Mining in the Philippines

Our Accomplishments and Our Challenges

2

Our Properties

North Zamboanga Tenement Area = 162,403 hectares (401,307 acres)

0

Kilometres

Miles

0 25.0

15.5Manila

Tamarok & Tapisa

Copper / Gold

Projects

Canatuan

Copper / Zinc

Mine

Bonbon Gold

Prospect

Balabag

Gold / Silver

Project

Zamboanga Sibugay

Zamboanga del Norte

Zamboanga del SurGutalac

Municipality

Baliguian

Municipality

Siocon

Municipality

Dipolog City

3

TVIRD Timeline

1994 Signs an Exploration Agreement with Option to Purchase

1996-1998 Exploration commences under approved MPSA

2001 Executes MOU with Siocon Subanon Association, Inc.

2002 - 2004Buys and processes tailings from illegal small-scale miners (the “Environmental

Cleanup”)

2004 Gossan Project begins

2005 Recommences definition drilling/development program

2006Completes Gossan Dam, applauded by Canadian Ambassador and DENR

Secretary

2008 Gossan Project ends – Construction begins for Sulphide Project

2009 Commercial operations at Sulphide Project commence

20102010 Presidential Mineral Industry Environmental Awards

Platinum Achievement.

2011

2011 Presidential Mineral Industry Environmental Awards

Titanium Award for Excellence in Environmental Management

Safest Mine Award

2011 Ordinance Banning New Open Pit Mining Filed

4

Canatuan Before…

The area was an ecological

disaster with a degraded water

supply as a result of small-

scale mining

5

Canatuan Before…

Crude, leaky small-scale mining tailings ponds pouring mercury and

cyanide into the watershed

6

Canatuan Before…

6

Young children, with no access to basic education, often labour

along with their families

Child Labor

A 12-year old child

here is shown

unloading goods

8

Canatuan Today - Mining, Production & Shipment

PIT PLANT

PROCESSPRODUCTPORT

9

Canatuan Today

Canatuan Today

Today, children from Canatuan and surrounding communities go to school to learn and play

What we had to contend with…

Actions and Attacks Allegations Actors

• Blockades of company

equipment and personnel

• Protest actions and rallies

• Complaints lodged in

Philippine Congress,

Senate, Provincial Board,

and Canadian Parliament

• Complaint filed with the

UN Committee on the

Elimination of all forms of

Racial Discrimination

• Report: “Mining or Food”

• Philippine and

International media

• Internet

• Human Rights abuses

• IP Rights violations

• Harassment

• Encroachment on

ancestral domain

• Lack of social acceptance

• Militarization

• Environmental destruction

(e.g. “collapse” of tailings

dam)

• Cyanide poisoning

• Local government officials

• DIOPIM Committee on

Mining Issues (DCMI) and

other Roman Catholic

Church-based groups such

as CAFOD

• Philippine Indigenous

People’s Links

• Mining Watch Canada

• Christian Aid

• Rights and Democracy

• Alyansa Tigil Mina

• Former illegal small-scale

miners in Canatuan

• National government

executives and legislators

Mining in the Philippines

Our Accomplishments

Strong Indigenous leadership support

Subanon Chieftain Timuoy Jose Anoy (right) with

Subanon Seven Rivers Overall Chieftain Timuoy

Noval Lambo protesting against mining.

Subanon Chieftain Timuoy Jose Anoy (far right)

with Mansaka Chieftain Datu Cristante Alfons

and B’laan Chieftain Folong Motom Madule

leading the opening ceremonies of Coalition for

Responsible Mining in Mindanao launching

program in September 2010.

