 2012 (as amended), which also contemplated the acquisition by TVI of Shares and share purchase warrants of Mindoro.  Information concerning the various transactions provided for in the HOA was disseminated on July 6, 2012 by TVI, in its news release entitled:  "TVI Pacific Inc. Announces Joint Venture Opportunities And Equity Investment With Mindoro Resources Ltd."

Mr. Clifford M. James, the President and Chief Executive Officer of TVI, noted: "We are very pleased to have entered into various joint venture agreements with Mindoro involving the Agata and Pan de Azucar projects.  As previously indicated, we believe that those projects lend themselves to the type of strategy we have successfully deployed elsewhere in the Philippines to undertake mine development at low cost and on time. The work we have done to date indicates that the Agata and Pan de Azucar projects fit with our acquisition strategy of seeking long-life mining projects that have the potential to generate short term cash flow."

Joint Venture Arrangements

The following joint venture agreements between MRL Nickel Philippines, Inc. ("MRL") (a subsidiary of Mindoro), TVIRD, Minimax Mineral Exploration Corporation ("Minimax") and TVI were entered into as contemplated by the HOA (as amended):

        (a)      the Agata Mining Option and Joint Venture Agreement, under which TVIRD has an option to earn a 60% interest in the Agata Mining Joint Venture upon commencement of commercial production ("Mining Operation"), subject to (i) TVIRD having expended a minimum of C$2 million within 12 months of the date of the agreement, and (ii) commercial production at Agata having commenced within 3 years of the date of the agreement.  Under this agreement, TVIRD is required to fund all expenditures associated with the establishment of the Mining Operation.
 
        (b)      the Agata Processing Option and Joint Venture Agreement, under which TVIRD has the right to earn a 60% interest in the Agata Processing Joint Venture upon delivery of a definitive feasibility study respecting nickel processing at Agata (including pilot-scale metallurgical testing, third-party engineering studies and documentation), subject to TVIRD having expended a minimum of C$2 million within 12 months of the date of the agreement and completing the definitive feasibility study within 4 years of the date of the agreement.  Under this agreement, TVIRD is required to fund all required expenditures associated with the preparation of the definitive feasibility study.
 
        (c)       the Pan De Azucar Mining Option and Joint Venture Agreement, under which TVIRD has an option to earn a 60% interest in the Pan de Azucar Mining Joint Venture by: (i) making minimum aggregate expenditures of C$2 million in respect of the Pan de Azucar mining project  prior to the first anniversary of the date that a declaration of mining project feasibility is issued in respect of that project (the "Feasibility Declaration Date"); and (ii) sole funding the Pan de Azucar mining project to the point of commercial production, provided commercial production is achieved on or prior to the third anniversary of the Feasibility Declaration Date.  The Pan de Azucar Mining Option and Joint Venture Agreement contemplates that TVIRD will make expenditures in respect of the Pan de Azucar mining project in an aggregate amount of not less than C$500,000, prior to the date that is 12 months following the date of that agreement, as TVIRD considers appropriate in its discretion (which may include the payment of occupation fees and amounts associated with minimum work programs required by applicable governmental authorities in the Philippines under the terms and conditions of the applicable Pan de Azucar title documents), with any such expenditures being creditable against the C$2 million of aggregate expenditures noted above.
 
        (d)       the PDA Processing Option and Joint Venture Agreement, under which TVIRD will have the right to earn up to a 60% interest in the Pan De Azucar Processing Joint Venture in two stages as follows: (i) a 51% interest, by making minimum aggregate expenditures of C$2 million in respect of the Pan de Azucar processing project on or prior to the first anniversary of the date that a declaration of mining project feasibility is issued in respect of the processing project (the "Processing Declaration Date"); and (ii) a 9% interest by making additional minimum aggregate expenditures of C$3 million in respect of the processing project on or prior to the fourth anniversary of the Processing Declaration Date.  The PDA Processing Option and Joint Venture Agreement contemplates that TVIRD will make expenditures in respect of the Pan de Azucar processing project in an aggregate amount of not less than C$500,000, prior to the date that is 12 months following the date of that agreement, as TVIRD considers appropriate in its discretion (which may include the payment of occupation fees and amounts associated with minimum work programs required by applicable governmental authorities in the Philippines under the terms and conditions of the applicable Pan de Azucar title documents), with any such expenditures being creditable against the C$2 million of aggregate expenditures noted above.

Execution and delivery of the joint venture agreements noted above was a condition to completion of the first tranche private placement described below in this news release.

Private Placement

The HOA (as amended) provided for the acquisition by TVI (or a wholly-owned subsidiary or other affiliate of TVI) of an equity interest in Mindoro, by way of private placement (undertaken in two tranches), subject to the receipt of all necessary regulatory approvals and the satisfaction or waiver of various other conditions.

