RE: ASX Short17 Feb 2026 11:26
In my experience shorting arrangements are often much more complicated than they at first appear. There will be some naked shorts who are not doing any risk management, yes, but often the short is part of a wider trading strategy, particularly for the bigger players institutions.
The example of TSX listed Aya Gold and Silver (where I am heavily invested) illustrates this well. Aya had a really big run up in SP in 2024, massively outperforming the SIL and SILJ ETF's in that period as most silver miners were still in the doldrums. The analysts / algo's noticed this outperformance, and judged that Aya had got ahead of itself and the market, so they shorted it very heavily. At one point last year total shorts on Aya equated to over 18% of issued shares!
As explained by the CEO, the organisations that were shorting Aya were going long SILJ in equal measure, betting that the rest of the silver miners would outperform Aya and they would therefore make large profits on the delta. Aya's performance in most of 2025 was poor compared to the rest of the silver miners, partly as a result of short building their position. The SP barely increased in the first 8 months of the year while other silver miners were starting to pop and in August 2025 the SP was down c.50% from it's 2024 highs despite the company starting to deliver name plate production at its Zgounder pure silver mine.
The shorts didn't need Aya to go down in price to win, they just needed it to underperform its benchmark ETF. Unfortunately for the shorts, the silver price took off in late August and people started to realise how cheap Aya was (as one of the only pure play silver miners on earth). The price started to increase and then Blue Orca posted an article accusing Aya of fraud and grossly overestimating their MRE. At the same time as this article was posted in September a massive short attack was launched. These two things spooked the market and the SP dropped over 45% in a day despite the article being complete BS. 4m of the 18m shorts covered at a price which was 40-45% lower than the day before.
Aya is still the most heavily shorted silver miner on the planet, but shorts have been steadily reducing, down to under 9m at last count. Aya has been one of the better performing silver miners in recent times, partly due to all the short covering. Anyway, thought it might be worth sharing this as it shows 1) that shorts may be part of a bigger strategy and therefore may not necessarily be forced close if the SP goes up substantially 2) the kinds of egregious tactics short sellers can use when they are feeling the pain.
For Greatland, we are outperforming our peers and have better growth prospects, so I don't think the kind of strategy above could work.
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