TORONTO, May 31 /CNW Telbec/ - VVC EXPLORATION CORPORATION (VVC: TSX-V) (V7S: FSE / BBSE) ("VVC" or the "Company") reports that it has been delayed in filing its annual financial statements and its annual management discussion & analysis related thereto for the year ended January 31, 2007 by the required filing date under applicable Canadian securities laws, namely May 31, 2007. The delay is attributable to the difficulty of the Company's auditors carrying out an audit of the Company's Joint Venture ("CJV") in Tong Guan, China, after the decision was made to withdraw from the CJV. This decision was taken due to declining production and revenues, increasing cost, lack of cooperation with our joint venture partners, fierce local competition for new production and exploration properties, unjustifiable high audit fees, accounting and supervision cost in light of low gross revenues. The Company decided to proceed with the dissolution, after it had completely evaluated its obligations to the CJV and concluded that it was no longer feasible for financial and business reasons to continue its relationship with the CJV. Our Chinese partners were not pleased with our decision and expected the Company to continue to fund further cash advances. Relationship with our Chinese partners thus deteriorated and it became difficult for Company personnel to visit the Chinese location. After months of fierce negotiations by our Beijing lawyer, a Plan of Dissolution was mutually agreed upon and submitted to the local authorities for approval and implementation. The Company decided to completely write-off the CJV, because of the difficulty at this time of establishing the amount that could be recovered. In light of the difficulty of access, the pending dissolution and the write-down, management believed that an audit of the CJV should not be required. In fact, the Chinese party did not consent to the audit until just recently. However, there is no guarantee that they will co-operate with the auditors and/or make the relevant documents and information available to the auditors.
The Company is working with its auditors and its Chinese partners to complete the audit of the CJV in order to incorporate the relevant information in the Company's financial statements as soon as possible. The Company cannot at this time anticipate when it will be in a position to file its annual financial statements and related annual filings as this is dependent on completing the CJV audit. The Company intends to satisfy the requirements of the "alternate information guidelines" described in CSA Staff Notice 57-603 (the "Policy"), including issuing default status reports every two weeks if there are further delays.
As a result of this delay, the Company will be asking the Ontario Securities Commission, the British Columbia Securities Commission, the Alberta Securities Commission and the Autorite des Marches Financiers to put in place a management cease trade order (the "MCTO") covering all persons who are directors, officers or insiders of the Company or who have been directors, officers or insiders of the Company during the period that the financial statements are being prepared. Pursuant to the Policy, if the Company's annual financial statements and related annual filings are not filed by July 30, 2007, one or all of the Ontario Securities Commission, the British Columbia Securities Commission, the Alberta Securities Commission or the Autorite des Marches Financiers may impose an issuer cease trade order against the Company. The Company does not believe that it will be affected by this aspect of the Policy because it anticipates that it will be in a position to file its annual financial statements and related annual filings long before July 30, 2007. The MCTO will remain in place until two full business days following receipt by the commissions of all filings that the Company is required to make pursuant to applicable Canadian securities laws.
About VVC:
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VVC Exploration Corporation is a Canadian exploration company with projects in Canada. VVC also has an indirect participation in the Beaver Brook Antimony Mine in Newfoundland, Canada. VVC is also aggressively searching for other projects such as Gold, Base metal, Uranium and Antimony at various stages of development. Visit our website at www.vvcexploration.com.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this news release.
On Behalf of the board of Directors
(Signed)
Michel J. Lafrance, Secretary-Treasurer