TVI Pacific Inc.

TVI Pacific Inc.

January 21, 2008 11:17 ET

TVI Pacific Signs US$15 Million Bridge Financing Term Sheet

CALGARY, ALBERTA--(Marketwire - Jan. 21, 2008) - TVI Pacific Inc. (TSX:TVI) or (the "Company") announced today that it and its Philippine affiliate, TVI Resource Development (Phils.) Ltd. ("TVIRD"), have signed a nonbinding term sheet (the "Term Sheet") to secure funds with LIM Asia Arbitrage Fund Inc and LIM Asia Special Situations Master Fund Limited ("the Lenders") relating to a US$15 million bridge financing facility ("the Facility"). The Term Sheet indicates that the purpose of the Facility will be to provide working capital funding for TVIRD in the near term.

Certain information set out in this News Release constitutes forward-looking information, including information relating to (i) the anticipated use of proceeds from the Facility, and (ii) particulars of the terms and conditions upon which the Facility is to be made available (such as fees, interest rates, security arrangements, drawdown and Facility extension at the election of TVIRD). Readers should review the cautionary statement respecting forward-looking information that appears at the end of this News Release.

"As TVI currently has no long-term debt, the Company views the Facility as an appropriate interim step to fund ongoing construction activities at the Canatuan mine" said Cliff James, President and CEO of TVI. "We are pleased to be working towards an interim loan facility while we continue to pursue permanent arrangements to finance the sulphide expansion project at Canatuan, including through the establishment of a joint venture arrangement with an industry participant."

The Term Sheet also provides that a second tranche of funding up to an additional $5 million may be made available under the structure of the Facility, to be sourced from a third party negotiated by TVI and consented to by the Lenders.

The Term Sheet contemplates that the Facility, when established, will remain in place for a term of six months, subject to extension for an additional six months, at the election of TVIRD. Extension of the Facility for the additional six-month term will be subject to payment of a 1% extension fee based on the amount borrowed under the Facility and satisfaction of a number of conditions. The amounts drawn by TVIRD under the first tranche of the facility will bear interest at the rate of 14% per year, calculated from the date of the draw-down and compounded monthly. Amounts drawn under the second tranche of the Facility will bear interest at a rate between 0.5% to 14% per annum if the amounts borrowed are in United States currency, or adjusted rates if the loan is in Philippine Pesos. The Term Sheet indicates that principal and accrued interest under the first tranche of the Facility may be pre-paid at any time in amounts not less than US$2 million, subject to certain prepayment penalties. The Term Sheet further provides that partial payments on account of the second tranche of the Facility will not be permitted so long as any amounts remain outstanding under the first tranche of the Facility.

The Term Sheet confirms that provision of the Facility is subject to the satisfaction of a number of conditions for the benefit of the Lenders, including completion of satisfactory due diligence inquiries concerning TVI Pacific, TVIRD and various affiliates, execution and delivery of definitive documentation providing for the Facility and related security, registration of security interests in favour of the Lenders and there being no material adverse changes in the business, operations, property or financial condition of the Company, TVIRD and certain affiliates. The Term Sheet anticipates that the Company will guarantee the obligations of TVIRD under the Facility and that the security granted to the Lenders in connection with the establishment of the Facility will include a security interest in the outstanding shares of TVI International Marketing Limited, through which the Company holds its interest in TVIRD. The Term Sheet further contemplates that subparticipation rights in the security package to be granted to the Lenders will be made available to the provider of the second tranche of the Facility and that certain intercompany indebtedness of TVI group companies and shareholder loans will be subordinated to the Facility. At the time of the initial draw by TVIRD under the first tranche of the Facility, the Lenders will be entitled to an arrangement fee equal to 1% of the total amount of that tranche.

There can be no assurance that the Company and TVIRD will be able to successfully negotiate the definitive agreements for the Facility contemplated by the Term Sheet and that the Facility will be made available to TVIRD as contemplated by the Term Sheet.

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 and other Asian countries. 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 Company's ability to successfully negotiate the definitive agreements relating to the Facility and the security to be granted to the Lenders in connection with the Facility, the completion of satisfactory due diligence, and 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 use of proceeds from the Facility is based upon the Company's current business strategy, budgets, mine plans and projects, all of which are subject to change, and the current status of construction efforts at Canatuan. Forward-looking information respecting the timing of funding and terms and conditions upon which the Facility is to be made available are based upon the Term Sheet and discussions with the Lenders. 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 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

  • TVI Pacific Inc.
    Clifford M. James
    President and CEO
    (403) 265-4356
    TVI Pacific Inc.
    Paul Moon
    Director, Corporate Communications
    (403) 265-4356
    (403) 264-7028 (FAX)