TVI Pacific Inc.

TVI Pacific Inc.

February 24, 2005 08:19 ET

TVI Pacific Inc.: Canatuan Mine Update


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: TVI PACIFIC INC.

TSX SYMBOL: TVI

FEBRUARY 24, 2005 - 08:19 ET

TVI Pacific Inc.: Canatuan Mine Update

CALGARY, ALBERTA--(CCNMatthews - Feb. 24, 2005) - TVI Pacific Inc.
(TSX:TVI):

JANUARY, 2005 OPERATING RESULTS DEMONSTRATE ROBUST NATURE OF CANATUAN
MINE

- 1,876 oz of Gold ("Au") and 13,698 oz of Silver ("Ag") produced in
January, 2005

- Metal sale proceeds for January, 2005 - CDN$1,174,178 (US$958,278)

- CDN$275 (US$224) cash cost per oz of Au produced

- CDN$247 (US$201) cash cost per oz of Au equivalent produced

- Canatuan Mine net income - CDN$362,605 (US$295,932)

- Canatuan Mine net cash flow - CDN$566,930 (US$462,687)

- Mill expansion underway to increase daily mill throughput capacity by
approximately 76%, from 425 dry metric tonnes ("dmt") to at least 750
dmt, and to increase metal recoveries - expansion expected to be
completed by May 31, 2005

- Current expansion is expected to increase cash flow and reduce both
total cost and cash cost per oz of Au produced

- Studies underway to "fast track" copper, zinc, gold, silver-bearing
massive sulphide resource development with the goal of commencing
production in 2006

- Plans underway to accelerate exploration on TVI's 371 km2 district
scale land package surrounding the Canatuan Mine to increase the
project's resource base

TVI's Canatuan mine is the first foreign-financed mine in the
Philippines to be put into production in recent years. It is located
east of the town of Siocon, in the province of Zamboanga del Norte, on
the island of Mindanao, approximately 800 km south of Manila.

January, 2005 operating results for the Canatuan Mine demonstrate robust
nature of the mine.

Significant operating highlights include:

- The Canatuan Mine and Mill operated for 30 days during the month of
January. 12,761 dmt of gossan ore were processed, with daily production
averaging 425 dmt. By comparison daily production from February 1
through February 21 averaged 450 dmt.

- Au mill grade averaged 4.76 grams per tonne ("gpt") while Ag mill
grade averaged 96.74 gpt for January. By comparison, Au mill grade
averaged 4.14 grams per tonne ("gpt") while Ag mill grade averaged 83.04
gpt from February 1 through February 21.

- Au recovery to carbon averaged 79.57% while Ag recovery to carbon
averaged 35.19% for January. By comparison, Au recovery to carbon
averaged 79.70% while Ag recovery to carbon averaged 42.61% from
February 1 through February 21. Management recognizes that these
recoveries are relatively poor. However, management believes that better
recoveries are possible after certain upgrades to the Canatuan plant are
completed, as discussed below.

- 1,876 oz of Au and 13,698 oz of Ag were produced during January. 2,090
Au equivalent oz were produced using monthly Au and Ag prices of
US$422.97 and US$6.60, respectively.

- Proceeds from metal sales from the Canatuan Mine for January were
CDN$1,174,178 (US$958,278).

- Total costs and cash costs for January were CDN$719,702 (US$587,368)
and CDN$515,378 (US$420,614), respectively. Total costs include
amortization of deferred mining costs and depreciation costs.

- Total cost and cash cost per oz of Au produced for January were
CDN$384 (US$313) and CDN$275 (US$224), respectively. Total cost and cash
cost per oz of Au equivalent for January were CDN$344 (US$281) and
CDN$247 (US$201), respectively.

- January before tax net income from the mine was CDN$362,605
(US$295,932) while net cash flow was CDN$566,930 (US$462,687).

Future plans for the Canatuan Mine include:

- The addition of three new leach tanks and two new CIP tanks, all of
which are currently under construction. With these additions, daily
throughput is expected to increase marginally to 500 dmt and metal
recoveries are expected to be increased to at least 90% for Au and 65%
for Ag. The additional tanks are expected be operational by March 1,
2005.

- The addition of a second ball mill and completion of a Merrill-Crowe
system. With these additions daily throughput is expected to increase to
the final planned production throughput rate of 750 - 800 dmt and
recoveries are expected to increase to at least 92% for Au and at least
80% for Ag. These additions are expected to be operational by May 31,
2005.

Capital costs to complete the current expansion are budgeted at
approximately CDN$560,000 (US$458,000) and are expected to be paid from
working capital.

