CALGARY, ALBERTA--(Marketwire - Aug. 9, 2007) - TVI Pacific Inc.
(TSX:TVI) announced today that its consolidated financial statements for
the years ended December 31, 2006 and 2005, and its interim
consolidated financial statements for the first quarter of 2007 require
restatement due to non-cash errors made in consolidating the accounts of
its foreign affiliated companies.
During the course of preparing its consolidated financial statements
for the second quarter of 2007, the Company noted possible errors in
the calculation of amortization, depreciation and accretion expense,
resulting in an understatement of amortization, depreciation and
accretion expense from January 1, 2005 until March 31, 2007, and that
the Company's foreign currency translation account included certain
amounts that should have been allocated to capital assets or to net
income or both. Management promptly reported these issues to the
Company's independent auditors and Audit Committee.
The Company's Board of Directors met on August 8, 2007 to discuss
these issues with the Company's recently-appointed Chief Financial
Officer and the Company's independent auditors.
The Board of Directors has determined that a restatement of the
Company's financial statements is required. Accordingly, investors
should not rely on the financial information contained in the Company's
annual report for the years ended December 31, 2006 and 2005 and the
Company's interim report for the quarter ended March 31, 2007 or any
other financial information previously furnished by the Company
regarding such periods.
The adjustments are subject to completion of the Company's analysis
under the supervision of the Company's Audit Committee and Board of
Directors as well as continuing review and audit by the Company's
independent auditors.
The Company intends to review and assess the potential impact these
adjustments will have on the Company's balance sheets, statements of
earnings, and statements of cash flows as well as the impact that any
other adjustments related to the Company's examination may have on its
previously reported financial statements. Until the Company's review is
complete, the effect on previously reported financial statements cannot
be finally determined. It is possible that further adjustments, which
may be material, will be required for the above-noted periods.
At this time, the Company has not identified any fraud or misconduct
on behalf of any of its employees, management, officers or directors.
All of the known errors giving rise to the restatement are non-cash
errors that do not affect the Company's reported working capital
position. In light of the errors noted, the Company plans to make
changes to its financial reporting procedures and internal controls,
particularly with regard to the complex accounting standards related to
consolidation and foreign currency translation of results reported by
affiliated companies.
The Company does not anticipate being in a position to file its
second quarter financial statements on or before August 14, 2007, but
anticipates reporting the restated financial information by the end of
August. The Company intends to apply to the applicable securities
commissions for a management cease trade order with respect to its
anticipated failure to file its June 30, 2007 financial statements on
August 14, 2007.
About TVI Pacific Inc. (TSX:TVI)
TVI Pacific Inc. is a publicly traded Canadian mining company
focused on exploring for and producing precious and base metals within
district scale systems in Asia.
In the Philippines, TVI's most advanced project, the Canatuan Mine
(the first foreign-invested, new, mining project in the Philippines
since the passage of the Philippine Mining Act of 1995), began mining
and milling operations in mid-2004, producing gold and silver dore
through its affiliate TVI Resource Development (Phils.) Ltd. ("TVIRD").
In 2006, TVIRD received a completed NI 43-101 feasibility study on the
Canatuan Sulphide project prepared by Norwest Corporation. The report
has been filed with certain securities regulatory authorities in Canada
and is available through the SEDAR website at www.sedar.com.
The Norwest study addresses the copper-zinc bearing massive sulphide
zone, or lower portion of the Canatuan Deposit. Construction of the
Sulphide Project at Canatuan is now underway. In addition, TVIRD holds a
2.5% NSR on the Philippine-based Rapu Rapu project operated by
Lafayette Mining Ltd. Exploration in the Philippines is being conducted
at Canatuan, in an effort to expand TVIRD's mineral resource base and to
find new deposits, at Balabag and at other areas which management of
TVI view as compelling exploration properties.
In China, TVI's wholly-owned Chinese subsidiary, Hunan Pacific
Geological Exploration Inc. ("HPGEI"), was the first foreign mining
company to be granted both WOFE status and a Qualified Explorer License.
The exploration program in China is focused primarily within the Golden
Triangle area, a prospective metallogenic region in China's
south-western provinces of Yunnan, Guizhou and Guangxi Autonomous
Region, and prospective areas in the Tibet Autonomous Region. HPGEI has
2,394 km2 of land under application in China in the Golden Triangle and
in the Tibet A.R.
TVI also has a Drilling Segment consisting of Exploration Drilling
Corporation ("EDCO"), a wholly-owned subsidiary of TVI Pacific Inc.
based in the Philippines, and Hunan Pacific Drilling ("HPD"), a segment
of HPGEI based in China, which generates revenue from contract drilling.
Certain information set out in this News Release constitutes
forward-looking information. Forward-looking statements are often, but
not always, identified by the use of words such as "seek", "anticipate",
"plan", "continue", "estimate", "expect", "may", "will", "intend",
"could", "might", "should", "believe" and similar expressions.
Forward-looking statements are based upon the opinions and expectations
of management of the Company, as at the effective date of such
statements and, in certain cases, information provided or disseminated
by third parties. Although the Company believes that the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions, and that information obtained from third party sources is
reliable, it can give no assurance that those expectations will prove to
have been correct. Forward-looking statements are subject to certain
risks and uncertainties (known and unknown) that could cause actual
outcomes to differ materially from those anticipated or implied by such
forward-looking statements. These factors include, but are not limited
to, such things as the volatility of prices for precious metals and base
metals, commodity supply and demand, fluctuations in currency and
interest rates, inherent risks associated with the exploration and
development of mining properties, ultimate recoverability of mineral
reserves, timing, results and costs of exploration and development
activities, availability of financial resources or third-party
financing, new laws (domestic or foreign), changes in administrative
practices and changes in exploration plans or budgets. Accordingly,
readers should not place undue reliance upon the forward-looking
statements contained in this News Release and such forward-looking
statements should not be interpreted or regarded as guarantees of future
outcomes. The forward-looking statements of the Company contained in
this News Release are expressly qualified, in their entirety, by this
cautionary statement. Various risks to which the Company is exposed in
the conduct of its business (including exploration activities) are
described in detail in the Company's Annual Information Form for the
year ended December 31, 2006, which was filed on SEDAR on March 29, 2007
and is available under the Company's profile at www.SEDAR.com.
Subject to applicable securities laws, the Company does not undertake
any obligation to publicly revise the forward-looking statements
included in this News Release to reflect subsequent events or
circumstances.
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.