Ms. Rhonda Bennetto reports
TVI PACIFIC PROVIDES FIRST QUARTER 2011 FINANCIAL AND OPERATIONAL RESULTS
TVI Pacific Inc. has released its unaudited, consolidated financial and operational results for the first quarter ended March 31, 2011.
For a thorough explanation of the points noted in this news release, shareholders are encouraged to read the interim consolidated financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), and management's discussion and analysis for the quarter ended March 31, 2011. These documents were filed with certain securities regulators in Canada on May 13, 2011, and are available on the company's website or under its profile on SEDAR.
Quarter ended Quarter ended
Financial snapshot March 31, 2011 Dec. 31, 2010
Cash balance ($ million) $20.4 $8.9
Average copper price received
(U.S. dollars per pound) $4.38 $3.89
Gross revenue ($ million) (1) $11.3 $19.2
Production cash costs (U.S. $) $2.01 $1.57
Total cash costs net of byproducts (U.S. $) $1.55 $1.14
Net revenue ($ million) (1) $10.8 $18.5
Net income ($ million) (1) $0.268 $1.2
Basic earnings per share $0.000 $0.001
(1) Only cash received from the 20th shipment could be recognized as revenue
for the quarter because the concentrate for the 21st shipment was not
loaded onto the vessel until the second quarter.
Financial summary
TVI was originally scheduled to complete two shipments in the first quarter of 2011. Unfortunately the vessel was delayed for the second shipment. As a result, the company received gross revenue in the first quarter of $11.3-million for 4,997 dry metric tonnes (dmt) of copper concentrate for the 20th shipment. As of March 31, 2010, inventory of 5,836 dmt of copper concentrate remained in storage.
At March 31, 2010, the company held $20.4-million in cash and cash equivalents that it can reinvest into growth opportunities.
The company holds short-term debt instruments totalling $20.1-million at an average interest rate of 1.85 per cent relating to its mining assets and also holds long-term debt totalling $6.7-million (U.S.) at an average interest rate of 16.14 per cent relating to its oil and gas assets.
OPERATIONAL SNAPSHOT, QUARTER OVER QUARTER
Quarter ended Quarter ended
Selected operational highlights March 31, 2011 Dec. 31, 2010
Copper pound equivalent produced 4,448,021 5,185,333
Copper produced (pounds) 3,330,593 3,740,813
Gold produced (ounces) 1,035 1,432
Silver produced (ounces) 101,380 119,652
Production cash cost (U.S. $ per Cu pound eq) $2.01 $1.57
Average copper price received (U.S. $ per pound) $4.38 $3.89
Quarterly operations summary
The average daily throughput for the quarter ended March 31, 2011, was 1,864 dry metric tonnes. Based on the remaining reserves and resources as at March 31, 2011, including expected increases in throughput, the estimated remaining mine life is approximately 2.3 years.
Production cash cost increased quarter over quarter because of lower output (resulting from lower tonnes processed and lower recovery, offset by higher grades), and higher production costs due to the increased consumption of chemicals and other costs required as a result of the increased zinc content of the ore being processed, as had been anticipated. Also contributing to higher production costs in the quarter were the delays and interruptions associated with the commissioning of the zinc circuit.
Zinc production
As reported on April 25, 2011, zinc concentrate production began with initial modest volumes. TVI expects that, with effective copper-zinc separation now being achieved, zinc concentrate volumes will ramp up so that a first shipment is likely be made prior to year-end 2011.
As a result of zinc separation being achieved, TVI has returned to steady copper production at Canatuan.
Quarter ended Quarter ended
March 31, 2011 Dec. 31, 2010
Total tonnes processed 167,780 194,585
Average tonnes processed per day 1,864 2,115
Ore copper grade 1.15% 1.04%
Copper recovery 78.18% 83.91%
Concentrates produced (dmt) 7,830 9,684
Average daily concentrates produced (dmt) 87 105
Concentrate copper grade 19.29% 17.52%
Concentrate gold grade (g/t) 4.11 4.60
Concentrate silver grade (g/t) 402.71 384.29
Off take
Copper concentrate shipped (dmt) 4,997 10,181
Copper concentrate inventory (dmt) 5,836 3,003
Outlook
Greater Canatuan tenement area (GCTA)
The airborne data acquisition has been completed, and the results are being analyzed.
Arrangements have been made with the company's joint venture partner, DMCI-CERI, a subsidiary of DACON Corporation, and the Philippine Mines and Geosciences Bureau with respect to the EXPA 61 tenement area whereby a certificate of non-overlap with nearby ancestral domains has been submitted. This document will support the application currently being processed by the government for the exploration permit required to begin drilling the anomalies and prospects identified to date.
The company is also working on perfecting other near-mine tenement applications in order to follow up on additional anomalies identified by the airborne data.
Balabag
The development-stage Balabag gold project is a high-priority project. As of March 31, 2011, 39 holes had been completed in phase 2 with 32 out of 39 showing mineralization. The exploration portion of the phase 2 drill program, which was focused on step-out drilling in the downdip mineralized zones, was successful in its objective of confirming and extending the Balabag mineralization. This component of the program is expected to be completed around midyear 2011. It is anticipated that the program will also include further infill drilling in the core area of the Tinago vein zone to increase the level of confidence of information used for production planning.
Based on assay results from the phase 2 drill program to date (released on April 5, 2011), a decision was made to submit a declaration of mining feasibility to the Mines and Geosciences Bureau of the Philippines. This report involves an evaluation of the economics of mining a minimum identified core resource and includes capital costs such as infrastructure, plant and pit development, and operating costs such as mine and mill costs, tailings disposal, environmental remediation and social programs.
TVI intends to produce an updated NI 43-101 report in the second half of 2011 that will incorporate all drill results to the end of the second quarter of 2011.
North Zamboanga tenement area
TVI has advanced its exploration activities including geophysical surveys, systematic detailed geological investigations and drilling on the Tamarok copper-gold project. On April 11, 2011, TVI announced an initial drill program at Malachite Hill consisting of six to 12 holes and up to 4,000 metres (13,100 feet) total depth, depending on accessibility and initial results. This drill program is in progress.
Petroleum and natural gas properties
In Alaska, the company is assessing the results of its recently completed North Tarn drilling program where 20 to 25 feet of Kuparuk target sand thickness is estimated based on cutting samples. The partners are planning further activity during the 2011/2012 winter drilling season.
In Niger, the Chinese National Petroleum Company International Tenere Ltd. (CNPCIT), a wholly owned subsidiary of the Chinese National Petroleum Company (CNPC), has advised that it expects to complete the third exploratory well, of the three-well minimum work program, in the third quarter of 2011. CNPCIT is the operator and finances 100 per cent of costs of the minimum work program.
In the Philippines, the partners are currently assessing future drilling plans for Service Contract 54A. When the partners decide on a timeline, shareholders will be updated.
We seek Safe Harbor.
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