TVI Pacific Inc.
TSX : TVI

TVI Pacific Inc.

August 12, 2005 09:59 ET

TVI Affiliate Completes Legal Due Diligence and Begins Exploration Program on Balabag Gold-Silver Property

CALGARY, ALBERTA--(CCNMatthews - Aug. 12, 2005) - TVI Pacific Inc. (TSX:TVI)

- Option agreement signed, which allows TVI Pacific's Philippine incorporated affiliate, TVI Resource Development (Phils) Inc. ("TVIRD"), exclusive right to assess Balabag exploration property and to acquire 100% of the mineral rights.

- Legal due diligence completed, US$15,000 option payment made.

- Technical due diligence initiated, to confirm prior exploration results reported by a major mining company unrelated to TVI Pacific, and 43-101 report being prepared.

- Major's prior exploration results included:

1. One hundred and forty five channel samples from the Tinago prospect small scale miner workings, which returned a weighted average of 20.3 g/t Au, and 464 g/t Ag.

2. Forty four channel samples from the North Miswi prospect, which averaged 6.8 g/t Au and 113.0 g/t Ag.

3. Three hundred 1.5 m channel samples collected systematically by the major across the Balabag returned a weighted average of 10.97 g/t Au and 258 g/t Ag.

4. Presence of copper skarn and lead-zinc mineralization, with associated hydrothermal alteration, together with drainage geochemistry results, all of which suggest a porphyry copper-gold target may also be present.

- First drilling campaign is expected to commence in the fourth quarter.

- Balabag is contiguous with the 1,257.12 km(2) of tenements applied for by TVIRD in the first quarter 2005, on which twenty potential gold and copper-gold targets were identified by a major mining company as a result of prior exploration activities.

TVI Pacific is pleased to advise that it's affiliate, TVI Resource Development (Phils.) Inc., has signed an option agreement to acquire the mineral rights to the Balabag property, which is located on the Zamboanga Peninsula in the southern Philippines approximately 70 kms to the northeast of the Canatuan Mine. TVIRD has also successfully concluded its legal due diligence related to the option agreement and made a US$15,000 payment to Zamboanga Minerals Corporation ("ZMC") as required under the option agreement. The agreement between TVI and ZMC provides TVIRD with an exclusive period of two years and nine months to assess the mineral potential of the property. Should TVIRD so elect, the property may be purchased for US$350,000, with ZMC then retaining a 2.5% net smelter royalty on the property. The property is subject to a Mineral Production Sharing Agreement ("MPSA"), with tenure over an area of 47.79 km(2). The Balabag property is contiguous with tenements recently applied for by TVIRD on the Zamboanga Peninsula, covering an area of 1,257.12 km(2).

ZMC has released to TVIRD a report prepared in November, 1997 by a major mining company that assessed various prospects on the Balabag property during the period from October 1996 to November 1997. This is the same company that identified gold and copper-gold prospects on the tenements applied for by TVIRD earlier this year. The following historical information is derived principally from that November, 1997 report, but also from a news release issued on April 9, 2003 regarding the results of a limited drilling program on the property and from documentation prepared by another unrelated company that reviewed and sampled the property. TVIRD's geological staff is currently conducting additional technical due diligence, including mapping and sampling of the property, to verify the results associated with prior exploration activities. This will be reported in a 43-101-compliant document. While TVI believes that those prior exploration results provide an indication of the potential of the Balabag property and are relevant to ongoing exploration, TVI has not confirmed those results with independent tests of its own and, therefore, those historical exploration results should not be relied upon. Among other things, duplication of values reported by earlier workers is not expected due to the partial collapse of the workings originally sampled eight years ago. It is also expected that much of the material originally sampled has been mined out by the small-scale workers. Since the closure of the original tunnels, which were being mined by the small scale miners, until they ceased operations when they reached the water table, the illegal small-scale miners have migrated to an area approximately 200m away, where aggregate daily production is estimated to average 200 tonnes. These new activities have provided new underground openings for the TVIRD to sample.

Balabag is the property on which the major focused most of its exploration work. It was first identified mid-1996 when eighteen grab samples were collected from illegal small-scale workings. The small scale mining activities commenced in 1995. Values ranged from 0.84 to 121.35 g/t Au, and averaged 29.7 g/t Au and 915 g/t Ag. The major then expended approximately US$ 286,000 during the period from October 1996 to November 1997 on exploration on the property, conducting geological, geochemical, and geophysical surveys across parts of the lands covered by the MPSA. This exploration work identified several targets, including the Balabag, Tinago and North Miswi prospects, with Balabag being the most highly ranked.

