Noble Metals are pointing the finger at their own ex-managing director after an audit revealed more than $3.3 million could not be accounted for.

The junior explorer (ASX:NMM) first noticed the discrepancies in March, putting it down to difficulties with their latest acquisition. But an audit has suggested otherwise.

“On further investigation into the accounts of the US [subsidiary] GPS Metals Lab, it has become apparent that up to $2.5 million USD has been [allegedly] misappropriated from GPS Metals Lab by Mr Palomino, the former Managing Director of the Company,” the company told shareholders on Thursday.

“The directors are treating this event extremely seriously and are now looking at all options to this situation.”

The boss in question, Miguel Palomino, resigned in October citing health and personal reasons after serving in the role for 18 months since May 2016.

Described at the time as an “experienced veteran entrepreneur” Mr Palomina was brought in as a steward of the company to lead it to production of smelting products in eastern Colombia.

Unverified transactions

In November, directors told the market the audit process had identified several unverified transactions which could create a substantial liability for the company — ultimately the reason behind an ongoing, six-month suspension from trade.

When the audit began, they recognised their inability to lodge their half-yearly report and as such, has been in a halt since March 16.

Shares last traded at 11.5c.

Acquisition of GPS Metals Group in June last year was supposed to turn the company’s operation around – providing a complementary smelting business to its existing gold and precious metal mines.

Alleged misappropriation of funds isn’t the first hiccup for the business. In August 2016 the company successfully completed year-long negotiations with a local Colombian rebel group.

In its last annual report, Noble told shareholders it was committed to Colombia and persistence was “beginning to pay off”.

Stockhead has contacted Noble Metals for comment.

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