TVI Pacific Inc.
TSX : TVI

TVI Pacific Inc.

March 13, 2008 08:45 ET

TVI Pacific Signs Definitive US$15 Million Bridge Financing Agreement

CALGARY, ALBERTA--(Marketwire - March 13, 2008) - TVI Pacific Inc. (TSX:TVI) ("TVI" or the "Company") announced today that the Company and its Philippine affiliate, TVI Resource Development (Phils.) Ltd. ("TVIRD"), have signed a definitive loan agreement with LIM Asia Arbitrage Fund Inc. and LIM Asia Special Situations Master Fund Limited (the "Lenders"), providing for a US$15 million bridge financing facility ("the Facility"). The ability of TVIRD to draw amounts under the Facility is subject to perfection of the security interest comtemplated by the Omnibus Loan and Security Agreement between TVIRD and the Lenders (the "Loan Agreement"), which is anticipated to be fulfilled within the next two weeks.

Certain information set out in this News Release constitutes forward-looking information, including information relating to the timimg of perfection of the security interest contemplated by the Loan Agreement. Readers should review the cautionary statement respecting forward-looking information that appears at the end of this News Release.

The purpose of the Facility is to provide working capital funding for TVIRD, including funds to restart construction of its Sulphide project at Canatuan, located in the Zamboanga Peninsula in Southern Philippines. The Loan Agreement also provides that a second tranche of funding (up to an additional US$5 million) may be accommodated under the structure of the Loan Agreement, which would be sourced from one or more third party lenders to be identified by TVI and consented to by the Lenders. The Loan Agreement also contemplates a third tranche, which, in effect, represents the conversion of certain debts owed by TVIRD into the Loan Agreement. This tranche is limited to 42 million Philippines pesos (approximately US$1.035 million), which was advanced to TVIRD by an arm's-length third-party in December 2007.

"This is positive news for the Company, for Canatuan, and for the Zamboanga region," said Cliff James, President and CEO of TVI. "Subject to perfection of the security interest granted to the Lenders, the bridge loan enables us to resume construction of the Sulphide project, and at the same time provides us with window for the arrangement of longer-term financing both for this project and our exploration properties at Balabag and the North Zamboanga tenements."

The Loan Agreement provides that the Facility is subject to a fixed arrangement fee in the amount of 1% of the Facility and that funds borrowed under the Facility bear interest at the rate of 14% per annum, calculated from the date of the draw-down of funds under the Facility and compounded monthly.

Under the Loan Agreement, the Facility is scheduled to remain in place for a term of six months, but the Facility may be extended for an additional six months at the election of TVIRD. Extension of the Facility is subject to the payment of an extension fee of 1%, based upon the amount then outstanding under the Facility and to the satisfaction of a number of conditions, including the conclusion of an offtake agreement for a part of Canatuan production. The Loan Agreement confirms that principal and accrued interest under the Facility may be pre-paid at any time, in amounts not less than U.S.$2 million, subject to certain prepayment penalties.

As contemplated by the Loan Agreement, the Company, has guaranteed the obligations of TVIRD under the Loan Agreement and TVI Limited, a wholly-owned subsidiary of the Company has granted a security interest to the Lenders that covers the outstanding shares of TVI International Marketing Limited, through which the Company holds its interest in TVIRD. In addition, TVIRD has granted to the Lenders a security interest covering substantially all of its assets. The Loan Agreement provides that subparticipation rights in the security package granted to the Lenders will be made available to any provider of the second tranche funding anticipated by the Loan Agreement and that certain intercompany indebtedness of TVI group companies and shareholder loans will be subordinated to the Facility.

There can be no assurance that the Company and TVIRD will be able to successfully identify a lender or lenders for purposes of second tranche of funding provided for under the structure of the Loan Agreement. As well, there can be no assurance that the Company and TVIRD will be able to successfully negotiate an offtake agreement or longer-term financing for its Philippine operations.

About TVI Pacific Inc. (TSX:TVI)

TVI Pacific Inc. is a publicly traded Canadian mining company focused on exploring for and producing precious and base metals within district scale systems in the Philippines. The Company's interest in the Canatuan Mine and its other Philippine assets are held through its affiliate, TVI Resource Development (Phils.) Ltd. TVI's most advanced project, the Canatuan Mine, currently produces gold and silver dore.

Certain information set out in this News Release constitutes forward-looking information. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "intend", "could", "might", "should", "believe" and similar expressions. Forward-looking statements are based upon the opinions and expectations of management of the Company, as at the effective date of such statements and, in certain cases, information provided by third parties. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, and that information obtained from third party sources is reliable, it can give no assurance that those expectations will prove to have been correct. Forward-looking statements are subject to certain risks and uncertainties (known and unknown) that could cause actual outcomes to differ materially from those anticipated or implied by such forward-looking statements.
These factors include, but are not limited to, such things as the ability of the Company and TVIRD to perfect the security interest contemplated by the Loan Agreement within ordinary timeframes the occurrence of events that could have a material adverse effect on the business, operations, property or financial condition of the Company and its affiliates, including 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 mineral reserves, timing, results and costs of exploration and development activities, new laws (domestic or foreign) and changes in administrative practices. Accordingly, readers should not place undue reliance upon the forward-looking statements contained in this News Release and such forward-looking statements should not be interpreted or regarded as guarantees of future outcomes. Forward-looking information respecting the anticipated timing of completion of perfection of the security interests contemplated by the Loan Agreement is based upon information received from LIM and legal counsel to TVIRD and the Company. The forward-looking statements of the Company contained in this news release are expressly qualified, in their entirety, by this cautionary statement. Various risks to which the Company is exposed in the conduct of its business are described in detail in the Company's management's discussion and analysis for the year ended December 31, 2006 and the Company's amended Annual Information Form for the year ended December 31, 2006, which were filed on SEDAR on December 18, 2007 and are available under the Company's profile at www.SEDAR.com. Subject to applicable securities laws, the Company does not undertake any obligation to publicly revise the forward-looking statements included in this news release to reflect subsequent events or circumstances.

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

Contact Information