Lithium market darling Patriot Battery Metals has hit back at a short-seller report claiming the company had overhyped its Canadian deposit and played up takeover speculation, saying a forthcoming initial resource statement would back up its claims.
Patriot was the target of a short report by Night Market Research late last week, with the report arguing Patriot had “over-touted” the much-delayed initial resource at its Corvette lithium project in Canada’s James Bay region, and had helped spread rumours it was the subject of likely takeover offers from multiple parties – including Chris Ellison’s Mineral Resources, and fellow Australian lithium major Pilbara Minerals.
Patriot said late on Monday it expected to put an estimate on the size of Corvette within a few weeks, and it was expected to be “a large-scale and high-grade lithium deposit when benchmarked against other hard rock lithium projects globally”. But rumours of takeover talks with Pilbara Minerals were not accurate, Patriot said.
“The company can confirm that it has not received any takeover or corporate proposals to date,” the company said on Monday.
Mineral Resources is believed to have taken a strategic stake of less than 5 per cent of the company earlier this year.
Patriot did not deny it had held similar talks with Pilbara over the potential acquisition of a strategic stake.
“Patriot has received strong inbound interest in relation to Corvette from a range of tier 1 global mining and chemicals companies,” the company said.
“Patriot has appointed a range of advisers and key personnel to support the continued development and financing of Corvette as an independent lithium company.
“Consequently, management’s focus is on advancing a maiden resource, accelerating exploration drilling, progressing permitting and advancing environmental and study work, whilst considering its funding options in parallel,” the company added.
Trading the shares of the Canadian lithium explorer on the Australian market was halted early on Monday, after the ASX asked Patriot to respond to the Night Market report, which shaved almost 7 per cent from the value of its Canadian-listed stock on Friday.
The short seller accused Patriot of participating in “periodic buyout rumours” to boost its stock, and argued the multiple delays in releasing its first resource on Corvette – seven times, according to Night Watch – suggested it would fall well below market estimations.
“With the highly anticipated resource estimate approaching, we think Patriot is near a speculative peak,” the report said.
“Afterwards attention will likely shift to relatively prosaic matters like costs, permitting, softening lithium prices, the wall of unexercised CAD75c warrants, and the financing of a capital-intensive project that has in large part led to the bankruptcy or restructuring of other once promising miners.
“We think the stock is at risk of a painful correction.”
Patriot said on Monday it had sought legal advice on the short report, and said it had not been given the opportunity to respond to the allegations it contained before the report’s release.
Patriot’s Australian-listed Chess Depositary Interests last traded at $1.635.
NICK EVANS RESOURCE WRITER
