That is the risk of private placements. In order to raise a significant amount of $$ in a short period of time (less than a month), the quantity of the buy commands a discount and also creates the possibility of manipulation.

There are conditions on the TSX that these shares cannot be sold for a period of 4 months. While that is true, nothing says that they cannot short stock they do not own. The system allows it.

There was a time after the PP in December 2006 whereby both Sprott and Pinetree owned 10% of Noront (about 9M shares a piece). Six months later neither was listed on corporate records as a shareholder with more than 10% which tells me they dumped. (The price fell from .75 to .50 during that time).

On the other side of the coin, Noront has raised 62M dollars from these folks, with half coming at exercise prices at $4 and $5. And that cash only servers to help the company and thus the longs into the future.

Once the games are over and cash starts to flow, the share price will start to represent that of a production company rather than a spec and thus rise.

M1.