Error in financial statements sends TVI down

TVI Pacific (TVI-T) says investors shouldnt rely on its financial information from 2005, 2006 or the first quarter of 2007.

Paul Moon, a spokesman for the company says an error in the companys spreadsheet formula resulted in an understatement of amortization, depreciation and accretion expenses.

While the errors are limited to non-cash segments of the spreadsheet and dont effect previously stated cash flows or working capital, they do likely mean that net income had been overstated.

Also its foreign currency translation account had certain amounts that should have been allocated to capital assets or to net income or both which will also detract from net income.

TVI says it will investigate the impact adjustments will have on its balance sheets, statements of earnings, and statements of cash flows.

The company says that, at this point, no fraud or misconduct on behalf of any of its employees, management, officers or directors is suspected.

In light of the mistakes, the company says it will make changes to its financial reporting procedures and internal controls.

Especially, it said in a release, with regard to the complex accounting standards related to consolidation and foreign currency translation of results reported by affiliated companies.

Second quarter financial statements now wont be ready until after the August 14 deadline, while restated financial information should come by the end of August, the company says.

TVI’s most advanced project is the Canatuan gold and silver mine in the Philippines, which went into production in 2004. It also has interests in China and Tibet.

In Toronto on Aug. 9 the Calgary-based companys shares were off 20% or 3 to 12 on 5.7 million shares traded.