Tuesday, April 19, 2011

China Shen Zhou Mining (SHZ) Audit Receives "Going Concern Qualification"

After an audit of its financial statements by Sherb, co's independent registered public accounting firm, China Shen Zhou Mining (AMEX:SHZ) announced it received a going concern qualification for 2010.

Per the press release:

"This announcement is required by NYSE Amex's rules and does not represent any change or amendment to the Company's financial statements or to its Form 10-K for the fiscal year ended December 31, 2010.

"Subsequent to the 2010 year end, on January 24, 2011, the Company announced the completion of a registered direct offering to several institutional investors for - $20 mln of common stock. Institutional investors were issued - 2.8 mln common shares together with warrants to purchase up to 851,066 shares of common stock which, if fully exercised for cash, would provide an additional $7.2 mln in gross proceeds to the Company. China Shen Zhou believes working capital raised in January 2011 is sufficient to maintain operations throughout 2011. Further, the Company reported in an 8-K filing in April 2011 that it entered into an equity transfer agreement for its 60% equity ownership interest in Wulatehouqi Qingshan Nonferrous Metal Development for a price of RMB 8.5 mln. Upon completion, this equity transfer agreement will partially offset the Company's debts owed to the purchaser, and reduce the Company's liabilities."

China Shen Zhou Mining was trading at $5.05, falling $0.84, or 14.26 percent, as of 12:10 PM EDT.

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