ALERT TVI

VERY IMPORTANT NEWS FROM TVI:

TVI Pacific Inc. and TG World Energy Corp. Announce Arrangement Agreement for the Acquisition of TG World Energy Corp. by TVI Pacific Inc.


23 Dec 2010 20:47 HE







Marketwire

TVI PACIFIC INC.

December 23, 2010 - 08:47:03 PM

TVI Pacific Inc. and TG World Energy Corp. Announce Arrangement Agreement for

the Acquisition of TG World Energy Corp. by TVI Pacific Inc.

CALGARY, ALBERTA--(Marketwire - Dec. 23, 2010) - TVI Pacific Inc. ("TVI")

(TSX:TVI) (OTCQX:TVIPF) and TG World Energy Inc. ("TG") (TSX VENTURE:TGE)

announced today that they have entered into a definitive arrangement agreement

(the "Arrangement Agreement"), under which TVI has agreed to acquire all of

the outstanding common shares of TG not owned by it as of the effective date

of the acquisition on the basis of 0.67 of a TVI common share for each TG

common share (the "Transaction"). The Arrangement Agreement provides that the

Transaction will be structured as a plan of arrangement under the Business

Corporations Act (Alberta) (the "Arrangement").

In addition, TVI has agreed to purchase 29,650,000 TG common shares and invest

$1,317,500 by way of a convertible promissory note to assist TG in financing

its immediate obligations.

TVI's principal assets are its interest in the producing Canatuan copper-zinc

mine in Mindanao, Philippines, its interest in the Balabag epithermal

gold/silver deposit also in Mindanao and its interest in a broad array of

prospective mining tenements in the Zamboanga Peninsula, Philippines.

TG's principal assets are its interest in an offshore oil and gas concession

located in the Philippines, its interest in a joint venture covering certain

oil and gas prospects located on the Alaska North Slope and its interest in a

joint venture with an affiliate of China National Petroleum Corporation

relating to exploration prospects in Niger, Africa.

Details of the Transaction

Upon completion of the Transaction, all TG common shares not owned by TVI at

such time will be automatically exchanged on the basis of 0.67 of a TVI common

share for each TG common share. The consideration to be received by TG

shareholders pursuant to the Arrangement represents an approximate 48% premium

over TG's 20-day volume-weighted average trading price, and an approximately

78% premium over TG's closing price as at December 22, 2010.

Upon completion of the Transaction (and after giving effect to the private

placement transactions described below), TVI will have approximately 577.9

million common shares issued and outstanding, of which current TVI

shareholders will own approximately 84.4 % and former TG shareholders will own

approximately 15.6%.

The total value of the Transaction to TVI has been estimated at $13.5 million,

consisting of a combination of cash to be invested in connection with the

purchase of TG common shares and TG convertible note and the common shares of

TVI to be issued upon completion of the Arrangement (with each such TVI common

share having an ascribed value equal to TVI's 20 day volume weighted average

trading price of $0.12).

Click here to view a Snapshot of the Transaction Details

Business Rationale for the Transaction

In authorizing the Transaction, the TVI Board of Directors determined that the

acquisition of TG would allow TVI to leverage its extensive relationships in

the Philippines by entering the Philippine oil and gas sector. This could

provide TVI with access to a second cash flow stream that would help to offset

TVI's exposure to base and precious metals commodity pricing risk.

The TVI Board of Directors believes that this Transaction will allow TVI to

capitalize on broader development opportunities opening up in the Philippines.

Following completion of the Transaction, TVI is expected to:

-- have a second resource base, which will include additional assets in the

Philippines; and

-- have an attractive mix of production, development and exploration stage

resource assets.

"We believe that the Transaction represents an attractive opportunity for TVI

shareholders," said Cliff James, President and CEO of TVI. "TVI has a

strategic need for an acquisition to expand its cash flow sources, but high

commodity prices are making advanced acquisitions in the Philippines mining

sector difficult to secure. This opportunity will also allow TVI to build

scale and scope through an investment in an additional resource that is

expected to help mitigate the risks associated with a single commodity."

