MANTENGU Mining, a small cap chrome miner, warned shareholders its share may have been the victim of manipulation.
In an announcement to the JSE it described a series of events regarding attempted trades with two shareholders who subsequently alerted Mantengu’s board.
The company concluded one of two potential events may have occurred. Firstly, Mantengu shares may be the target of a “naked short” – a trade in which a sell order is placed on the target share that the trader doesn’t own or hasn’t borrowed.
In the second instance, the trade might have been subject to classic shorting in which traders bet on a share becoming cheaper. Mantengu said that while this activity was not illegal, it is unusual with small cap stocks.
“In the first or second instance, the purpose is to artificially erode MTU’s (Mantengu’s) share price,” it said in the announcement. “The board kindly requests shareholders to approach such transactions with caution and to report such communications directly to the board,” it added.
Shares in the company closed just over 3% lower in Johannesburg today. At 58 South African cents per share the company has a market capitalisation of R166m. It is 18% lower year-to-date but 23% higher since April 25.
Although establishing itself in chrome mining Mantengu has set about an aggressive diversification strategy. In October last year it unveiled plans to buy Blue Ridge, a platinum group metal deposit owned by Sibanye-Stillwater. While underground mining was a possibility, the asset also owns chrome deposits.
In February, it bought an iron beneficiation plant for about R18m.
