Replies to post #310 on TVI Pacific Inc (TVIPF)

[davidjk]

just doing some dd i found this older article :

Finding a gem in the Philipines

After reviewing Q1 results from TVI Pacific (tsx: TVI), the AGM webcast and the Q&A session, many things are exceptional about this small but so profitable mining company.
Sure copper did take a beating recently as did zinc.
Sure TVI Q2 results could be lower than Q1.
Sure that the new zinc circuit is still in the adjustment phase
Sure the daily share volume is not there actually as if nobody wanted to buy and nobody wanted to sell (not a bad thing by itself…)
Sure China seems to be lowering growth expectations
Sure that the many presentations around the globe has not given the expected results (it take some time to decide an investment in a mining company)
Sure that remaining mine life is about 3 years and 2 really profitable
BUT:
How many times have you been able to buy shares in a mining company for about the same as cash generated (using 4 X Q1 results) ?
Q1 net earnings results are not due to any 1 time event: no particular credits, no tax rebates etc. No, they have earned every penny by mining in their Canatuan property and keeping their cost per ton very very low.
How about also a company with only about 10M$ in debt: 4M$ in a high interest loan (should be repaid in Q2 or Q3 maximum) and near 6M$ with a bank loan with an interest close to 4%?
How about a company with over 16M$ in the bank (end of Q1 2010) ready to either pay everything off or do some acquisitions in the Philippines?
How about a company actually at the end of a 4 months drilling program to confirm gold presence in Balabag (100% owned by TVI) with results soon to be released?
How about a company that has signed an agreement with DCMI (one of the major Philippine Company operating in many areas) to develop near Canatuan property in a JV form agreement?
How about a company that has so many properties or mining right that they cannot drill them all right now by themselves?
How about a company that can move around from bankruptcy (or close to) and become, within 1 year, a very highly profitable corporation?
How about a company that has a facebook site and corporate web site so complete that nothing is hidden anywhere and any questions can be asked and answered at any time?
How about company making copper shipments almost months after months on a very regular basis?
How about a production cost per ton of close than 0,60 cents?
How about 0,10 cents per share and a market cap of 49M$ when revenues will be close to 80-100M$ ?
Is that possible at all? Yes it is and it is the story of TVI Pacific lead by Mr Clifford James.
This little (but very profitable) company was facing bankrupt in early 2009 when they were able to obtain the necessary credits to go ahead with their Canatuan copper circuit that was commissioned in march 2009 and shipments started in April of the same year. Since that time 15 shipments have been realized and profit is absolutely incredible. In early 2009 plan was to get about 3M$ in revenue per month but ramping up production and keeping cost down made TVI able to get revenues over 26M$ in the last quarter and a very profitable 3months with 8M$ in net profit even when amortization of loan was taken into account (paying off debt earlier than expected forced TVI to recalculate their original loan expenses on a yearly basis instead of a 5 year term). Without that recalculation net profit would have been over 10M$ IN ONLY 3 months. If this is not performance I am wondering what could be…
So what’s missing?
Mine life extension: How about the zinc circuit coming operational soon with a take-off agreement very profitable?
How about Canatuan expansion with Dacon? Are they not the experts in road, bridges, almost all kind of infrastructure so dearly needed to access those hard to reach areas?
How about Balabag where maybe close to 1M ounces of gold will be proven? Is this not close to 1B$ (1000 million dollar$ project)
How about jv ventures to explore the lands where mega budget are needed?
Why not partnerships with a company like Xstrada to join TVI in developing some areas?
It could be just plain speculation from my part but could you imagine the result on the share value?
Honk Kong Listing Why not? Do you really believe TVI has all the audience in Canada they deserve? Who care about a Canadian company operating in the Philippines? Do they know that Philippines are one of the biggest resources area and most of it NOT being mined? I would bet that the mentality in Asia is a lot more investment based than speculation…What would be an initial IPO in Hong Kong: 50M$, 100M$ or a regional listing for Canadian shares? Had you had a look recently on the way foreign company listed in Hong Kong have been received? Well a lot better than we do with our own companies. My impressions are they know more about finance than we do. Maybe it is also a difference in the mentality. Maybe they know where they want to go but also knows the time needed to get there.
It is fascinating to see many companies with share price based solely upon expectations and speculation. They have neither revenues nor profit but they still manage to have sometimes their share valued higher than a company like TVI. They climb really high really fast then the drop like a rock when they find out nothing was to be drilled out there. They sometimes look like some gas and oil drilling companies promising to drill so many barrels per day that they will all become billionaires and end up finally with not even oil enough to fill a lighter…(I can name a few but will restraint myself..)
Maybe our way to evaluate a company is more from a speculative view than financial reviews…Maybe it is time to even evaluate our own analysts…Maybe it’s time to evaluate our own way of investing (or the radical definition of investment).
But in the stock market business you always like to find a great company before everybody else ear about them and in my humble opinion, that is the case for TVI Pacific. A perfect company for an investment in Asia where the money is, where the resources are and where the people have the ‘know-how’ to be profitable.
To me TVI was, is and will still be one of my favourite pick for 2010 and unless something dramatic happen, it will also be for 2011 as I think their future is a lot brighter than their past and with all projects underway, one will someday catches a lot more attention and guess what: share value will sky rocket.
So this deal on share is ‘WHILE QUANTITY LAST. SORRY NO RAINCHECKS…’

