STOCK PROFILE - TVI Pacific Inc. - Last updated Jan. 4/07; 

TVI Pacific Inc. is a Canadian Gold mining company... it's head office is located in Calgary, Alberta, Canada... shares of the company trade on the Toronto Stock Exchange under the symbol "TVI"... (Yahoo.com Finance Quote: "TVI.TO").

TVI is a real "producing" Junior Gold mining company... the company is not merely just a "exploration" or "development" company... and this is a very important distinction to make, because statistically; less than 1 in 1,000 mining exploration projects ever make it to the true "production" stage... "exploration companies" face very slim odds in ever becoming a "true producer", and a mining exploration company that cannot eventually make it to production, a merger, or a buy-out, eventually faces dilution, bankruptcy, dormancy, re-organization, or similar value-destroying fates.

So, not only is TVI a real Gold producer, the company is also entering a very strong period of growth within the companys history, IE: From a press release on May 10/06 TVI reported 171% revenue growth, and from another press release on Aug. 9/06 TVI reported 332% revenue growth, and from another press release on Nov 6/06 TVI reported 203% revenue growth... so providing mngmt. can continue to competently execute their business plan, combined with a general environment of rising Precious Metals prices, TVI's shares could produce healthy rates of return over the next 12 - 24 months from current share price levels.

Some pictures of TVI's mining operations...

TVI also owns it's own Drilling Company (actually it owns 2 Drilling Companys; one in China, and one in the Philippines)... these Drilling Companies provide additional and diversified cash-flow for the company and also help alleviate drilling risks associated with the very tight world-wide supply of available drilling rigs.

TVI's growth pattern is not without some risk however... the majority of the companys revenue is generated in the Philippines... and as most people know, every once in a while the Philippine Govt. seems just a step or 2 away from another coup attempt, or some other structural change... however, "country risk" with the Philippines is a different type of "country risk" than is typically associated with South American countries like Venezuela or Bolivia, where in South America, the entire ideology of a Govt. can be at high risk of quick, sudden, and radical changes... so while the stability/structure of the Philippine Govt. may at times look risky, the underlying business ideology of whichever Philippine Govt. comes to power, I'd argue; is at much less risk of a quick, sudden, and radical change to business ideology than compared to certain South American countries.

Natural resource companies in the Philippines have a history of being particularly vulnerable to various risks within the Philippines... in fact, the Philippine mining industry only just within the last 1 - 2 years was brushed by an increase in political risk, of which a consensus seems to have been reached and is holding. And a new risk to Philippine companies has been the recent increase in Hurricane activity, in fact, one of TVI's partners has recently had to temporarily halt it's mining operations due to damage from the most recent hurricane.

TVI has possible prospective land positions in China... which the company indicates are still in the early stages of potential exploration... the company seems to have put forth considerable effort in China over the past approx. couple years, and if ever leading to successful precious metals production, could add significant future value to the company, as producing Chinese mining assets receive much higher valuation multiples than Philippine mining assets... however, there seems to be a high degree of risk associated with whether TVI will eventually be able to convert their China efforts into shareholder value of any measurable level in the future, in fact, TVI has experienced on-going permitting delays in regards to their China work (excluding their Chinese Drilling company work).

Regardless, country risk already looks deeply priced into TVI's stock, as the stock of a comparable purely Canadian or Chinese Gold mining company with operations located exclusively in Canada or China with assets and growth the same/similar to TVI, would trade at much higher multiples and valuations, IMO... in other words, if TVI had it's entire operations located exclusively in Canada or China instead of the Philippines, and was generating all the exact same revenues & expenses, the company would be valued at much higher levels than present IMO... and a quick look at the Price-to-Sales Ratio on a good selection of Precious Metals companys seems to prove my observation...

... you can see through a broad measurement of Price-to-Sales Ratio's in the Gold industry that it averages approx. 12.14 ... the Price-to-Sales Ratio of TVI right now is under 2 (based upon 12 months forward sales of monthly Q3-2006 revenue)... in my opinion, TVI's low Price-to-Sales Ratio is likely the result of 2 different discounting factors;
       (#1) nearly all of TVI's revenue is generated in the higher risk country of the Philippines.
       (#2) TVI not being able prove any tangible success in their pursuit of their own Chinese mining efforts (excluding TVI's Chinese Drilling subsidiary company). Permitting risk for any foreign mining company trying to operate in China is very high... often resulting in lengthy permitting delays.

In conclusion, I believe that until TVI starts proving some serious/tangible success in diversifying it's own mining business outside of the Philippines and into China, I believe TVI will continue to under-perform the sector in relation to the industry average Price-to-Sales Ratio valuation... that being said, TVI is generating strong revenue growth from it's Philippine operations, and TVI may still outperform many mining companies (particularly compared to average mining exploration co's without secure revenue streams) solely due to TVI's internal growth multipliers.

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