PolyMet Mining Corp. (NYSE:PLM) Reversed Sharply After the Spike

[[tagnumber 0]] [[tagnumber 1]] [[tagnumber 2]]PolyMet Mining Corp. (NYSE:PLM) share price and trading volume exploded in the last two sessions as the company finally released an update on its copper–nickel–project in Minnesota. Yet, PLM still looks far away from going into production and its financial condition was rather disastrous at the end of the first quarter.[[tagnumber 1]] [[tagnumber 2]][[tagnumber 5]][[tagnumber 1]] [[tagnumber 2]]On Tuesday, PLM pulled back 7% and lost more than half of the value gained in the preceding two sessions, closing at $1.20 for a share on a total trading volume of nearly 700,000 traded shares. Such chart pattern indicates PLM has been heavily shorted last week, while this week the share price should stay volatile and possibly drop further towards the bottom of the trading range.[[tagnumber 1]] [[tagnumber 2]]PLM press release from earlier this week claimed a preliminary final Environmental Impact Statement for the company‘s copper–nickel project were released and undergoing review. The company considers that a major milestone in the development of the mine, yet it is not certain if it will get all the permits as the final EIS should be released in three months.[[tagnumber 1]] [[tagnumber 2]] [[tagnumber 1]] [[tagnumber 2]]Being still far away from generating any revenues, PLM looks unlikely to get attractive for investors any soon for other reasons as well. Its latest quarter report shows a huge working capital gap of $48 million that cannot be covered at this point. Moreover, it hides significant dilution risks.[[tagnumber 1]] [[tagnumber 2]] [[tagnumber 16]][[tagnumber 1]] [[tagnumber 2]]Among the short–term liabilities is convertible debt in the amount of $33.84 million which is only part of a financing agreement with Glencore AG who also already owns 28.5% of PLM shares. The company says concerning that debt that it expects the term to get extended, however, if not it will be converted into shares of common stock, bringing Glencore ownership to 33.4% on a fully diluted basis.[[tagnumber 1]] [[tagnumber 2]] [[tagnumber 1]] [[tagnumber 2]]The extension of the debt is very likely to raise Glencore‘s potential stake even more, and moreover the debt is secured by all of PLM assets.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]]