The recent Metanor shorting activity is reproduced below, from TSX data:-

Short Positions on 2010/08/15 397,457 31,304

Aug. 18, 2010 (Market News Publishing) --

METANOR RESOURCES INC ("MTO-V;MEAOF-0")

- Short Positions on 2010/08/15 397,457 31,304

Net Total Last Total PriceDate Change Shorted Price Volume Range----------------------------------------------------------------------------

2010/08/15 31,304 397,457 0.48* 2,737,398 0.48 - 0.54

2010/07/31 -367,619 366,153 0.55* 2,599,235 0.54 - 0.61

2010/07/15 335,551 733,772 0.60 2,935,403 0.57 - 0.62

2010/06/30 39,716 398,221 0.62 1,901,463 0.59 - 0.63

2010/06/15 -9,100 358,505 0.58 2,459,330 0.57 - 0.64

2010/05/31 -169,627 367,605 0.60 6,391,948 0.55 - 0.65

2010/05/15 197,376 537,232 0.66* 3,060,359 0.56 - 0.67

2010/04/30 -40,749 339,856 0.58 5,238,780 0.55 - 0.66* - Indicates that the closing price used is the last non-zeroclosing price and is not the closing price on the report date.

Source: TSX

In summary, the following appears to have taken place:-

1. When the shares were $0.66, on May 15, a 197k short was placed and this triggered a fall in the share price to $0.60 then, on 31 May, 169k of the short was covered.
2. On 15 July, an even larger short of 335k shares was placed and this precipitated a further fall to $0.55 by 31 July. At this date, 367k of the shorts were covered.
3. Again, on 15 August, another smaller short of 31k shares was placed, which then left the share price at $0.48.

Clearly, some orchestrated shorting is being organised, with the effect that weak hands are abandoning the ship and allowing the shorts to cover, whilst relentlessly driving the share price down. Also, there appears to be a “hard core” level of about 340k of shorts which are not being cleared. These could be illegal naked shorts, which would have a depressive effect of the Metanor share price (Jim Puplava of Financial Sense has championed the cause of eliminating naked shorts, due to the share dilution and manipulation arising).

This activity bears the hallmarks of a potential bidder, who is trying to establish a position from panicked sellers and also to depress the share price in order to achieve a low entry level for a full bid. It has been suggested that no bid would be made unless a 43-101 was lodged at SEDAR. This is logical since, even a low premium bidder would need to justify this action to their own shareholders. Also, in the absence of a 43-101, a low hostile bid, which may be in process, could be rejected by the sudden release of a favourable 43-101.

If this scenario were to be developing, then directors may be in a dilemma. If they attempt to stem the shorter’s recent action, of depressing the share price from $0.66 to $0.48, by way of a release of the 43-101, with only 2009 drill results available, then a low bid may be delivered and they would be out of ammunition. What to do therefore? ……. If directors were aware of this, then their action by delaying a 43-101 would also be buying time, possibly to deny oxygen to a potentially hostile suitor and to give themselves time in order to promote a friendly more beneficial competing suitor, if that were the only alternative. Also, the delay could be used in order to deliver additional 2010 drill results to Geostat, for inclusion in an updated 43-101, for release when directors consider that the time is right, for the benefit of the general body of shareholders. However, the delay requires careful consideration as continued drilling activity needs funds, which may be difficult to raise, after the recent PP has been spent.

All long holders of Metanor should therefore be perceptive to the possible reasons and tactical advantages of a 43-101 delay, rather than submit to demands of the short term trader(s), who are preying on weak shareholders, to the potential detriment of long term shareholders.

It appears that the 15 August 2010 short was much reduced from the previous two mid month shorts highlighted and therefore there may be a perception by the shorts, that it is becoming too risky to short at these levels at this time.

Raffles