MANILA (Mindanao Examiner / Mar. 20, 2013) – TVI Pacific Inc. announced that its Philippine affiliate, TVI Resource Development (Phils.) Inc. has signed a nonbinding term sheet with Metropolitan Bank and Trust Company for a US$20 million term loan facility for its Balabag Gold/Silver project, located 75 kilometers east-northeast of TVI’s Canatuan mine in Zamboanga del Norte province in Mindanao.
Metrobank, the Philippines’ second largest bank, previously provided debt financing to TVIRD for its Canatuan Mine, all of which has been fully repaid.
The purpose of the Facility is to support the development of the proposed Balabag Mine by providing TVIRD with additional working capital funding for construction and commissioning activities and to support mining and processing activities.
The Term of the Facility is 3 years and provides for a 1 year grace period before repayments are to commence, spread equally over eight quarterly periods, beginning at the end of the 5th quarter.
The interest rate of the Facility is to be set at 90-day Libor plus 250 basis points (approximately 3%), to be fixed on a quarterly basis. The Facility is accompanied also by an additional US$3 million Letter of Credit available to TVIRD for a 180 day period at the prevailing market rate.
The Facility and LOC contemplate that the obligations of TVIRD under those instruments will be secured by the Balabag off-take agreement and Balabag Mining Production Sharing Agreement, a Continuing Surety Agreement to be provided by TVI, the equipment and facilities at Balabag, and a US $5 million deposit that will be releasable upon the Balabag mine site moving into operation.
Clifford M. James , Chairman and CEO of TVI, said: “We are pleased to conclude these financing discussions with Metrobank and to be provided the opportunity to move forward with Balabag once the remaining required permits are received. With the Term Sheet, we have addressed a further integral step in our efforts to establish commercial production at our Balabag Gold project.”
TVIRD continues to progress with success the critical elements to advance the development of the Balabag project, targeting plant construction by the second half of 2013 and first doré production by Q1 of 2014.
Significant achievements include:
a. The removal of all remaining illegal miners from the property. This is now complete with the enforcement of the Cease and Desist Order issued by the Department of Environment and Natural Resources. The CDO was enforced by the inter-agency efforts of the Provincial Government, Mines and Geo-Sciences Bureau (MGB), Environmental Management Bureau, the Philippine National Police, the National Bureau of Investigation and the Armed Forces of the Philippines on 23-25 October 2012.
b. Endorsement of the Environmental Impact Statement in February 2013 by the EMB technical review committee to the DENR office for the approval and issuance of the Environmental Compliance Certificate. The Declaration of Mining Project Feasibility document package is expected to be completed by the second quarter 2013 following the approval of the ECC.
c. Completion of an all-weather 10-km access road to the mine as part of the pre-development work. This road will serve as the main access for equipment and product transport.
d. Completion of plant design and equipment sizing. This was part of an update of the internal feasibility study that was previously submitted to the MGB.
e. Confirmation of community and Local Government Units’ acceptance and support through the continuing establishment of Community Relations and Development Programs.
f. Recommencement of the exploration drilling program in January 2013 , enabling the Company to continue its in-fill and extension assessment of the ore body.
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