tg world taken over

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 T?n?r? 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.