Byline: MELODY M. AGUIBA
Toronto Stock Exchange-listed TVI Pacific Inc. is tapping Hill Street Capital LLC of New York to arrange financing for its sulphide plant in Canatuan, Zamboanga del Norte that is set to produce copper and zinc by the third quarter of the year.
The company is currently producing gold and silver dore at 160 ounces of gold equivalent from an oxide plant with a mill throughput averaging at 1,900 dry metric tons (DMT) per day. But the new sulphide plant whose construction is now "well advanced" will further raise its revenues.
"The ability of TVI to remain on a fast track schedule, to meet commissioning during the third quarter of 2007, is contingent on the timing of completing satisfactory financing," TVI said in a statement.
Earlier feasibility study (FS) conducted by Norwest Corp. (NC) indicated that the sulphide plant has a net present value (NPV) to TVI of $ 60 million and has an internal rate of return of 89 percent. This is at a metal price of $ 2 per pound of copper, $ 1.04 per pound of zinc, $ 550 per ounce of gold, and $ 9.50 per ounze of silver.
NC made another estimate based on metal prices lately at $ 2.53 per pound of copper, $ 1.67 per pound of zinc, $ 632 per ounce of gold, and $ 12.75 per ounce of silver. At these prices, NPV is at $ 114 million and IRR is at 149 percent.
"The decision to proceed with the sulphide's construction is a major milestone for TVI. The Norwest study indicates very robust economics," said Cliff James, TVI's president and chief executive officer.
To cut electrical costs, the company is constructing an overland power line which will supply power for both the sulphide and oxide plants. AT present, the oxide operations depend on costly diesel-fired generator.
A new tailings dam for the sulphide minerals is also being constructed along with a warehouse building. …