Canatuan before… Canatuan today…

14

Social Development & Management Program

Health, Sanitation and Fresh Water Sustainable Livelihood: Demo Farms

15

Health and Sanitation

Built health clinic that

provides free 24/7 healthcare

and ambulance service to

impact communities

Responsive Education

Built 6 schools, currently

2,500 students, 56 high

school graduates & 48

college scholarships

Infrastructure

Built or improved 85

kilometres (52.8 miles) of

roads, including 4 bridges

& a spillway

Sustainable Livelihood

Focused on sustainability, economics

and social well-being of community

including micro-finance, technical

skills, training & apprenticeship

programs

Royalty & Support for Ancestral

Domain

Extended technical & financial

assistance for crafting of Ancestral

Domain Sustainable Development &

Protection Plan

Development for Impact

Communities

Initiated projects in areas outside

Canatuan:

Built Sta. Maria water system

Built 11 kilometres (6.8 miles) of farm-

to-market road

Corporate Social Commitment

16

Biodiversity

50% of mining area remains in

original habitat condition

Watershed Management

More than 25 locations subject

to daily, weekly and quarterly

water quality monitoring

Reclamation and

Rehabilitation

More than 200,000 trees have

been planted since 2004

Tailings Management

Four tailings storage facilities

constructed with three undergoing

reclamation

Monitoring Programs

Monitoring by third party professionals

completed on weekly, quarterly and

annual basis

Research Programs

Onsite research and studies for

passive wetland acid mine treatment

using indigenous plants

Environmental Commitment

17

We are Transparent

• Mine Tours – “Our Doors Are Open”

• Quad-Media Information Campaign

• Strategic Industry IEC Alliance

National Mine Safety and

Environment Conference (November 2011)

2011 Presidential Mineral

Industry Environmental Awards

• Titanium Award for Excellence in

Environmental Management

• Safest Mining Operation

• Safest Surface Mining Operation

• Safest Mineral Processing,

Concentrator Category

18

Nu

mb

er 1

Pri

ori

ty“Best of the best” – and No Fatalities

Safety & Environmental Awards

National Mine Safety and Environment

Conference (November 2010)

2010 Presidential Mineral Industry

Environmental Awards

• Platinum Achievement Award, Surface

Mining Category

• First runner-up in the Safest Mines Awards,

Concentrator Category

• Runner-up in the Mining Forest Award,

Metallic Category

19

Nu

mb

er 1

Pri

ori

ty

Over 6 million man hours worked with only one lost-time incident

Department of Labor and Employment,

the Rotary Club of Zamboanga City-

East and the Zamboanga Peninsula

Tripartite Industrial Peace Council(June 2011)

• Most Outstanding Employer in Region 9

(Zamboanga Peninsula)

Over 4 million man hours worked with no lost-time incidents

“Best of the best” – and No Fatalities

Safety & Employer Awards

Department of Labor and Employment(May 2011)

• Outstanding Employer of Zamboanga del

Norte, Industrial Category

Philippine Bureau of Working

Conditions Awards, Department of

Labor (Sept 2010)

• TVI Safety for its 2009 performance of zero

lost-time accidents

• Top Occupational Safety & Health Manager,

Mining Category

TVI’s Contribution to the Economy

20

TVI has provided all of these to the local and regional

communities advancing Siocon from a Class 4 to a Class 1

municipality:

Jobs Roads, transportation across the peninsula Power & Communications (cell tower) Multiple levels of Education Hospitals, 24/7 Ambulance Security, peace & order Port facilities Water purification systems Training –agriculture, crafts, apprenticeship programs Environmental cleanup from pre-illegal small scale miners Taxes and royalties to Subanon and others

TVI’s Contribution to the Economy

21

2004-2008 2009 2010 2011As of Sept

Total

Excise Tax Paid (PhP) 77.8 M 62 M 68 M 53.6 M 261.4 M

Royalties Paid to IP (PhP)

1%, now 1.5% of gross revenue39.6 M 30.6 M 35 M 41.7M 146.9 M

Actual SDMP (PhP)

Expenses 23.2 M 7.4 M 11.5 M 25.9M 68.0 M

Business Permit (PhP)

(Siocon)6.7 M 0.35M 4.4 M 11.5M 22.9 M

Real Property Tax (PhP)

