Sharp rise in Northcliff Resource’s share price raises questions

Vancouver-based Northcliff Resources Ltd., a junior mining company looking to build a tungsten-molybdenum open pit mine near Sussex, New Brunswick, is in the news again, but not for reasons it would like.

CBC ran a story yesterday (Feb. 23) asking the Financial and Consumer Services Commission of New Brunswick if it’s investigating the company because its share price has risen over 50 per cent between December and February 10.  The Commission won’t say if it is or isn’t.

The CBC story notes that the increase might be a bit fishy because it occurred during a period when the provincial government reached an agreement with the chiefs of the Maliseet First Nations behind closed doors that would accommodate development of the company’s proposed mine – known as the Sisson project.

The deal was made public on Feb. 10.

So, what’s wrong with Northcliff’s share price going up when it did? Isn’t that a good thing?

Well, as the CBC story points out, during that eight-week period unknown investors bought Northcliff stock and drove up its prices. Did these investors buy the struggling shares because they knew a deal between the Maliseet and the Liberal government was imminent – a deal that improves the chances of the mine getting built but hadn’t been made public during the time those shares were bought?

That’s just a theory, of course. And as Brian Maude, the Commission’s senior legal counsel says, an unproven theory like that can be damaging to a publicly traded company and its employees. That’s why the Commission wouldn’t comment on whether it’s investigating Northcliff or not.

Back in 2013 when I first wrote about Northcliff’s Sisson project, the company was hoping to have it in production by 2016.

But it’s now 2017 and the project hasn’t yet received regulatory approval from the federal government.

Low prices for tungsten-molybdenum have made the mine less attractive than it was back in 2013, and First Nations support for the project has been hard to come by, which hasn’t helped.

If it turns out there is something to this theory about the reasons behind the increase in Northcliff’s share price, that will make the project’s future even more uncertain.

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