TVI's Philippine Affiliate In Negotiations To Provide CDN$2 Million Convertible Debenture Financing To Mindoro Resources

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Nov 27, 2014, 16:54 ET

TSX: TVI OTCQX: TVIPF

CALGARY, Nov. 27, 2014 /CNW/ - TVI Pacific Inc. (TSX:TVI) (OTCQX:TVIPF) ("TVI" or "the Company") and TVI's Philippine affiliate, TVI Resource Development (Phils.), Inc. ("TVIRD"), announce that TVIRD is currently in negotiations to provide a CDN$2.0 million convertible debenture financing, including a CDN$400,000 bridge loan to Mindoro Resources Ltd. ("Mindoro"). Mindoro is TVIRD's joint venture partner in Agata Mining Venture Inc. ("AMVI"), which currently operates the Agata nickel/iron laterite direct shipping ore ("DSO") project; and in Agata Processing Inc. ("API"), which is in the final stages of a definitive feasibility study on the Agata nickel processing project. The Agata projects are located in northern Mindanao, the Philippines.

Subject to final approval from the boards of TVIRD and Mindoro, key terms of the bridge loan under discussion are as follows:

Interest rate of 8% per annum;
Principal and accrued interest due on the earlier of January 31, 2015 or upon receipt of the proceeds from a proposed $2 million convertible debenture issue to TVIRD; and
The bridge loan will be secured by the shares of Mindoro's wholly owned subsidiary, MRL Nickel Philippines Inc.

Mindoro will use the funds from the bridge loan to help finance its operations in the near term. A further press release will be announced once final approvals from the boards of TVIRD and Mindoro are obtained for the bridge loan, which are expected next week.

Mindoro has also undertaken negotiations to issue a CDN$2 million convertible debenture to TVIRD on similar financial terms as the interim loan, except with a two-year term and a conversion feature of $0.05 in Year 1 and $0.10 in Year 2 in accordance with the rules of the TSX Venture Exchange. In the event that these negotiations are successfully completed and all regulatory and board approvals are obtained, the final terms of the financing and expected use of proceeds will be disclosed in a press release.

AMVI is a joint venture company whose shares are owned by TVIRD and Mindoro in which TVIRD holds a 60% interest and is operator. TVI has a 30.66% direct interest in TVIRD and thereby a 24.2% indirect ownership interest in AMVI through its ownership in TVIRD and its 14.4% direct interest in Mindoro, which holds a 15% interest and option to acquire a further 25% in AMVI. If the convertible debenture is to be converted at a conversion price of $0.05 in Year 1, TVIRD would gain a direct interest of 11.9% in Mindoro and a further 4.7% indirect interest in AMVI through its investment in Mindoro, while the combined direct and indirect interest held by TVI in Mindoro would increase to 16.3% from the current direct interest of 14.4% and TVI's indirect ownership interest in AMVI would increase to 24.9%.

"We are very pleased at the progress being made "We are very pleased at the progress being made on the Agata project in terms of the DSO operations, the exploration programs that are underway at the nickel laterite and limestone deposits, and work on the Agata Ni Processing Project", stated Cliff James, Chairman and Chief Executive Officer of TVI and Chairman of TVIRD, "TVIRD's negotiations with Mindoro to provide financial backing is testament to our continued confidence and support in our partner on the 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. TVI's affiliate, TVIRD, has to date produced copper and zinc concentrates as well as gold and silver doré from its Canatuan mine and has now commenced shipping high-iron/low nickel ore at the Agata DSO project, which is 60% held by TVIRD. TVIRD is also in the final stages of completing a definitive feasibility study ("DFS") on the innovative Agata nickel processing project, in which TVIRD has the right to earn a 60% interest upon completion of the DFS, and continues to advance its 100% owned Balabag Gold-Silver project. TVI is a direct or indirect participant/operator in several joint venture projects in the Philippines, Papua New Guinea and Fiji and also has an interest in an offshore Philippine oil property.

In addition to retaining a 30.66% indirect interest in TVIRD and other Philippine subsidiaries, TVI continues to directly hold (i) 20.04% equity interest in Foyson Resources Limited ("Foyson") (ii) a 14.4% equity interest in Mindoro; (iii) its 10% interest in the Amazon Bay Iron Sands project (for which the exploration license is held by Titan Mines Limited, a company in which Foyson holds 50% shareholding and has an option to acquire the remaining 50%); and (iv) its 100% investment in shares of TG World Energy Corp.

IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

Certain information set out in this News Release constitutes 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", "scheduled", "to be", "will be" and similar expressions. Forward-looking statements in this News Release are based upon the opinions and expectations of management of the Company as at the effective date of such statements. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, 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 by such forward-looking statements. These factors include, but are not limited to, such things as inherent risks associated with the exploration and development of mining properties, ultimate recoverability of mineral reserves, timing, results and costs of exploration and development activities, 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 equipment and personnel.

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 information respecting cash flows anticipated from future production of high-iron/low nickel DSO at the Agata Mining Project, is based upon high-iron/low nickel DSO prices in effect as at the date of this News Release, management's forecasts of trends in prices of high-iron/low nickel DSO, current mining rates of high-iron/low nickel DSO from the Agata Mining Project, estimates of the size of the high-iron/low nickel DSO reserves at Agata Mining Project, the current development plan for Agata Mining Project, TVIRD's current budget and overall strategy for Agata Mining Project, which plans, budget and strategy are all subject to change. Forward-looking information respecting the anticipated timing of future shipments of high-iron/low nickel DSO from the Agata Mining Project, is based upon current mining rates of high-iron/low nickel DSO from the Agata Mining Project, the terms of the third party offtake agreement for the purchase of high-iron/low nickel DSO produced at the Agata Mining Project, estimates of the size of the high-iron/low nickel DSO reserves at the Agata Mining Project, the current development plan for the Agata Mining Project, TVIRD's current budget and overall strategy for the Agata Mining Project, which plans, budget and strategy 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 the Company is exposed in the conduct of its business (including mining activities) are described in detail in the Company's Annual Information Form for the year ended December 31, 2013, which was filed on SEDAR on March 19, 2014 and is available under the Company's profile 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.

SOURCE: TVI Pacific Inc.