TVI Pacific Inc.
TSX : TVI

TVI Pacific Inc.

October 20, 2005 14:44 ET

TVI Welcomes Canadian Government Response to Parliamentary Committee Report

CALGARY, ALBERTA--(CCNMatthews - Oct. 20, 2005) - TVI Pacific Inc. (TSX:TVI):

- Canadian Government recognizes the benefits and complexities of resource industry investment in developing countries.

- TVI's commitment is consistent with the Canadian Government's - to face the challenges in an environmentally and socially responsible manner. TVI believes that Canatuan is an exemplary project for environmental management and sustainable social benefits.

- TVI welcomes the opportunity to participate in further discussions of Corporate Social Responsibility (CSR) and Human Rights / Security best practices that emerge as a result of the Government's response.

- TVI views a facilitated process involving Canada's National Contact Point (NCP) as an opportunity to dispel "bum rap".

TVI Pacific Inc. (TVI) announced today that it welcomes the Government of Canada's Response to the Report of the Standing Committee on Foreign Affairs and International Trade, Mining in Developing Countries - Corporate Social Responsibility.

The Government has, in TVI's view, identified the key themes of resource development in developing countries - the desirability of investment activity abroad and the challenges that confront organizations that determine to undertake operations in foreign jurisdictions.

The desirability of resource development in developing countries is clear - it provides the capital, technology and expertise needed to enable such countries to harness their resource potential and generate the economic activity needed to counteract poverty and provide education, health care and sustainable livelihood opportunities to underprivileged populations, including indigenous people.

The challenges, as the Government has noted, stem from the fact that resource development must take place where the resources happen to be located; and this is often in areas that are remote, devoid of infrastructure, and where there is little in the way of developed political or administrative governance. In addition, there is often an existing, disadvantaged indigenous population. Lawlessness, rebellion and armed conflict often characterize these remote areas.

The Government of Canada is clearly sensitive to the challenges that businesses encounter as they attempt to address these complexities in a socially and environmentally responsible manner and it has committed to increasing its efforts to assist business in that regard - which TVI welcomes. But the Government's response also identified the ongoing difficulties that confront stakeholders in defining appropriate standards of Corporate Social Responsibility, and defining best practices concerning security and human rights.

TVI would welcome any opportunity to participate with the Government of Canada and other stakeholders in further discussions in this regard, as it continues to work diligently toward the development of best practices in these areas. The following is a summary of TVI's efforts:

- Social: TVI is implementing its Canatuan Copper-gold project in remote Mindanao, the Philippines, in such a way as to bring dramatic, sustainable benefits to the regional economy (thereby assisting in the Peace Process) and to the indigenous people in their ancestral domain. TVI sponsored initiatives are leading to increasing advances in education, health care and livelihood training in the area. TVI has recently entered into an agreement with a Development NGO to assist the local community to develop the capacity to manage the royalties that have begun flow to it as a result of operations at the Canatuan mine, which royalties are expected to increase substantially as TVI implements its expansion plans over the coming months and next year.

- Environmental: In developing the Canatuan mine, TVI is adhering to high standards of environmental management and protection - it has used world-class international engineering firms in the design and construction of the tailings containment facilities at Canatuan, as well as best practices in reforestation, rehabilitation and reclamation, which represents a significant improvement over prior mining practices in the area.

- Security and Human Rights: The Canatuan mine is located in an area characterized by political and military conflict, involving rebel guerrillas, armed brigands and even an Al Qaeda linked terrorist organisation and there have been two ambushes on Company vehicles in the past, as a result of which 15 members of the indigenous community were killed. In this environment, TVI and the Government of the Philippines have been required to depend on armed security to protect TVI personnel and members of the indigenous population. This security presence was implemented on an urgent basis after the ambushes, but as the Canatuan project matures and expands the approach to security is expected to undergo revision, as TVI continues to monitor evolving best practices concerning security and human rights and reacts to developments in relation to those practices. Among other things, TVI has initiated an evaluation of the Voluntary Principles on Human Rights and Security, promoted by the Prince of Wales' International Business Leaders Forum and by Business for Social Responsibility. TVI is also cooperating with the Canadian NGO, Rights and Democracy, which has determined to use the Canatuan project as a case study in its efforts to develop a Human Rights Impact Assessment methodology.

With regard to the specific Recommendations concerning TVI Pacific made by the Standing Committee on Foreign Affairs and International Trade, the Government of Canada stated that it recognises "the difficulties Canadian companies can face when operating in foreign jurisdictions" but would be open to a formal submission to the National Contact Point under the OECD Guidelines for Multinational Enterprises. TVI expects to cooperate in any ensuing dialogue, if such a submission to the NCP is made. TVI is of the view that any NCP process would provide it with a forum in which TVI will have an opportunity to present its position in a full and fair manner and address various criticisms directed at TVI in relation to its Canatuan operation. TVI has been concerned for some time that untrue allegations disseminated over the Internet and through international media sources have negatively affected its reputation, that TVI has not been provided with a forum or opportunity to properly respond to those allegations or probe the motivations of the individuals and organizations that disseminate them and that those responsible for such allegations have not undertaken the factual investigations necessary to verify their assertions.

TVI recognises that a number of the international organisations that have taken up the cause of local activists in the Philippines are well meaning and sincerely believe the untrue allegations that have been levelled against the Company. TVI has repeatedly invited various international organisations to visit the Canatuan project, to interview the people of the community, and to see the social, environmental, and economic benefits of TVI's activities for themselves. TVI welcomes the opportunity to be heard.

About TVI Pacific Inc. (TSX: TVI)

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

In the Philippines, TVI's most advanced project, the Canatuan Mine, the first, new, foreign-invested mine in many years, began mining and milling operations in mid 2004, and is now producing gold and silver in excess of 700 dmtpd (110 AuEq oz per day) from a gossan/oxide zone. Expansion is underway to achieve 1200 dmtpd (180 AuEq oz per day) by the end of 2005. Subject to receiving a positive feasibility study, which is currently underway, the construction of a sulphide flotation plant at Canatuan to process both copper and zinc concentrates from a sulphide zone is planned to be operational by the end of 2006. TVI holds a valuable 2.5% net smelter return (NSR) royalty on the Philippine-based Rapu Rapu project, the second foreign-invested, new, mining project in the Philippines, which has recently begun operations, with royalty cash flow to TVI beginning in Q4, 2005. Exploration in the Philippines is being conducted at Canatuan both to expand its resource base and to find new deposits, and at Balabag which represents a promising, advanced - stage gold exploration property located in North Zamboanga, near Canatuan. Extensive applications have also been filed on a new copper-gold mineral district, also near Canatuan, on which exploration is planned in the near future.

In China TVI's wholly-owned Chinese subsidiary, Hunan Pacific Geological Exploration Inc. (HPGEI) is the first foreign mining company to be granted both WOFE status and a Qualified Explorer Licence. HPGEI has four areas of interest; the Shuikoushan and Haoya gold exploration projects, areas of interest in the Golden triangle region on which exploration licences have been filed, and Tibet where initial exploration has begun.

TVI also has a Drilling Division, based in both the Philippines (EDCO) and China (HPD), which provides cash flow from contract drilling, and is currently experiencing a rapid growth in level of activity.

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