TVI expands holdings in Philippines (May 02, 2005)

Vancouver — Government initiatives to improve the investment climate for mining have prompted TVI Pacific (TVI-T) to apply for exploration properties in a new mineral district near the Canatuan polymetallic mine in the southern Philippines.

The land package covers 1,257 square km on the Zamboanga Pennisula of Mindanao, 75 km northeast of Canatuan. A major mining company defined numerous targets on the properties in the mid-1990s, however no follow-up exploration has taken place since then.

TVI believes the properties have potential synergies with its Canatuan mine, which began operations in 2004. It is the first foreign-financed mine to be developed in the nation in recent years.

Production in January of this year was lower than expected (1,876 oz. gold and 13,698 oz. silver), owing to poor recoveries. The company has installed new leach tanks and carbon-in-pulp tanks, and plans to install a second ball mill and a Merrill-Crowe system to boost recoveries to 92% for gold and at least 80% for silver.

These improvements should also lower Canatuan’s cash costs and total costs, which were US$224 per oz. and US$313 per oz., respectively, in January.

TVI says it could take up to six months to begin exploring the properties applied for in Mindanao. A consultation process with the public and local indigenous peoples must be completed before the company can obtain the necessary “Consent to Explore.” TVI adds that it has established positive relations with communities in the region, many of which previously supported its efforts to develop Canatuan.TVI also notes that challenges to the 1995 Mining Act, which stalled previous work at the exploration properties, have been resolved. The Supreme Court recently ruled that the Mining Act of 1995 is constitutional.

Another positive development was a recent government commitment to streamline procedures for mining applications to ensure that resource development is based on clear policies administered in a transparent manner.

The exploration properties cover at least 20 epithermal gold and porphyry copper-gold prospects, as well as numerous small-scale gold mines. None of the targets have been drill-tested.

TVI is exploring other projects in the Philippines, and also holds a 2.5% net smelter return royalty at the Rapu Rapu polymetallic mine being commissioned by Australian-listed Lafayette Mining.

Situated in the province of Albay, Rapu Rapu is expected to produce about 10,000 tonnes of copper in concentrates, 14,000 tonnes of zinc in concentrates, 50,000 oz. gold and 600,000 oz. silver annually, over the initial, six-year mine life.

Pre-stripping of the open pit is now complete, and ore is being stockpiled while the plant is commissioned. First gold production is expected in the second quarter of this year, with base-metal production scheduled for this fall.