The current expansions are expected to provide TVI with increased metals
production and cash flow. Total monthly operating costs are not
projected to increase substantially over current monthly costs as
production increases to the final planned production throughput rate.
Both total cost and cash cost per oz of Au produced are expected to
drop, thereby making the Canatuan Mine a low cost producer.

- Development of the 1,412,521 tonne measured and indicated copper,
zinc, gold, silver-bearing sulphide resource, which has a copper
equivalent grade of 4.42% copper, using a 2.5% copper equivalent cutoff.
(Please see TVI's updated NI 43-101 compliant Independent Technical
Report On The Canatuan Copper-Gold Project, Philippines, dated November
23, 2004 which is filed on Sedar at www.sedar.com.) The sulphide
resource underlies the gossan reserve which is currently being mined.
Studies are currently underway to "fast track" this development with the
goal of commencing production in 2006.

- Accelerating exploration on TVI's tenements surrounding the Canatuan
Mine. An analysis of exploration work previously performed by TVI on its
371 km2 district scale land package has indicated that there is
excellent potential to increase the project's resource base, both within
the Mineral Production Sharing Agreement area and on the other Canatuan
claim blocks comprising TVI's land package through the discovery of
additional sulphide / oxide deposits, similar to the Canatuan deposit,
thereby extending the project's life significantly by processing any new
discoveries in the plants that will already have been operating on the
site. Plans are being made to conduct an exploration program in 2005
that will include a regional airborne electro-magnetic study over the
whole property, as well as mapping, sampling and exploration drilling,
as required and justified.

TVI's business strategy is to increase cash flow from its Canatuan
Mining Division and Drilling Division, and to use the cash flow
generated from these sources and TVI's Rapu Rapu NSR royalty to make
property acquisitions, carry out exploration programs on its properties
and fund further expansion at Canatuan, including the development of the
massive sulphides in the current orebody. In management's view, the
Company's current cash position, including the proceeds from a loan that
has been secured, together with anticipated cash flow from operations,
should be sufficient to fund obligations as they become due, including
planned acquisition, exploration and development expenditures.

"The Canatuan Mine has exceeded all of our expectations," said TVI
President and CEO, Mr. Clifford M. James. "The current cash flow, to be
augmented as a result of the planned upgrades to the Canatuan Plant
facilities, is expected to allow TVI to accelerate its property
acquisition and exploration activities in both China and the
Philippines. In addition we also plan to significantly increase our
community and social development programs at Canatuan, putting back a
portion of our earnings into the community. "

For additional information on the Canatuan Mine, please refer to the
updated NI 43-101 compliant Independent Technical Report On The Canatuan
Copper-Gold Project, Philippines, dated November 23, 2004, and the
updated Independent Gossan Mining Feasibility Study - Canatuan Project,
dated November 5, 2004, both of which are filed on Sedar at
www.sedar.com . Additional information, including maps and photos of the
Canatuan Mine, can also be found on TVI's Website, at www.tvipacific.com.

The information contained in this news release reflects only the
operations of the Canatuan Mine only, and as such does not reflect the
total operations of TVI Pacific Inc. for the month of January, 2005.

TVI has retained the services of Norwest Corporation of Calgary to
complete the independent, updated NI 43-101 compliant, Gossan Mining
Feasibility Study - Canatuan Project, dated November 5, 2004 . Ian
Perry, P.Geo., Bruce Davis, FAusIMM, Bob Proudfoot, P.Eng., John Fox
P.Eng., Greg MacMaster, P.Eng., and Ken Shinya, P.Eng., of Norwest
Corporation are serving as "Qualified Persons" under the NI 43-101
guidelines.

TVI has retained the services of Norwest Corporation of Calgary to
complete the independent, updated NI 43-101 compliant, Independent
Technical Report On The Canatuan Copper-Gold Project, Philippines, dated
November 23, 2004. Ian Perry, P.Geo., Bob Proudfoot, P.Eng., and Bruce
Davis, FAusIMM of Norwest Corporation are serving as "Qualified Persons"
under the NI 43-101 guidelines.

Statements in this release that are forward-looking statements are
subject to various risks and uncertainties concerning the specific
factors disclosed under the heading "Risk Factors" and elsewhere in the
Corporation's periodic filings with Canadian securities regulators. Such
information contained herein represents management's best judgment as of
the date hereof based on information currently available. The Company
does not assume the obligation to update any forward-looking statement.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    TVI Pacific Inc.
    Clifford M. James
    President and CEO
    (403) 265-4356
    (403) 264-7028 (FAX)
    Email: tvi-info@tvipacific.com
    Website: www.tvipacific.com
    The Toronto Stock Exchange has neither approved nor disapproved of the
    information contained herein.