TVI Pacific Inc.
TSX : TVI

TVI Pacific Inc.

August 03, 2005 10:12 ET

TVI Pacific Inc.: Contract Amendment for Shuikoushan Exploration Project, Hunan Province, China Signed

CALGARY, ALBERTA--(CCNMatthews - Aug. 3, 2005) -



- Shuikoushan contract terms successfully re-negotiated
- Lease payments reduced by 50%
- Minimum future work commitment reduced by 50%
- Newly identified historical drill-hole data being evaluated
- Second-phase exploration program to test new targets planned


TVI Pacific Inc. (TSX:TVI) is pleased to announce that, on August 1, 2005, its wholly-owned subsidiary, Hunan Pacific Geological Exploration Inc ("HPGEI"), signed a contractual amendment with Team 217 of the Hunan Province Non-ferrous Geological Exploration Bureau ("Team 217), to modify certain elements of the Lease and Option to Purchase contract signed on December 12, 2002 and approved by the Chinese government on November 7, 2003. The amendment is subject to approval by the Ministry of Land and Resources.

The amendment is the result of negotiations and mediation between HPGEI and Team 217, which have taken place continuously over the last six months. The negotiations were precipitated by TVI's inability to replicate prior drilling results reported by Team 217, as described in TVI Pacific's press release of November 5, 2004.

Key points addressed by the amendment include a new lease payment schedule with a 50% reduction in lease payments, and a concomitant 50% reduction in minimum work expenditure commitments. The amendment also emphasizes Team 217's original obligation to release all historical technical data relating to the Shuikoushan exploration project. Due to on-going negotiations, since the start of the second contractual year commencing March 1, 2005, lease payments have been withheld by HPGEI. It has been agreed that, subject to all historical geological data being released to HPGEI, lease payments will now recommence on the following schedule and be made on a quarterly basis:



(All following payments assume Yuan/US$=8.108)

Year 2 - 600,000 Yuan RMB (US$74,000)
Year 3 - 880,000 Yuan RMB (US$109,000)
Year 4 - 1,000,000 Yuan RMB (US$123,000)
Year 5 - 1,200,000 Yuan RMB (US$148,000)

A 50% reduction in minimum work expenditure commitments was agreed as
follows:

Year 2 - 2,000,000 Yuan RMB (US$247,000)
Year 3 - 4,000,000 Yuan RMB (US$493,000)
Year 4 - 6,000,000 Yuan RMB (US$740,000)
Year 5 - 8,000,000 Yuan RMB (US$986,000)

Minimum work expenditure commitments have already been met for the
second contractual year.


TVI Pacific remains committed to the Shuikoushan exploration project. The Company's improved understanding of the mineral district's geology and mineralization, suggests that the gold being mined at the surface and intercepted in last year's drilling campaign, is related to the same process that introduced the gold, silver, lead and zinc mineralization being mined underground at the nearby large formal operation controlled by Shuikoushan Mining. In evaluating the historic data, TVI expects to focus on the results of deep drilling conducted several decades ago for lead and zinc within the area it controls. That drilling program was conducted before the district's gold potential was recognized, and the drill-core (which is no longer available) was never assayed for gold. The base metal intersections reported in the drill-logs will be one of the Company's main exploration targets, as they may also host gold and silver values. Follow up work on the Xianrenyan Bulk and Deep targets, outlined in TVI Pacific's drilling program last year, will also be pursued.

Clifford M. James, President of TVI Pacific Inc., commented: "Signing of the Shuikoushan amendment is significant for the Company. Further exploration work on this promising property can now begin again. While the negotiations took a fairly long time, the results have been well worth the delay. I thank the team involved for their hard work and persistence. I also thank our shareholders for their patience."

Glenn Sheldon, President of HPGEI 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.

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 various risks associated with the Shuikoushan exploration project are more fully described in the Shuikoushan 43-101 Report filed by the Corporation on SEDAR and which is available at www.SEDAR.com.

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

Contact Information