"The TVI Board of Directors views the acquisition of TG, including its assets

in the Philippines, as an important addition to TVI's existing portfolio,

"added Brian Cramm, the Chairman of the independent Special Committee of TVI's

Board of Directors. "The combined cash flows from operations should allow TVI

to pursue production from wells drilled within the offshore Philippines

concession, to continue the Company's mining exploration and development

activities on the North Zamboanga tenement package and to pursue other

resource opportunities."

Mr. Wayne Thomson, Chairman of TG added, "the planned combination represents a

unique opportunity for TG's shareholders. The Transaction will merge

anticipated cash flow from the offshore Philippines wells (and possibly North

Tarn, Alaska) with a corporation that will have the financial and technical

capacity to move TG's oil and gas projects forward. TVI is a well-managed

Canadian mining company with roots going back over 15 years. TG is pleased to

be able to offer it shareholders an opportunity to become a part of this

larger and stronger enterprise".

Private Placements

Subsequent to the execution and delivery of the Arrangement Agreement, TVI

entered into a subscription agreement with TG (the "TVI Subscription

Agreement"), which provides for TVI to purchase 29,650,000 common shares of

TG, at an aggregate subscription price of $1,482,500, representing a per share

sale price of $0.05. The TVI Subscription Agreement also provides for the

purchase by TVI of a $1,317,500 principal amount convertible promissory note

of TG (the "Note"). The TVI Subscription Agreement contemplates that the

principal amount of the Note (and accrued interest) may be converted into TG

common shares, at a conversion price of $0.05 per share, in certain

circumstances, including: (i) the TG Board of Directors having resolved to

accept an acquisition proposal from a third party that constitutes a "superior

proposal" for purposes of the Arrangement Agreement; (ii) if, after

conversion, the number of TG common shares held by TVI would be less than

19.5% of the total number of issued and outstanding TG common shares; (iii) if

the conversion is approved by the TG shareholders; (iv) if the TG common

shares are delisted from the TSX Venture Exchange; (v) if the TSX Venture

Exchange provides its consent to conversion; or (vi) at any time following

December 31, 2015. After giving effect to the purchase of TG common shares

pursuant to the TVI Subscription Agreement, TVI will own approximately 19.5%

of the total number of issued and outstanding TG common shares (not including

TG common shares that may be issued upon the conversion of indebtedness owing

under the Note or the 12 million TG common shares proposed to be issued to LIM

Asia Special Situations Master Fund Limited in connection with the private

placement transactions described below).

The TVI Subscription Agreement provides that the net proceeds from the sale of

TG common shares and the Note will be used by TG to pay amounts owing, or that

may become owing, in respect of the oil and gas assets of certain TG

subsidiaries in the Philippines and Alaska and (to the extent of any balance)

for other corporate purposes.

TVI intends to vote the 29,650,000 TG common shares referred to above in

favour of the Arrangement at the special meeting of the TG shareholders,

optionholders and warrantholders that is to be called and held to consider and

vote upon the Arrangement (the "Meeting").

In addition, TG has entered into a subscription agreement with LIM Asia

Special Situations Master Fund Limited (the "LIM Subscription Agreement"),

under which LIM has agreed to purchase 12 million TG common shares, at an

aggregate subscription price of $600,000, representing a per share sale price

of $0.05.

The private placement transactions contemplated by the TVI Subscription

Agreement and the LIM Subscription Agreement are expected to close promptly

following receipt of all required regulatory approvals.

TG Board Recommendation

Negotiations concerning the Transaction were conducted on behalf of TVI by a

special independent committee of the TVI Board of Directors consisting of

Messrs. C. Brian Cramm and Jan Horejsi and on behalf of TG by a special

independent committee of the TG Board of Directors consisting of Messrs. Wayne

Thomson, Gordon Hoy, David Moscovitz and Michael Ames.

