Timothy,

Your comments are fine. Ask anything you would like. The reason why there is a huge short position has to do with the nature of Canadian junior miners and how they are financed. Most junior miners are pure exploration companies that have dim prospects to begin with. They have no way of getting money to finance their activities, so they do public stock offerings through Canadian investment banks. These investment banks secure buyers for shares in order to raise capital for the companies to use on exploration. The banks get a fee and also get shares of stock as part of the deal. Eventually the junior runs out of money and needs more, so it returns to the same Canadian investment bank. It has no other options. The Canadian investment bank then shorts the crap out of the stock, (Sometimes it does this ahead of time, in anticipation of the junior's needs) knowing that it will be able to get a lot more shares for its clients in the next stock offering along with a bunch of warrants. It sells a million shares that started at $1.00 in order to crash the price down to $.50, so it can get twice as many shares in the offering, and double its money in the process. The innocent junior explorer, run by a bunch of nice-guy geologists, has no idea that such shenanigans are even possible in the world.

This continues on until the bank's clients run out of money, then the junior goes belly up and the bankers make out just fine. The problem for the bank is when a junior really finds something. In anticipation of an impending financing, it shorts a huge bunch of shares thinking that the junior will have to come running to it for more money. However, if the junior really finds something like Kimber has, it can actually start finding other sources of financing, skipping the Canadian banks altogether, that may then be stuck in a short position involving a huge number of its shares.

News of positive drilling results can push a stock price back up to where the Canadian bank started shorting it and that bank is essentially stuck in a pickle, short a lot of paper, hoping that the stock will fall again, so it can cover its position. If good news continues to follow and the junior continues to be able to bypass the Canadian banks, as Kimber has been able to do, eventually the Canadian bank will have to panic-buy to close out its position. This could drive the stock up very quickly. Hope that helps. Bull