Fierce fight to audit VVC Chinese project

When you Google VVC Exploration, (VVC-V) the slogan Your ticket to China still comes up, but the company hasnt been spending time in China the way it used to.

After pulling out of its sole Chinese joint venture with Tong Guan Glory Mining earlier this year, VVCs remaining projects include grassroots exploration in Northern Ontario and an 18% interest in the Beaver Brook antimony mine in Newfoundland.

VVC announced today that it wouldnt be filing its 2006 audited financial statements on time because its having trouble auditing its former gold project in Tong Guan, China.

The company dissolved the agreement because of declining production and revenues, increasing cost, lack of cooperation with the joint venture partners, fierce local competition for new properties, and unjustifiably high audit fees, accounting and supervision cost in light of low gross revenues.

VVCs Chinese partners were upset and the relationship between the two companies deteriorated, making it difficult for VVC employees to visit the project site.

According to VVC, it took months of fierce negotiations before the local authorities approved and implemented the dissolution plan to end the joint venture.

Now VVCs auditors are waiting to receive necessary documents from Tong Guan Glory Mining so they can complete the audit.

VVC says the project is a complete write-off for because it has been too difficult to determine what or how much can be recovered. The amount VVC has invested in the project is unknown.

The company expects to have filed its annual financial statements by the end of July, after which time the securities commissions in Ontario, Quebec, British Columbia and Alberta will be able to impose an issuer cease trade order against the company.

VVC shares fell about 11% in Toronto today or 3 to 25 on a volume of 156,000.

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