TVI Pacific Provides Second Quarter 2013 Financial and Operational Results
TSX: TVI OTCQX: TVIPF
CALGARY, Aug. 13, 2013 /CNW/ - TVI Pacific Inc. (TSX: TVI) (OTCQX: TVIPF) (TVI or the Company) today announced its unaudited, consolidated financial and operational results for the quarter ended June 30, 2013.
For a thorough explanation of the points discussed in this news release, shareholders are encouraged to read the unaudited interim consolidated financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), and the management's discussion and analysis for the periods ended June 30, 2013 and June 30, 2012 and the audited consolidated financial statements for the years ended December 31, 2012 and 2011. These documents were filed with certain securities regulators in Canada, and are available on our web site (www.tvipacific.com or under our profile on SEDAR www.sedar.com).
Half Year 2013 Highlights
- Total net revenues of $27.2 million
- Earnings before interest, depreciation, accretion and share of loss of associates of $1.2 million
- Net loss of $4.9 million
- Cash balance of $9.1 million at June 30, 2013
- Short term debt facilities of $9.2 million (average interest rate of 2.0%)
- A working capital surplus of $6.3 million
Financial Highlights
| Quarter ended June 30, 2013 |
Quarter ended June 30, 2012 |
Quarter ended March 31, 2013 |
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| ● | Gross revenue ($ million) | $20.1 | $26.5 | $11.4 | ||
| ● | Net revenue ($ million) | $17.0 | $22.6 | $10.2 | ||
| ● | Total cost per Copper Pound Equivalent (1) (US$) | $3.27 | $2.62 | $2.66 | ||
| ● | Production cash cost per Copper Pound Equivalent (2) (US$) | $1.89 | $1.29 | $1.79 | ||
| ● | Total cash cost per Copper Pound Equivalent net of by-products (3) (US$) | $1.48 | $0.65 | $1.48 | ||
| ● | Net income (loss) ($ million) | ($4.3) | $2.1 | ($0.6) | ||
| ● | Basic net income (loss) per share | ($0.007) | $0.003 | ($0.001) | ||
| ● | Average copper price received (US$/lb) | $3.25 | $3.57 | $3.62 | ||
| ● | Cash balance at quarter end ($ millions) | $9.1 | $17.5 | $7.6 | ||
| ● | Letters of credit and loan facilities ($ millions) (4) | $9.2 | $12.9 | $6.9 | ||
| ● | Working capital surplus ($ millions) | $6.3 | $13.3 | $11.3 |
| (1) Includes selling expenses and amortization expenses |
| (2) Excludes selling expenses and amortization expenses |
| (3) Includes selling expenses and excludes amortization expenses |
| (4) Average interest rate of: 2.00% for Q2 2013, 2.04% for Q2 2012 and 2.0% for Q1 2013 |
The mining segment generated net revenues of $16.8 million in Q2 2013 from the sale of concentrates, net of treatment, refining and penalties, and a further $0.2 million from drilling and other services to third party customers. Revenue generated from the sale of concentrates comprised two shipments of copper concentrate (35th and 36th) for a total of 10,418 dmt, as compared to two completed shipments of copper concentrate and one shipment of zinc concentrate during the same period in 2012 that generated $22.6 million net revenue.
During Q2 2013, TVI had a net loss of $4.3 million compared to a net income of $2.1 million for Q2 2012. A key cause of the loss was no comparative shipment of zinc concentrate, which had generated $4 million in gross revenue through the same period in 2012. TVI completed its sixth shipment of zinc concentrate on July 27th, 2013 of 5,169 dmt and expects to receive gross revenue of approximately US$3.8 million for this shipment (pending final assay and price adjustments).
A 9% decline in copper price, 12% decline in gold price and 18% decline in silver price, as compared to Q2 2012, has also contributed to the net loss in Q2 2013, offset partly by improved gold recoveries through Q2 2013 and larger gold volumes sold.
As expected over the life of the mine, the copper feed grade will continue to decline. This is the result of the declining natural grade distribution of the mineral deposit as TVI mines deeper into the pit and follows its mining plan. However, production cash cost has increased as a result of processing lower feed grades (0.73%) through the blending of ore to reduce penalty elements in the concentrate, though the increase has been offset in part by reduced mining cost and the continuing non-use of cyanide.
The net loss in the quarter has resulted also from the requirement to record TVI's proportionate share of net losses recognized by Foyson Resources Limited and Mindoro Resources Ltd. ("MRL"), in which TVI currently holds a 10.608% and 14.4% interest, respectively. The share of loss on investments recorded within the quarter is $1.2 million and relates primarily to the impairment of investments held by MRL.
