Weekly Wrap Up: Sunday, August 2, 2026

Some weeks the market listens, and some weeks it does not. Two reports landed on Wednesday, both aimed at miners, and neither stock traded so much as a cent below where it had closed the day before. Pelican Way Research went after a rare earth developer whose flagship asset once sold out of bankruptcy for about the price of a used car, and whose headline magnet claim, the research says, is roughly five times anything ever published. Spruce Point worked through China Gold International's auditors, its board and its books, and found a controlling shareholder that has quietly become almost the entire customer list. Both stocks finished higher, one of them sharply. Shortfinder's paid report on Arvinas, which arrived Friday, was the week's exception, dropping nearly 5% intraday before recovering into the close. That gap between the quality of the work and the reaction to it is the whole subject of our mining piece this week, which went through 35 short reports on the sector to see how these bets actually age. The first day is rarely the verdict.

• Pelican Way Research targeted REalloys Inc. (ALOY) alleging the rare earth developer is a promotion resting on a mine sold out of bankruptcy for $20,024 and a magnet performance claim roughly five times the published global record. Stock closed the week up 19.8%.

• Spruce Point Management targeted China Gold International Resources Corp. Ltd. (CGG.TO) alleging governance failures, conflicted auditors and a related-party structure in which the 40% controlling shareholder now accounts for 99.6% of revenue. Stock closed the week up 1.9%.

• Shortfinder published a paid report on Arvinas, Inc. (ARVN) titled "It Won the Approval, Then Handed Over the Drug." Stock closed the week down 3.3%.

New from Activ8 This Week

Digging for Truth: Activist Short Selling and the Mining Sector A mine is a hole in the ground with a liar on top, the old line goes. We went through 35 short reports on 28 mining companies to find out how often that holds up, why the sector keeps drawing investigators from Bre-X's salted cores to today's rare earth promotions, and why the market's most famous bear is now buying the thing he built a career doubting.

New Activist Reports

Stock Price Impact

REalloys never traded below its prior close. The stock had finished the previous session at $7.33, and its intraday low on the report date was $7.38, still 0.7% above that mark, meaning the report did not produce a single moment of weakness during the session. Shares closed the day at $7.49, up 2.2%, and then kept climbing, ending the week at $8.78 for a gain of 19.8%. That is close to a complete rejection of the thesis in the short term, and it is worth noting what the report itself says about timing: Pelican Way identifies no dated catalyst, pointing instead to an estimated $400 million-plus capital requirement and the absence of any completed feasibility study as pressures that must eventually force a repricing. Nothing in that framing depends on the market agreeing this week.

About REalloys Inc.

REalloys describes itself as an integrated "mine-to-magnet" rare earth company, aiming to deliver North America's first fully domestic supply of rare earth metals at greater than 99% purity along with the high-performance neodymium iron boron magnets made from them. Its primary asset is the Hoidas Lake rare earth deposit in Saskatchewan. The company reached public markets in an unusual way, going public on February 24, 2026 through a reverse merger with Blackbox Stocks, a day-trading fintech that sold algorithm-powered trade alerts. REalloys has not completed a preliminary economic assessment, a pre-feasibility study or a full feasibility study, and its own SK-1300 technical report confirms no mineral reserves. Its only substantive contract to date is a $1.7 million Department of Defense award made to a subsidiary. The company is led by CEO Leonard "Lipi" Sternheim and trades on the NASDAQ at a valuation of roughly $700 million.

Key Points from the Report

• The flagship technology claim is roughly five times the published global record. REalloys touted a SmFe12 theoretical energy product of 70 MGOe as superior to industry-standard NdFeB magnets. Pelican Way Research found the published global record for bulk sintered SmFe12 magnets is 14.2 MGOe, and cites a second study confirming that bulk SmFe12-based magnets have never been achieved despite three decades of research. An expert with roughly 30 years in the field told the researchers: "absolutely not, SmFe will not replace NdFeB. There is not enough sm."

• The primary asset sold for $20,024 out of bankruptcy in 2015. According to Pelican Way, the Hoidas Lake mine has been described as two to five years from production for approximately 20 years under successive owners. Prior owner Great Western Minerals Group went bankrupt in 2015 without ever completing a final feasibility study, and Mont Strategies acquired the mine out of that bankruptcy for $20,024, a price the report says reflects a determination of near-zero fair value.

• The report alleges the CEO concealed a pump-and-dump and Ponzi-linked history. Pelican Way reports that CEO Leonard "Lipi" Sternheim was ordered to repay approximately $1.53 million received through a commodity pool fraud a court described as operating "akin to a Ponzi scheme," and previously served as CEO of Mustang Alliances, which the Wall Street Journal called a "pump-and-dump scheme" in 2015 and whose SEC registration was revoked in 2019. The report states both episodes are omitted from his LinkedIn profile, his REalloys biography, and every REalloys SEC filing reviewed.