The TG Board of Directors, on the unanimous recommendation of its independent

special committee, has determined that the Transaction is in the best

interests of TG and the TG shareholders and has resolved to recommend that TG

shareholders vote in favour of the Arrangement. Management and the directors

of TG and certain other shareholders, who beneficially own or exercise control

or direction over approximately 4.01% of the issued and outstanding TG common

shares, and options entitling them to purchase up to an aggregate of

approximately 3,950,000 TG common shares, have entered into support agreements

with TVI under which such persons have agreed to vote their TG common shares

in favour of the Arrangement. Two additional shareholders of the Corporation,

who currently own (in the aggregate) approximately 31.39% of the outstanding

TG common shares have advised TVI of their support for the Transaction and

have indicated that they plan to vote their TG common shares, and any TG

common share purchase warrants held by them, in favour of the Arrangement at

the Meeting.

The Arrangement Agreement prohibits TG from soliciting or initiating any

discussions concerning the sale of material assets or any other business

combination involving TG and provides TVI with the right to match any

competing proposal that TG receives from a third party. Under the terms of the

Arrangement Agreement, TVI is entitled to receive a $500,000 termination fee

from TG in certain circumstances. Additional details relating to the

Arrangement Agreement will be included in the information circular to be

delivered to TG shareholders, optionholders and warrantholders in connection

with the Meeting. Copies of the Arrangement Agreement and certain other

documents will be filed with the applicable Canadian securities regulatory

authorities and will be available at www.sedar.com.

TG'S Financial Advisor And Fairness Opinion

Jennings Capital Inc. acted as financial advisor to TG and has provided a

verbal opinion to the TG Board of Directors that, as of December 21, 2010 and

subject to the assumptions and limitations contained therein, the Transaction

is fair, from a financial point of view, to TG shareholders. MacLeod Dixon LLP

acted as legal counsel to the Special Committee of the TG Board of Directors

and Borden Ladner Gervais LLP acted as legal counsel to the Special Committee

of the TVI Board of Directors.

Closing of the Transaction and the Private Placements

Completion of the Transaction is subject to the receipt of all necessary

securityholder, court and regulatory approvals (including the approval of the

Toronto Stock Exchange and the TSX Venture Exchange) and the satisfaction or

waiver of certain other conditions. The resolution respecting the Arrangement

will require the approval of not less than 66 2/3% of the votes cast by TG

shareholders, optionholders and warrantholders (voting together as a single

class) at the Meeting. The Meeting is expected to be held in late February

2011. An information circular relating to the Meeting is expected to be mailed

to TG shareholders, optionholders and warrantholders in January 2011 and the

Transaction is expected to close by early March 2011.

Completion of the private placement transactions contemplated by the TVI

Subscription Agreement and the LIM Subscription Agreement is subject to the

receipt of all necessary regulatory approvals (including the approval of the

TSX Venture Exchange). All securities issued pursuant to the TVI Subscription

Agreement and the LIM Subscription Agreement will be subject to hold periods

imposed under applicable Canadian securities laws and stock exchange rules.

About TG World Energy Corp. (TSX VENTURE:TGE)

TG World is a Calgary-based, junior international oil and gas company with

exploration, development and production operations in the Philippines, Alaska

and Niger.

TG World (BVI) Corp. (a wholly-owned subsidiary of TG World) is partnered with

operator Nido Petroleum Ltd., Kairiki Energy Ltd. and Trafigura Ventures III

BV in a joint venture for Service Contract 54A in the North West Palawan Basin

of the Philippines.

TG World Energy Inc. (a wholly-owned subsidiary of TG World) is partnered with

operator Brooks Range Petroleum Corp., Alaska Venture Capital Group, Brooks

Range Development Corp. and Ramshorn Investments Inc. in a joint venture that

is pursuing oil and gas opportunities on the Central North Slope of Alaska.

TG World Petroleum Ltd. (a wholly-owned subsidiary of TG World) is partnered

with operator CNPCIT, a unit of the China National Petroleum Company, in the

Tenere Block oil and gas concession in the Republic of Niger, Africa.

About TVI Pacific Inc. (TSX:TVI) (OTCQX:TVIPF)

TVI Pacific Inc. is a publicly-traded copper producer focused on the

production, development, exploration and acquisition of precious and base

metal mining deposits in the Philippines. The Company's interest in the

Canatuan Mine and its other Philippine assets are held through its affiliate,

TVI Resource Development (Phils.), Inc.