[Joseph-]

Morning davidjk,
I don't want to make you feel too comfortable that you have all the time you want to accumulate, I simply meant we "probably" won't see much of a bump till the mine life extension. There are a grip of expected updates expected during Q1, and quite honestly the company has tossed out a few surprises recently, any of which could possibly become reflected in share price. I believe you do have a bit of time, but don't get me wrong and get caught with your pants down as when this does move, I'm certain it will be with very little warning. I simply meant that I think this is a great chance to be patient and accumulate at a lower price, not to hold off all together for some months...
As for this new deal they just made with the oil company, it's still a bit too early to know exactly what this means. They're essentially forking out a few million to see what their recent drill results will be and then already have the paperwork completed to swoop in and grab 'em cheap. After they own nearly 85% of this new company, this could be something big down the road as well for them, but it's entirely too early to know just yet. If the results are not favorable, it's my belief they will cut ties and lose a bit under $3MM, nothing too severe for how much they continue to bring in. I must admit though, this move certainly perplexed me as I really want them to focus on Balabag and mine life extension. Get the bootstrap mine up and operational, and after that start focusing on Tamarok. They know mining very well and have proven this to us thus far, how well they know oil is a bit unclear. But this certainly sounds like a favorable opportunity to buy something cheap - which should be profitable. Check them out, they're further along then I think most people expect.
Your article is a good one that I remembered reading some time back. So much of it remains true to this day; The killer shark loan has been paid off and is gone! Zinc was delayed till just last month when they finally got it going. They had some trouble getting the right results, but worked through it and is now up. We never got those Balabag drill results as was expected, but that should come here shortly. (and keep in mind we're probably not going to see the full results, just enough to prove they have enough to be profitable to get the bootstrap mine operational rather then obtaining a loan) It's my belief they held off on results to do some further drilling to assist where to locate the bootstrap mill itself. Pending what these results are, this might give us our first major % bump in price, and that's expected this quarter.
Here is a quick breakdown for ya of what's coming up this quarter, any of which might get attention.


- EOY report which I’m sure will provide further guidance, and take confidence knowing they met their expectations for 2010.

- Zinc Circuit is in full production, which adds millions of extra dollars to each shipment...without any further costs as this was lost money from previous shipments.

- An update on the scope study of Balabag gold project, shortly followed by the full 43-101 proving even further gold reserves at Balabag. (And it is my firm belief that the major investors will promptly jump aboard upon the scope study, it's the banks who will demand the full 43-101, and a loan is not the way they're attacking this play...they're going with a bootstrap mine which will begin production much sooner)
”An internal scoping study has been launched and TVI expects to come to a decision regarding a "Bootstrap" mine development plan in Q1, 2011.”

- An update to Siennalynn project as they're working diligently on the scope study and 43-101 to be released ASAP, which is expected to at least double the current mine life at Canatuan.
“It is anticipated that Stage 1 drilling will be completed by mid-Q1, 2011 with assays and evaluations completed by the end of the same quarter. Preparation is ongoing for the Stage 2 drill program. The extent of this additional drilling will be determined as progress is evaluated during Stage 1.”

- An update on the addition of seven of the Company's rigs that will be returned from Kyrgyzstan during Q1, 2011. These rigs will be used on the Siennalynn, Balabag and Tamarok exploration projects. (This will double the number of rigs they have from 7 to 14, and just in time with so many future projects coming to fruition!)

- Part 1 and Part 2 of the airborne surveys are expected to be completed by early 2011.

- Getting back out to Hong Kong and Singapore to present what they have, where they will likely get the most positive reaction from. And let's not forget it has been mentioned they are interested in being listed on the Asian markets.

- “Drilling is expected to begin on identified targets on the Tamarok copper-gold prospect in early 2011” - which holds the potential to be a HUGE project!

- Lastly, keep in mind the current bull run that commodities have been on; copper in particular for these folks. Just look at what they got from this past shipment, $9.7MM (from the average of $8MM before). So if copper can hold steady (and is expected to continue a 5 year bull run) then that alone is nearly an extra $2MM per shipment. Add in the zinc and we're looking at an estimated EXTRA $30MM this year (assuming they make 8 shipments as has been in the past). Their revenue this next year from Canatuan alone might come very close to $100MM.