Golf, I'm going to give my take in a somewhat long winded fashion....it it wasn't long winded it wouldn't be me :-)  The following is opinion only, I want to make that clear.  

We know that as of June 30th that almost 1.3 million shares were short, normal short interest as reported by stockwatch.  I operate under the assumption that this short interest, that by and large it is attributed to Market Maker Broker Dealers, which I will call MMs for short.

So MM #580 (made up) is short 200K shares.   This MM doesn't want the PPS to lift because then he'll be losing money.  So to create the impression of ample supply he shows 100 lots (10K shares) available at say $2.40 in hopes it will keep buyers away.  

But it doesn't, instead an order comes in for 10K shares at that $2.40 price so he is forced to fill the order by going short.  The problem?  When he's called on to deliver the shares 2 days later he can't locate them, there are none available to be borrowed.  

Now the TSX Buy-In facility kicks in.  The PPS at 3PM on the day the Buy-In facility reports the shares as being naked short we'll say is still $2.40 and a willing seller is found who is prepared to part with 10,000 shares at a PPS of $2.64 (10% over the $2.40 price).  

Now that naked short position is cleared, but our friendly MM is still short the 200K.