TVI Pacific Inc.
TSX : TVI

TVI Pacific Inc.

August 21, 2006 11:39 ET

TVI Pacific Inc. Announces Increase in Reported Gossan Mineral Resource at Canatuan Mine, Philippines

FILES NI 43-101 TECHNICAL REPORT ON SEDAR

CALGARY, ALBERTA--(CCNMatthews - Aug. 21, 2006) - TVI Pacific Inc. (TSX:TVI):

- New technical work results in substantial increase in the reported Gossan mineral resource at Canatuan, now estimated at 2.55 million tonnes (Mt), averaging 2.43 grams per tonne (gpt) Au and 64 gpt Ag

- An optimized pit to extract the proven and probable mineable reserves is estimated to contain 1.29 Mt of ore, averaging 2.27 gpt Au and 62.27 gpt Ag. The overall stripping ratio is estimated at 2.19

- Mine production rate at Canatuan reached levels of 2,000 tonnes per day in August 2006. Mill recoveries averaging 90% for gold and 75% for silver have been achieved recently, resulting in daily production of approximately 190 ozs of Au Equivalent

- Additional exploration work under way to further delineate the Gossan and Sulphide mineral resources at Canatuan, along with infill drilling and metallurgical testwork to further optimize the Sulphide mineable reserves

TVI Pacific Inc. ("TVI" or the "Company") announced today that it has received an independent National Instrument 43-101 ("NI 43-101") technical report on the Gossan mineral resource at the Canatuan Mine in the Philippines.

The new Gossan mineral resource estimate is set out in a report, entitled "43-101 Technical Report for the Gossan Resources at the Canatuan Project of TVI Pacific Inc.", which has been filed with certain securities regulatory authorities in Canada and is available on the SEDAR website at www.sedar.com. The technical report was prepared by Mr. Pierre-Jean Lafleur, P.Eng., of Geostat Systems International Inc. ("Geostat"), a specialized consulting company providing services to exploration and mining companies. Mr. Lafleur is acting as the Qualified Person (as defined in National Instrument 43-101) and has read and approved of this News Release. The Canatuan deposit is wholly owned by TVI's affiliate, TVI Resource Development (Phils) Inc. ("TVIRD").

Certain information set out in this News Release, including exploration and development plans at Canatuan, constitute forward-looking information. Readers should review the cautionary statement respecting forward-looking information that appears at the end of this News Release. Unless otherwise noted, all dollar amounts set out in this news release are stated in US dollars.

As described in prior News Releases, TVI initiated a review (through Geostat) of the gossan mineral resource at Canatuan in April, 2006, with a view to determining an appropriate cut-off grade. In light of the significant increases in the prices for gold and silver and increased throughput capacity at the Canatuan mine, management expected that a decrease in the previously established cut-off grade could be achieved, which would, in turn, increase mineral reserves, mine life of the gossan phase and total ounces of gold and silver that may ultimately be produced. Near mine exploration and delineation of "Rubbly Gossan" was also expected to lengthen mine life. The resulting substantial increase in the gossan mineral resource estimate, which includes rubbly gossan, has corroborated management's expectations.

A summary of the updated Gossan mineral resources as of the end of April 2006 is presented in the following table:



------------------------------------------------------------------------
Material Type Classification Tonnes NSR $ Gold g/t Silver g/t
------------------------------------------------------------------------

------------------------------------------------------------------------
Gossan Measured 491,268 79.54 3.03 130
------------------------------------------------------------------------
Indicated 671,720 69.87 2.76 108
------------------------------------------------------------------------
Subtotal 1,162,988 73.95 2.87 117
------------------------------------------------------------------------

------------------------------------------------------------------------
Rubbly Gossan Measured 724,061 34.31 2.05 11
------------------------------------------------------------------------
Indicated 662,181 38.43 2.08 26
------------------------------------------------------------------------
Subtotal 1,386,242 36.28 2.06 18
------------------------------------------------------------------------

------------------------------------------------------------------------
TOTAL 2,549,230 53.47 2.43 64
------------------------------------------------------------------------

------------------------------------------------------------------------
(x)the report assumes metal prices of $623/oz gold and $13.90/oz silver.
Metal recoveries are assumed to be 90% Au and 75% Ag. Mineral resources
which are not mineral reserves do not have demonstrated economic
viability.


Using a $20 NSR per tonne cut-off, the total gossan and rubbly gossan mineral resources, in the measured and indicated categories, are estimated at 2.55 Mt, averaging 2.43 gpt Au and 64 gpt Ag, and valued at $53.47 NSR per tonne.