Drainage samples taken by the major identified strong anomalies for gold, silver, arsenic, lead, antimony, lead, copper and molybdenum. At Balabag, follow-up soil geochemistry also outlined broad multi-element anomalies, which include two major gold anomalous zones. Tinago lies within one of the soil anomalies, with the 100ppb Au contour defining an area approximately 500m long by 200m across.

At Tinago the major systematically collected 145 1.5m long channel samples underground from the small-scale mining workings, and these returned a weighted average of 20.3 g/t Au, and 464 g/t Ag. The zone of bonanza grades at Tinago is approximately 20m wide, 130m long, and is open to the south. Within the Balabag area, the North Miswi prospect also averaged 6.8 g/t Au and 113.0 g/t Ag from forty-four channel samples. The weighted average from 300 1.5 m channel samples collected systematically by the major across the Balabag area was 10.97 g/t Au and 258 g/t Ag. Gold mineralization is characterized by quartz veining and silica replacement, with stockwork quartz veins and veinlets at depth in underground workings.

At least one copper porphyry target was also identified within the Balabag MPSA. The major reported copper and molybdenum drainage anomalies on the western side of the property and potassic hydrothermal alteration was also identified within the same area. Further evidence included copper skarn mineralization cropping out in two rivers, and base metal mineralization was reported in the headwaters of one of those rivers. Rock chip and grab samples from one zone of skarn mineralization returned copper values ranging from 1.72% to 9.49%, silver values ranging from 14.8 to 242 g/t, zinc from 1.14 to 8.84% and lead from .11 to 1.59%. Molybdenum is reported to have peaked at 470ppm.

The major planned a minimum drill program of three holes, each to 300m, but this did not occur as it left the country before initiating its intended drilling program.

Minor drilling on the property was however, undertaken by another company and this was reported in April 2003 as follows:

Five shallow relatively narrow diameter (NTW and BTW) holes totaling 593.6m comprised a scattered test of three of the four prospects within the Balabag project area. The first two holes were sited in the Unao Unao area but failed to intersect the quartz veins that host the gold. Hole 3 was sited at Miswi and from 79m returned 14m @ 5.2 g/t Au, 85 g/t Ag (including 3m @ 16.6 g/t Au, 311 g/t Ag). Holes 4 and 5 were drilled at Tinago. Hole 4 intersected a small-scale miners' stope but hole 5 from 2m intersected 9m @ 5.4 g/t Au, 122 g/t Ag (including 2m @ 19.7 g/t Au, 450 g/t Ag).

Due to the unsystematic nature of this minor drill campaign, TVI is of the opinion the prospects remain virtually un-tested at depth. The true widths of the intersections were not reported.

Neither TVIRD nor TVI Pacific has independently verified the foregoing April 2003 information. Such information should not be relied upon and the reproduction of such information in this news release should not be taken as confirmation by TVI Pacific or TVIRD of the accuracy of such information.

TVI expects to begin a drill program on the Balabag property in the fourth quarter. The results of the sampling program which is currently underway will determine the nature of the initial phase of the drilling program, which is expected to be oriented to first test vein orientations and grades at depth. This first phase drill program is also expected to also provide further information regarding the copper potential of the property, which is expected to be further tested in a subsequent drill program. Management of TVI Pacific anticipates that the subsequent drilling will simultaneously assess gold values at greater depths.

Alan R. Flint (BSc (Hons) ARSM), Vice-President Exploration of TVI Pacific and AusIMM member, is serving as TVI's "Qualified Person" for purposes of National Instrument 43-101 - Standards of Disclosure for Mineral Deposits ("NI-43-101") on this project and has reviewed this News Release and verified the data set out herein. Mr. Flint is a geologist and has more than 25 years relevant experience in the metalliferous mining and exploration industry.

The statements herein that are not historical facts are forward-looking statements. Forward-looking statements (often, but not always, identified by the use of words such as "expect", "may", "anticipate" or "will" and similar expressions) may include plans, expectations, opinions, or guidance that are not statements of fact. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. These statements are subject to certain risks and uncertainties that could cause actual results or outcomes to differ materially from those anticipated or implied by forward looking statements. TVI Pacific Inc. does not assume responsibility for the accuracy and completeness of the forward looking statements and, subject to applicable law, does not undertake any obligation to publicly revise such forward looking statements to reflect subsequent events or circumstances. The forward looking statements of TVI Pacific Inc. contained in this News Release are expressly qualified, in their entirety, by this cautionary statement.

The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.

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