(Siocon / Baliguian)0.7M 0.3 M 1.5M 4.1M 6.6 M

CONTRIBUTION 148 M 100.6 M 120.4 M 136.8 M 505.8 M

Operating Costs (PhP) 4.0 B 1.3 B 2.0 B 2.1 B 9.0 B

CapEx 1.8 B 0.2 B 0.3 B 0.3 B 2.6 B

Mining in the Philippines

The Challenges

Ordinance Banning New

Open Pit Mining

The Ordinance

The Ordinance was approved by the Sangguniang Panlalawigan (Provincial Board) of Zamboanga del Norte

Bans open pit mining – but expressly permits small-scale mining, and mining by tunneling (i.e. underground)

Gives current open pit operations one year to operate, after which they have to cease operations and become completely rehabilitated

After 60 days, it requires existing open pit operations to have “totally curtailed” any siltation, erosion and mudflows

The Ordinance

• GIVES THE GOVERNOR EFFECTIVE CONTROL OVER MINING

• IS DRACONIAN

Governor is entitled to issue cease and desist orders, and to seize the mining assets, as well as the inventory of product produced, and of course, throw management in jail.

Requires that for any new application for mining (non open-pit) tenements, the Governor must give clearance of consultation – and there must be approval by all LGUs including the Province.

Gives any SEC accredited NGO the power of citizen’s arrest against any officer of a mining company if the NGO believes there is a violation of any provision of the Ordinance.

Levies 10% Environment Fund on new projects

The Ordinance

Is Invalid and Unconstitutional

Ordinance violates the due process, equal protection and non-impairment of contracts clauses of the 1987 Constitution

Ordinance is contrary to the applicable provisions of the Local Government Code and the Mining Act, and runs counter to the public policies espoused in these laws.

Ordinance would adversely affect the successful environmental protection and enhancement programs and the positive socio-economic impact that TVIRD operations has had on the community

The Ordinance

What It REALLY Means

Good Mining versus Bad Mining• Designed to promote irresponsible small-scale mining

Enforcement versus Non-Enforcement• Removes National Government Responsibility to ensure

responsible mining

Accountability versus Non-Accountability• Removes National Government Responsibility for a clean

environment versus destructive small-scale mining devastation to the environment

The Ordinance

Will shut down an operation that has become a major contributor of economic benefit to the Province.

a. Cleaned up the toxic waste of previous, illegal small-scale miners;b. Extensively rehabilitating impact and non-impact areas (230,000 trees to date);

c. Invested US$60 million in exploring and developing Canatuan; b. Invested US$23 million in the construction of world-class dams;c. In operation for seven years with full accountability; c. We employ ~1,000 people and positively affect the lives of thousands

more;

The Negative Impact

If the Ordinance is Not Stopped…..

Health and Sanitation

Built health clinic that

provides free 24/7

healthcare and

ambulance service to

impact communities

Responsive

Education

Built 6 schools,

currently 2,500

students, 56 high

school graduates & 48

college scholarships

Infrastructure

Built or improved 85

kilometres (52.8

miles) of roads,

including 4 bridges

& a spillway

Sustainable Livelihood

Focused on sustainability,

economics and social well-

being of community including

micro-finance, technical skills,

training & apprenticeship

programs

Royalty & Support for

Ancestral Domain

Extended technical & financial

assistance for crafting of

Ancestral Domain Sustainable

Development & Protection Plan

Development for Impact

Communities

Initiated projects in areas outside

Canatuan:

Built Sta. Maria water system

Built 11 kilometres (6.8 miles)

of farm- to-market road

Corporate Social Commitments

Security personnel participate in

Creating models for community livelihood

projects

Backyard poultry raising and marketing

Farm products supply food for mine

personnel

20 medical missions since 2009

Professionalizing the security organization

Integrated with the community

Commitment to Voluntary Principles on Security

and Human Rights training

Formed Emergency Response Team for the

community’s safety

Have earned tremendous, widespread

community support

Biodiversity

50% of mining area

remains in original habitat

condition

Watershed Management

More than 25 locations

subject to daily, weekly and

quarterly water quality

monitoring

Reclamation and

Rehabilitation

More than 200,000 trees

have been planted since

2004

Tailings Management

Four tailings storage facilities

constructed with three undergoing

reclamation

Monitoring Programs

Monitoring by third party

professionals completed on

weekly, quarterly and annual basis

Research Programs

Onsite research and studies for

passive wetland acid mine

treatment using indigenous plants

The Negative Impact

If the Ordinance is Not Stopped…..

Environmental Commitments Safety & Security

30

The Negative Impact

Health, Sanitation and Fresh Water Sustainable Livelihood: Demo Farms

If the Ordinance is Not Stopped…..

Our Action Plan

Legal Initiatives

November 2, announces preparation of legal challenge to nullify the

Ordinance

November 8, launched an action in court for a temporary restraining order

(TRO) and/or a preliminary injunction against any officers, agents,

employees, representatives and anyone acting on behalf and within the

control of Zamboanga del Norte from implementing an ordinance banning

open pit mining in the province.

November 17, first of four hearings

November 24, second of four

hearings

December 1, third of four hearings

December 8, final hearing to present

our evidence to support permanent

injunction

Our Action Plan

1. Key National Initiatives• Enlist support of Canadian Ambassador/Embassy

• Plan meetings with key National Government Secretaries

• Lobby DENR/MGB for support

• Chamber of Mines, CoreMin2, Joint Foreign Chambers, Jaycees

2. Key Provincial Initiatives• PR campaign in ZdN detailing benefits of TVIRD operations

• Mobilizing regional support from affected:

• Municipalities, Indigenous People, businesses

3. Municipal Initiatives• Working closely with the Siocon Town Officials

• Assisting concerned voters from Impact Barangays

• Petition from voters in Impact Barangays

• Mobilizing municipal IPs, affected municipal businesses

TVI Recommendations

1. Decisive action by the National Government

o Intervene – LGU’s cannot overturn an Act of Congress like

the Mining Act

o DENR needs to use its powers of supervision over LGU’s on

Mining/Environment

2. Enhance the revenue base and capacities of LGU’s

o Allow excise tax to be paid directly

o Increase revenue share of LGU’s from existing mining taxes

3. Streamline the administration process for mining

o A heavy, expensive, time-consuming process

o Coordination of NCIP - DENR

o Reinstitute the Minerals Development Council

Our Continued Commitment

We are

Proud of what we’ve achieved

Expressly proud of our social and environmental success

Our Continued Commitment

WE WILL VIGOROUSLY FIGHT THE ORDINANCE

We will continue to invest in mineral development for the benefit

of the Philippines

We will continue working with all of our stakeholders – including

the LGU’s, but we need strong National Government support,

now.

35

The Negative Impact

If the Ordinance is Not Stopped…..

The area was an ecological

disaster with a degraded

water supply as a result of

small-scale mining

Mining projects in

Zamboanga del Norte

will revert to what

Canatuan was before…

This presentation should be read in conjunction

with the Ordinance and associated TVI issued

news releases that can be found here

http://bit.ly/tvvkcq

Disclaimer

There can be no assurance that any litigation commenced by TVIRD in the Philippines courts or negotiations

with Zamboanga del Norte officials will result in nullification or retraction of the Ordinance or otherwise

mitigate the effects of the Ordinance on the operations of TVIRD at Canatuan.

Connect With Us

37

Rhonda Bennetto

VP IR & Corporate Relations

403.265.4356

rhonda.bennetto@tvipacific.com

Ian McColl

Investor Relations Analyst

403.265.4356

ian.mccoll@tvipacific.com

www.twitter.com/tvipacific www.facebook.com/tvipacific Create your own news links