In addition to the above Measured and Indicated gossan and rubbly mineral resources, the 43-101 Technical Report identifies an estimated 915,650 tonnes of Inferred category laterite, saprolite and mineralized schist material at Canatuan, averaging 1.25 gpt Au, 99.6 gpt Ag.

The Technical Report includes Inferred resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. These Inferred resources will require further exploration to upgrade them to the Measured and Indicated categories.



A summary of the updated Gossan mineral reserves as of the end of April
2006 is presented in the following table:

------------------------------------------------------------------------
Material Type Classification Tonnes NSR $ Gold g/t Silver g/t
------------------------------------------------------------------------

------------------------------------------------------------------------
Gossan Proven 316,000 65.68 2.54 105.26
------------------------------------------------------------------------
Probable 413,000 56.86 2.29 85.32
------------------------------------------------------------------------
Subtotal 729,000 60.68 2.40 93.96
------------------------------------------------------------------------

------------------------------------------------------------------------
Rubbly Gossan Proven 342,000 36.64 2.18 13.00
------------------------------------------------------------------------
Probable 216,000 38.69 1.97 33.21
------------------------------------------------------------------------
Subtotal 558,000 37.43 2.10 20.82
------------------------------------------------------------------------

------------------------------------------------------------------------
TOTAL 1,287,000 50.61 2.27 62.27
------------------------------------------------------------------------

------------------------------------------------------------------------
(x)the report assumes metal prices of $623/oz gold and $13.90/oz silver.
Metal recoveries are assumed to be 90% Au and 75% Ag.


Using a $20 NSR per tonne cut-off, 5% mining dilution and 95% mining recovery (86% for the rubbly gossan) in ore, the total oxide (gossan and rubbly gossan) mineral reserves, in the proven and probable categories, are estimated at 1.29 Mt, averaging 2.27 gpt Au and 62.27 gpt Ag, and valued at $50.61 NSR per tonne. The optimized pit to extract this ore also is estimated to contain 2.82 Mt of waste for an average stripping ratio of 2.19.

The information set out above represents a summary only of information contained in the 43-101 Technical Report. Readers should refer to the 43-101 Technical Report for more detail concerning the information summarized in this news release, including various assumptions utilized to calculate the information set out in the foregoing tables. The information set out above and detailed in the 43-101 Technical Report represents an estimate only and actual results may differ materially.

Mining and processing operations of gossan ore started at Canatuan in May 2004. Through 2005 and 2006, various upgrades were made to the mine and mill facilities, which have resulted in increased metal production. Recently, in August 2006, a daily production rate of just over 2,000 tonnes per day was achieved for a period of several days, at 90% Au recovery and 75% Ag recovery. At average mine grades this equates to daily production of approximately 190 ozs of Au Equivalent. Assuming a sustainable mining throughput rate of 1,800 tonnes per day, the gossan mineral reserves at Canatuan could be mined over the next two years.

On-going Drill and Expansion Program at Canatuan

As noted in the Company's August 9, 2006 News Release, an exploration program is ongoing to further define the mineralization surrounding the current Canatuan open pit with the aim of ultimately increasing Canatuan's reserves/resources and extending the long-term life of mine plan. Several previously identified near mine targets, which are considered promising by management, are scheduled for further testing to determine whether commercial quantities of minerals are present.

TVI's current exploration and optimization programs involve the following:

- Infill drilling program consisting of reverse circulation ("RC") drill holes ("DHs") as well as diamond drill holes ("DDHs") -- to further optimize mineral resources and for further metallurgical test work (sulphides)

- Additional RC DHs -- to test the extension of gossan (and sulphides) along the west fringe of the deposits

- Additional testpits -- to test the extension of gossan to the northeast between zones of rubbly gossan

- On-going selective mining, stockpiling and batch processing of rubbly gossan material -- to assess mineability and potential to blend with current massive gossan mill feed

- Two soil geochem surveys underway -- to test old drainage anomalies immediately north and southwest along strike of the known gossan deposit outline.

Once the results of these programs are known, it is TVI's intention to update both the gossan and sulphide mineral resource (for potential production of copper and zinc concentrates) at Canatuan by way of further updating the current NI 43-101 Technical Report for the Gossan Resources and by way of a new NI 43-101 Technical Report on the sulphides. It is anticipated that these new NI 43-101 Technical Reports will be issued later in 2006.

