Patriot Battery Metals Inc (ASX: PMT) shares won't be going anywhere on Monday.
That's because this lithium developer has requested a trading halt this morning.
It has requested that the trading halt remain in place until either the release of an announcement or the commencement of trade on Wednesday.
Why are Patriot Battery Metals shares in a trading halt?
There are three big reasons why Patriot Battery Metals shares are currently halted.
The first relates to the company preparing to announce the assay results from the winter 2023 drilling program at the Corvette Property in Canada.
The second reason is speculation that Pilbara Minerals Ltd (ASX: PLS) is sizing up the Canadian lithium developer. The AFR reports that the lithium giant has hired RBC Capital Markets to look at "potential offtake agreements, joint ventures and equity investment."
The third reason is that the company is preparing a response to a short seller report that was released on Friday by Night Market Research. In respect to the report, the company adds:
The Company cautions investors that the short selling report contains a number of claims that are wrong and misleading and further contain substantial factual inaccuracies.
What was in the short seller report?
Night Market Research has warned that Patriot Battery Metals could be all hype and no substance. It comments:
Patriot Battery Metals is a rare mining "unicorn" – a lithium explorer ascending to a $2bn valuation despite having acquired its core asset for $8m only 16 months ago (a 250x return) and lacking an established maiden resource. We think Patriot's rally can in part be attributed to stock promotion with marketing outlets which other supposed "Tier-1" developers would avoid. The emerging miner struck a $1.5m promotion deal with an unknown entity based in a suburban house. Its sole principal has been involved in psychedelic mushroom and cannabis nanocaps down 99% from highs.
The research firm also alleges that the company has provided misleading resource numbers and has set unrealistic production goals. It adds:
Expectations for Patriot's initial resource estimate are sky-high. CEO Blair Way touts "triple digit" figures and recently suggested Corvette exceeds Liontown's 171Mt of 1.4% Li2O. Using generous assumptions, we estimate an initial resource below 100Mt or 3.2Mt LCE, over 40% lower. We think management over-touted resource figures, leading Patriot to delay an initial MRE at least seven times (and counting). First targeted for Fall 2022, guidance is now set for late-July 2023. Patriot's lack of disclosure of industry standard data bodes poorly for results. The Company hasn't published cross sections since June 2022. CEO explains he's willing to show geologists, but investors will misinterpret. What are they hiding? Management also touts production by 2028, a stretch even under normal circumstances.
