Mantengu: share rigging
SUSPICION: DOWNWARDS OVER 7 MONTHS
Share price has lost 85% of its value since June 2023 through what may be campaign of market abuse.
Mantengu Mining has issued a public warning that it believes its shares have been manipulated downwards over more than seven months in a calculated campaign to devalue the company and disrupt its growth plans.
The shares traded above 200c in June 2023, before commencing a sustained drop to 42c, where it traded last week.
Ironically, the shares bounced to 55c when the public warning was issued.
Mantengu has “reason to believe that a group of individuals have been involved in the manipulation of the company’s share price and consequently, has reported the matter to the JSE and the Financial Sector Conduct Authority (FSCA) for investigation”, said the statement.
CEO Mike Miller said the company alerted the JSE to its suspicions. The JSE responded that it was premature to issue a Sens notice. The company decided in the interests of transparency to issue a public warning anyway.
Miller would not be drawn on the identity of the suspects involved, other than that the information is in the hands of the JSE and FSCA. Miller said the FSCA has found a prima facie case for further investigation.
“As to why these people would want to manipulate our share price down, our speculation is that they want to undermine our growth strategy,” Miller said.
Mantengu’s sole operational asset is Langpan, a chrome and platinum group metal plant in Limpopo.
Mining finance ‘disruptor’
The mining investment firm reverse-listed onto the JSE by way of a R15 million rights offer in November 2022, followed by a roughly 10:1 share consolidation in March last year.
The first of two proposed chrome processing plants was commissioned in May last year, with a second plant due to come on stream in April.
The company was valued by the JSE at R857 million at the time of the reverse listing, but its market cap has since fallen below R80 million. This is despite a R200 million injection of assets into Langpan last year.
The shares now trade at 55c, exactly a 10th of its 550c net asset value – making it an absolute steal should the alleged conspirators be planning a takeover. This would be difficult, but not impossible, given a free float of about 50% in the shares.
The company secured a R500 million shares and warrants-for-cash facility from GEM Global Yield, according to a Sens announcement in January this year.
Miller said this gives the company access to capital to pursue its next phase of growth. Mantengu set out to disrupt traditional mining finance, which can take years to complete due diligence and other preliminary investment steps.
“We are able to act much quicker than other mining investment groups because of the way we have structured our balance sheet and our operations,” said Miller.
Suspicious trades
He added that suspicious trades were first brought to the company’s attention in June last year, but it lacked sufficient visibility into the share register to determine the extent of the irregular trades.
According to Mantengu: “The board has identified multiple trading anomalies arising from the Strate BND [beneficiary download] reports characterised by transactions executed at levels resulting in losses, defying logical financial rationale and logic.
“Notably, the costs associated with brokerage and administrative fees for many of these trades significantly surpass the sale proceeds, rendering them economically unjustifiable,” it added.
Moneyweb asked the JSE for comment but has not received a reply yet.