RE:Updated MD&A on SEDARThis line is very similar to a line from page 8 of the November 30, Short Form Prospectus on Sedar. It reads, “Upon completion of these various objectives / milestones, the Corporation will be in a better position to initiate the project financing for the construction of the mine on the Rose Property.” The milestones of course being the engineering design for the mine which according to the time table in the prospectus is expected to be complete in March 2023. To go back a few weeks before that, according to the comex website, it was on October 19 that the company received the new, and in my opinion unexpected, set of questions from comex that revisited questions asked in April 2020, and June 2019. It was also on October 19 that JSL and Haber and a couple of other insiders sold some shares at $1.55 and bought their options at $0.56. On November 4 the company halted the stock and announced the 30m capital raise. Then it was between October 31 and November 15 that the short position rose from about 20k shares to 2.9m shares. On November 29, amendments to the MD&A were published on Sedar, the only significant amendment being a new disclaimer suggesting that the hydroxide feasibility study may not happen, it reads as follows, “the engineering study is still underway and the Company is not in a position to confirm as at the date of this MD&A that a chemical plant to produce high quality lithium hydroxide monohydrate will ever be implemented or that it will form part of the Rose Property.” Then of course, during the first two weeks of December one or several anonymous shareholders dumped a ton of shares which did a real number on our SP and the rally we were enjoying prior to the whole mess. But we know all this, what we do not know is why all this happened.
My theory is that the company was totally blindsided by the new comex questions. Management had thoroughly answered the questions that extended from the hearings and rightfully thought that comex would be in a position to make its recommendation and when they saw that comex wanted to revisit questions that they hadn’t touched or discussed in a couple of years, the company got spooked and wondered what else comex may decide to question. Given that the SP was in a fairly healthy spot at the time, heading to $2.00, it was probably a good time to go to the market raise enough money to get the ball rolling, pay WSP to do whatever work they will have to do to answer the latest questions and give them some breathing room in case comex does decide to drag this along further. Then I think some opportunistic investors noticed this and built up a healthy short position knowing that the SP is likely to decline given this turn of events, and if it didn’t they could always sell a pile of shares to beat it down anyway, and then cover their short position and make a lovely profit. Frankly, I think it’s rather disgusting for comex to be dragging us all along like this, if they have questions they should ask them and not wait two years and say, hey why don’t we have a look at this.
My other theories behind the recent capital raise included a partner with a soon to be North American hydroxide converter that is only interested in our spodumene and not potential hydroxide and/or a need for cash to grease the pockets of the comex members in order to get their approval and/or a need for cash to pay the lawyers that we’ll need to sue the Quebec government. I’m joking about the last two… sort of.
That’s just my 2 cents, have a great holiday everybody, if anything we’ve got the best board on stockhouse, who knows perhaps 2022 will be our year… and maybe the Habs will rise up and win the cup too. jmho glta