Tuesday, 7 May 2013

Insider Buying Expected In Response To TSX Bulletin

Basic Shares: 68.1 million
Fully Diluted: 73.1 million

This morning The Toronto Stock Exchange issued a bulletin on its initiation of a review of Pure Nickel and its listing criteria.  Following the bulletin, Pure Nickel responded with clarification that it meets all of the listing requirements with the exception of market capitalization.

What does this really mean?  Pure Nickel is currently trading at $0.03, giving it a market cap of just over $2 million.  The exchange requires a market cap of $3 million which equates to an increase in share price needed of $0.015. 

In context of the fact that it would take very little to meet the listing requirements, we expect to see insider buying start tomorrow morning based on a discussion today with management. Insiders are in a 24 hour blackout.

The worst case scenario is that the company would apply for a listing on the TSX Venture Exchange if it doesn’t meet the TSX minimum listing requirements over the next few months.

The company is suffering from the same malaise that has swept through the junior resource sector that has seen valuations decimated. However, unlike many junior companies, Pure Nickel is sitting on cash and has a big brother partner in Japanese conglomerate ITOCHU, that continues to fund one of its projects at MAN, Alaska.