On September 28, 2012, TVI acquired ownership and control of 18,779,353 units ("Units") of Mindoro pursuant to a subscription agreement dated as of that date.  TVI acquired the Units by way of a private placement (the "First Tranche Private Placement") at a price of $0.05 per Unit ($938,968 in the aggregate).  Each Unit consisted of one Share and one common share purchase warrant (a "Warrant").  Subject to adjustment, each Warrant entitles TVI to purchase one additional Share, at a price of $0.10 per Share, at any time and from time to time until September 28, 2017.  The 18,779,353 Shares acquired by TVI pursuant to the First Tranche Private Placement represent approximately 6.9% of the total number of issued and outstanding Shares as at the date of this news release.  Assuming the exercise of all of the Warrants acquired by TVI pursuant to the Private Placement, TVI would hold 37,558,706 Shares, representing approximately 12.9% of the total number of issued and outstanding Shares as at the date of this release.  TVI did not own any securities of Mindoro prior to completion of the First Tranche Private Placement. The Shares and Warrants acquired by TVI in connection with the First Tranche Private Placement are legally and beneficially owned by TVI. TVI relied upon Section 2.3 of National Instrument 45-106 - Prospectus and Registration Exemptions to acquire the Units on the basis that TVI is an "accredited investor".

As contemplated by the HOA (as amended), TVI has entered into a second subscription agreement with Mindoro, which provides for the acquisition by TVI of an additional 44,336,206 Shares and 44,336,206 Warrants (the "Second Tranche Private Placement"), subject to the satisfaction or waiver of various conditions, including approval of the shareholders of Mindoro and completion by TVI of satisfactory due diligence.  Mindoro has called a meeting of its shareholders to consider and approve the Second Tranche Private Placement, among other things, and such meeting is scheduled to be held on October 9, 2012.

The Units purchased by TVI in connection with the First Tranche Private Placement were acquired by it for investment purposes.  In addition to Shares acquired in connection with the First Tranche Private Placement and any Shares acquired in connection with the Second Tranche Private Placement, TVI may acquire additional securities of Mindoro, dispose of some or all of the existing (or any additional) securities of Mindoro beneficially owned or controlled by it or may continue to hold the existing (or any additional) securities of Mindoro beneficially owned or controlled by it, depending on market conditions and other considerations.

In connection with its acquisition of the Units, TVI Pacific Inc. intends to file an early warning report, under section 5.2 of Multilateral Instrument 62-104 - Take-over Bids and Issuer Bids, with certain securities regulatory authorities in Canada.  To obtain a copy of such report please contact Ms. Raina Vitanov, at (403) 265-4356.  A copy of such report is also expected to be available on SEDAR, under Mindoro's issuer profile.

About Mindoro

Mindoro is an Alberta incorporated company engaged in mining exploration in the Philippines.  The common shares of Mindoro are listed on the TSX-V and on the ASX. Mindoro trades under the symbol MIO on the TSX-V and under the symbol MDO on the ASX.  A copy of Mindoro's announcement respecting the transactions summarized in this news release can be accessed on www.sedar.com or on Mindoro's website, www.mindoro.com.

About TVI

TVI is a publicly-traded Canadian company focused on the production, development, exploration and acquisition of resource projects in the Philippines.  The Corporation's affiliate, TVI Resources Development Phils., Inc., produces copper and zinc concentrates from its Canatuan mine.  TVI also has an indirect 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").  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 interests that may be earned by TVIRD in the Agata and Pan de Azucar joint ventures, the obligations of TVIRD (including funding obligations) in relation to the Agata and Pan de Azucar joint ventures and the proposed purchase by TVI of additional securities of Mindoro.  Forward-looking statements relating to interests that may be earned by TVIRD in the Agata and Pan de Azucar joint ventures, the obligations of TVIRD (including funding obligations) in relation to the Agata and Pan de Azucar joint ventures and the acquisition of additional Mindoro securities by TVI are based upon the terms and conditions of the joint venture agreements and the second subscription agreement 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 interests that may be earned by TVIRD in the Agata and Pan de Azucar joint ventures and the obligations of TVIRD (including funding obligations) in relation to the Agata and Pan de Azucar joint ventures, those risks and uncertainties include, but are not limited to: (A) a failure on the part of TVIRD to fund required expenditures at Agata or Pan de Azucar due to, among other things (i) changes in TVIRD strategic priorities, due diligence findings, changes in laws or regulations affecting mining operations in the Philippines (including the profitability of such operations), and other factors, (ii) changes in TVIRD budgets and (iii) limited availability of funds; and (B) a determination on the part of TVIRD not to pursue projects contemplated by one or more of the joint venture agreements noted above for technical, economic, legal or other reasons (including, without limitation, a failure to obtain required permits or other governmental or regulatory approvals. With respect to the acquisition of additional securities of Mindoro, such risks and uncertainties include, but are not limited to, a failure on the part of TVI to purchase Shares and Warrants of Mindoro pursuant to the second subscription agreement noted above due to due diligence findings (TVI's due diligence is ongoing), or the non-satisfaction of one or more conditions to closing set out in such subscription agreement (including, without limitation, lack of Mindoro 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.



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