OTTAWA — Northern Graphite Corp. said Monday it knows of no reason for a run on its stock that almost tripled the share price in late December.
The Ottawa-based mining company was trading for just 58 cents on Dec. 14 before the run-up took the price to $1.52 on Friday.
After its Monday assertion that it could offer no specific cause for the increase, shares fell to 98 cents in heavy trading on the Toronto Stock Exchange before recovering to $1.10 by early afternoon.
“Recent Chinese restrictions on new and existing graphite producers, positive comments by industry analysts and the year-end tax-loss selling may all have had some effect,” chief executive Gregory Bowes said in a statement.
Such swings are hardly unusual for junior resource companies, especially those in early stages. Northern Graphite was trading for as much as $3.42 in April 2012 before starting a steady slide.
The company wants to redevelop the Bissett Creek property near the Ottawa River west of Deep River. It proposes to build a $103-million open-pit mine capable of handling 2,300 tons a day and employing about 80 people.
Demand for graphite is increasing as new uses are found for the mineral, including in lithium batteries and fuel cells, and as China, the world’s largest user of graphite, guards its domestic supply.
Bowes said Northern Graphite expects to make announcements soon on construction plans and a new estimate of resources at the site.