Operational Highlights
| Quarter ended June 30, 2013 |
Quarter ended June 30, 2012 |
Quarter ended March 31, 2013 |
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| Average tonnes processed per day | 2,593 | 2,520 | 2,483 | |
| Ore copper grade (%) | 0.73 | 0.92 | 0.81 | |
| Copper concentrate copper grade (%) | 18.23 | 18.46 | 17.81 | |
| Copper concentrate gold grade (g/t) | 10.41 | 9.48 | 11.33 | |
| Copper concentrate silver grade (g/t) | 349.26 | 370.51 | 365.11 | |
| Zinc concentrate zinc grade (g/t) | 44.60 | 49.64 | 37.01 | |
| Copper pound equivalent produced | 4,938,238 | 6,997,256 | 5,338,328 | |
| Copper produced (lbs) | 2,761,964 | 3,750,947 | 2,872,511 | |
| Gold produced (oz) | 2,541 | 2,745 | 2,875 | |
| Silver produced (oz) | 92,579 | 127,685 | 92,626 | |
| Zinc produced (lbs) | 2,312,284 | 4,197,683 | 1,423,165 | |
During Q2 2013, mill throughput averaged 2,593 dry metric tonnes per day, totaling 235,922 tonnes. As projected, only a portion of original ore reserves was consumed due to the additional material found and mined during the period. This material, consisting of banded sulphides with low-grade chlorite schists, was used as a blending material to optimize mill recoveries and was located both inside and outside the pit shell and not included in the original ore reserves. An updated tonnage estimate based on lithologic logs and assay data in exploration holes is being examined with the assumption that the mineralized horizon could extend beyond the currently planned pit boundary. Detailed metallurgical and ore reserve studies will continue to be undertaken to determine future processing scenarios and their potential impacts on the ore reserves and mine life.
Based on average daily mill throughput going forward of 2,600 tonnes per day, open pit mining is estimated to be completed by the fourth quarter of this year while mill processing and concentrate shipments is expected to continue into the first quarter of 2014 (subject to change in throughput to meet shipping commitments).
Approximately 5,000 dry metric tonne copper concentrate shipments are expected to occur approximately every 6 to 8 weeks, while zinc concentrate shipments are expected approximately every 4 to 6 months. To date, 36 copper concentrate shipments of approximately 5,000 dry metric tonnes each and six zinc concentrate shipments have been completed, totaling 25,456 dry metric tonnes. TVI expects to complete a further two copper concentrate shipments and one zinc concentrate shipment through 2013, in addition to the zinc concentrate shipment completed July 27th, 2013.
Cash Position
As of June 30, 2013, TVI had a total of $9.2 million in short term debt facilities with an average interest rate of 2.0%. Cash on hand was $9.1 million at the same date.
For further information on TVI's operations please refer to the Management's Discussion and Analysis available on TVI's website www.tvipacific.com or under our profile on SEDAR www.sedar.com).
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 produces copper and zinc concentrates from its Canatuan mine and is advancing its Balabag Gold-Silver project. TVI is a 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.
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.
IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this news release constitute forward-looking information. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "intend", "could", "might", "should", "believe", "schedule" and similar expressions. Forward-looking statements are based upon the opinions and expectations of TVI as at the effective date of such statements and, in certain cases, information received from or disseminated by third parties. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from or disseminated by third parties is reliable, it can give no assurance that those expectations will prove to have been correct. Forward-looking statements are subject to certain risks and uncertainties (known and unknown) that could cause actual outcomes to differ materially from those anticipated or implied. These factors include, but are not limited to, such things as general economic conditions in Canada, the United States, the Philippines and elsewhere; volatility of prices for precious metals, base metals, oil and gas; commodity supply and demand; fluctuations in currency and interest rates; inherent risks associated with the exploration and development of mining properties; inherent risks associated with the exploration of oil and gas properties; ultimate recoverability of reserves; production, timing, results and costs of exploration and development activities; political or civil unrest; availability of financial resources or third-party financing; new laws (domestic or foreign); changes in administrative practices; changes in exploration plans or budgets; and availability of personnel and equipment (including mechanical problems). 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.
Forward-looking statements regarding forward production costs and shipping and refining costs are based on current and previous mineral reserve and resource estimates, current mining and processing activities, prior experiences of management with mining and processing activities, the current development and operating plan, efficiency and effectiveness of the sulphide plant, and the Company's overall plans, budget and strategy for Canatuan (which are all subject to change). Forward-looking statements regarding the remaining mine life of the Canatuan deposit are based on current and previous mineral reserve and resource estimates, current mining and processing activities, prior experiences of management with mining and processing activities, the current development and operating plan, efficiency and effectiveness of the sulphide plant, and the Company's overall plans, budget and strategy for Canatuan (which are all subject to change). Forward-looking statements respecting the copper and zinc concentrate shipping schedules are based on the Company's previous experience with concentrate shipments, current mining and processing activities, current and previous mineral reserve and resource estimates, discussions to date with the off-take partner, efficiency and effectiveness of the sulphide plant, and the Company's overall plans, budget and strategy for Canatuan (which are all subject to change).
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 and its 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. Subject to applicable securities laws, the Company does not undertake any obligation to publicly revise the forward-looking statements included in this news release to reflect subsequent events or circumstances, except as required by law.
SOURCE: TVI Pacific Inc.
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