Canatuan Exploration Upside

As previously noted by the Company (including in the Company's 2005 Annual report), the Canatuan deposit is classified as a Volcanogenic Massive Sulphide (VMS) - a deposit type that is mined to a high degree of operational and financial success in many parts of the world. VMS deposits are typically sources of copper and zinc, and frequently contain gold and silver, which is consistent with the make up of the Canatuan deposit. One of the common characteristics of VMS deposits is that in any greenstone belt, in which they are located, the individual deposits occur in clusters and together they often form a "mining camp". The deposits are found within a favorable "host rock horizon" which is readily identified. Exploration activities at Canatuan are ongoing in an effort to determine whether additional deposits are present in the area.

About TVI Pacific Inc. (TSX: TVI)

TVI Pacific Inc. is a publicly-listed Canadian mining company focused on exploring for and producing precious and base metals within district scale systems in Asia.

In the Philippines, TVI's most advanced project, the Canatuan Mine, began mining and milling operations in mid-2004, producing gold and silver dore. Mill throughput is currently over 1,800 dmtpd (approximately 190 AuEqOz per day avg.) from a gossan/oxide zone. Further expansion of the mill's processing capacity is underway. TVI has received a completed feasibility study on the Canatuan Sulphide project prepared by Norwest Corporation. A NI 43-101 report based on the Norwest study, now filed on SEDAR, addresses the copper-zinc bearing massive sulphide zone, or lower portion of the Canatuan Deposit. Management anticipates that a separate plant will be constructed to process the sulphide ore if a determination is made to bring the Sulphide Project into production. In addition, TVI holds a 2.5% net smelter return (NSR) royalty on the Philippine-based Rapu Rapu project (the second foreign-invested, new, mining project in the Philippines operated by Lafayette Mining Ltd.). Exploration in the Philippines is being conducted at Canatuan (both to expand TVI's resource base and to find new deposits), and at Balabag, Tamarok and Tapisa, which management of TVI views as compelling exploration properties.

In China, TVI's wholly-owned Chinese subsidiary, Hunan Pacific Geological Exploration Inc. (HPGEI) is the first and only foreign mining company to be granted both WOFE status and a Qualified Explorer License. The exploration program in China is focused primarily within the Golden Triangle area, a highly prospective metallogenic region in China's south-western provinces of Yunnan, Guizhou and Guangxi Autonomous Region and prospective areas in the Tibet Autonomous Region. HPGEI has 2,394 sq kms of land under application in China in the Golden Triangle and in the Tibet A.R.

TVI also has a Drilling Division consisting of Exploration Drilling Corporation (EDCO), a wholly-owned subsidiary of TVI Pacific Inc. based in the Philippines, and Hunan Pacific Drilling (HPD), a division of HPGEI based in China, which generates revenue from contract drilling.

Mr. Pierre-Jean Lafleur, P.Eng., of Geostat Systems International Inc., is the qualified person, as defined in NI 43-101, and responsible for the preparation of the technical information in this News Release. Mr. Lafleur has reviewed and verified the available data used in preparation of the Technical Report including sampling, analytical and test data.

The statements set out in this News Release 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. Forward-looking statements are based upon the opinions, expectations and estimates of management as at the date the statements are made and, in some cases, information provided or disseminated by third parties, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These factors include such things as the volatility of prices for precious metals and base metals, commodity supply and demand, fluctuations in currency and interest rates, inherent risks associated with the exploration and development of mining properties, ultimate recoverability of reserves, timing, results and costs of exploration and development activities, availability of financial resources or third-party financing, new laws (domestic or foreign) and changes in exploration plans or budgets. Forward-looking information respecting expansion plans at the Canatuan mine, and further exploration activities in the Philippines is based upon the current budget, development plans and overall strategy of TVI, all of which are subject to change. Forward-looking information relating to the anticipated construction of a sulphide processing plant and related infrastructure at Canatuan is based upon the current budget, development plans and overall strategy of TVI, all of which are subject to change. 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. The forward-looking statements of TVI Pacific Inc. contained in this News Release are expressly qualified, in their entirety, by this cautionary statement. Various risks associated with the Company's operations are described in detail in TVI's Annual Information Form, filed by TVI on SEDAR on March 30, 2006, which is available at www.SEDAR.com.

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

Contact Information

  • TVI Pacific Inc.
    Clifford M. James
    President and CEO
    (403) 265-4356
    or
    TVI Pacific Inc.
    Paul Moon
    Director, Corporate Communications
    (403) 265-4356
    (403) 264-7028 (FAX)
    Email: tvi-info@tvipacific.com
    Website: www.tvipacific.com