CALGARY, Dec. 19, 2012 /CNW/ - TVI Pacific Inc. (TSX:TVI) (OTCQX:TVIPF) (TVI or the Company) announced today that TVI's Philippine operating affiliate, TVI Resource Development (Phils.), Inc. (TVIRD) has signed a memorandum of agreement ("MOA") with Korea Malaysia Philippines (KMP) Resources, Inc., [formerly "Lafayette (Philippines), Inc."], Rapu-Rapu Minerals, Inc. and Rapu-Rapu Processing, Inc. (hereinafter referred to as the "Rapu-Rapu Group"). The MOA outlines terms for the settlement of outstanding Net Smelter Return ("NSR") payments to TVIRD.
On 16 December 1999, the parties entered into a Deed of Assignment of Mining Rights and Joint Venture Participating Interest in which TVIRD assigned to the Rapu-Rapu Group all of TVIRD's right, title and interest in the Participating Interest in the Joint Venture and TVIRD Group Assets in consideration of an Assignment Price, which included the NSR of 2.5%. Rapu-Rapu Group satisfied the Assignment Price except for the NSR. Details of the Rapu-Rapu Group legal actions are described in TVI's Third Quarter 2012 Management's Discussion and Analysis filed on November 9, 2012 available on SEDAR (www.sedar.com) or on TVI's website at www.tvipacific.com.
The MOA confirms agreement between TVIRD and the Rapu-Rapu Group in the gross sum amount of US$3,844,720 for the period 2005 through Q3 2012. TVIRD is to receive US$3,075,776, which is net of 20% U.S. withholding taxes of US$768,944, and is to receive payment according to the following schedule:
US$500,000 on 21 December 2012
US$858,592 on 31 January 2013
US$858,592 on 28 February 2013
US$858,592 on 31 March 2013
TVI is pleased that a settlement has been negotiated with the Rapu-Rapu Group. Upon receipt of the full payment of US$3,075,776 by TVIRD and when proof of the remittance of withholding taxes to the U.S. Government is provided, TVIRD and the Rapu-Rapu Group will release all claims involving the 2.5% NSR for the period of 2005 to Q3 2012.
The Rapu-Rapu Group has further agreed that payment of the 2.5% NSR for the 4th Quarter 2012 shall be on or before 30 April 2013. Additionally, the Rapu-Rapu Group and TVIRD will agree to a payment schedule for any remaining NSR that will be due to TVIRD through to the end of the Rapu-Rapu mine life.
About TVI Pacific Inc. (TSX: TVI) (OTCQX: TVIPF)
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 also has an interest in an offshore Philippine oil property and is a partner in several joint venture projects in the Philippines and Papua New Guinea.
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.
SOURCE TVI Pacific Inc.