Shares in junior base metal producer HMZ Metals (HMZ-T) were off 6.5, or more than 36%, at 11.5 in late-afternoon trading in Toronto on Mar. 21, after the company said its 2005 financial results would be delayed past the Mar. 31 deadline.
The delay comes as the company tries to sort out an unauthorized $1.8-million transfer from its Chinese joint venture, Guangxi Guanghe Metals, to partner Hechi in mid-2005. An independent accounting audit and review of its Chinese operations is planned. Operational results for the Hechi copper smelter in China also need to be finalized.
The company also says it is exploring financing options as it has been “unable to withdraw funds from its Chinese joint venture company on a timely basis.” The proceeds of any financing would go toward working capital and potential new acquisitions.
HMZ is also looking for grandfather status for its Hechi copper smelter, in southeastern China’s Guangxi province, after it learned that recent legislation regarding the operation of independent copper smelters may require an upgrade in both size and technology to allow for its continued operation past yearend.
In the boardroom, HMZ’s vice-president of operations Normand Lecuyer and vice-president Sean Stokes have resigned. The company’s chief financial officer and treasurer Rene Galipeau resigned on Feb. 27.
HMZ has applied to Ontario Securities Commission for a cease-trade order on management.
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