• A major shareholder is tied to alleged racketeering. Pelican Way alleges that Arie Rabinowitz, managing member of Five Narrow Lane LP, previously ran LH Financial through Alpha Capital Anstalt, a vehicle named in the SEC's 2018 Barry Honig pump-and-dump complaint. Citing investigative reporting on his sworn trial testimony in U.S. v. Ware, the report says Rabinowitz admitted participating in the affairs of those entities through what a reporter characterized as "a pattern of racketeering activities." Securities associated with his Five Narrow Lane entity carry average all-time returns of -64.9%, according to the report.

Read the Full Report Summary →

Stock Price Impact

China Gold International followed a similar pattern to the week's other mining target, though on a much smaller scale. The stock closed at $30.37 the session before the report, and its intraday low on the report date was $30.80, 1.4% above that level, so it too spent the entire day in positive territory. It closed the session at $31.39, up 3.4%. The gain did not fully hold: shares gave back part of it over the following two days and finished the week at $30.96, up 1.9% from where they started. The pullback from the report-day close is the only sign in the price action that the market gave the allegations any weight at all, and it is a modest one against a report that estimates 50% to 75% downside.

About China Gold International Resources Corp. Ltd.

China Gold International Resources is a Vancouver-based mining company listed on both the TSX and the Hong Kong exchange. It was incorporated in 2000 as Pacific Minerals, renamed Jinshan Gold Mines, and took its current name in 2010. The company operates two mines, both in China: the ChangShan Hao open-pit gold mine in Inner Mongolia, and the Jiama copper-polymetallic mine in the Tibet Autonomous Region, which also produces gold, silver, zinc and molybdenum. Its defining relationship is with China National Gold Group, a Chinese state-owned enterprise that owns 40% of the company. That relationship runs in both directions: China National Gold is simultaneously the controlling shareholder, the near-exclusive customer, and a major provider of construction, stripping and mining services to the company it controls.

Key Points from the Report

• Revenue concentration in the controlling shareholder has gone from partial to near-total. Spruce Point Management documents sales to China National Gold rising from 43.3% of total revenue in 2019 to 99.6% in the first quarter of 2026, effectively making the 40% shareholder the company's sole customer. The report characterizes the concentration as alarming given that the same entity is also a related-party service provider and is currently in multi-jurisdiction litigation with US$125 million in frozen assets, including 34 million company shares.

• Two former CEO and Chairmen were convicted or expelled. According to Spruce Point, Sun Zhaoxue, who sat on the board from 2008 until February 2014, was sentenced by a Chinese court in December 2016 to 16 years in prison for graft and corruption, with the court finding he and his wife accepted 38.8 million yuan of illegal property between 2005 and 2014. Junhu Tong, CEO and Chairman from October 2022 to August 2024, was later expelled from China's ruling Communist Party for abusing his power and illegally accepting "huge amounts of property," with his case transferred for criminal prosecution. The report notes the company's press release on his resignation stated there were "no matters relating to his resignation that need to be brought to the attention of the Company's shareholders."

• Deloitte resigned and the replacement auditors face disciplinary actions. The report states Deloitte stepped down "on its own initiative" effective June 26, 2025 after 15 years. BDO Limited Hong Kong was appointed for Hong Kong reporting, and Spruce Point notes its engagement partner received a public reprimand and fine from the AFRC in August 2025 for multiple breaches of auditing standards on an unrelated audit, while a December 2025 PCAOB inspection found deficiencies in 100% of BDO Limited audits reviewed.

• A related-party disclosure implies an off-market exchange rate. Spruce Point identifies a discrepancy between the 2025 Annual Report, which discloses US$139.1 million paid to China National Gold for construction, stripping and mining services, and the June 2026 Information Circular, which reports 1,606 million RMB for the same line item. That pairing implies an exchange rate of 11.54 against a prevailing market rate of roughly 7.1. The report notes other line items in the same period reconcile at 7.12 to 7.21, making this one a standalone anomaly it characterizes as a "potential reporting discrepancy."

Read the Full Report Summary →

Stock Price Impact

Arvinas was the one target this week that moved the way a short report is supposed to make a stock move. The report landed on Friday, the last session of the week, so its report-date figures and its end-of-week figures are the same day. Shares had closed at $8.30 on Thursday. They fell to an intraday low of $7.89, down 4.9%, before recovering some ground into the close and finishing at $8.03, down 3.3%. That intraday range is a real reaction rather than noise, and it came on a report whose contents are not public, which means the market was responding to the fact of a paid Shortfinder report on Arvinas rather than to any argument it could read.

Shortfinder published a paid report on Arvinas titled "It Won the Approval, Then Handed Over the Drug." The report's findings are available to Shortfinder subscribers (subscribe here).

Read the Full Report Summary →

Activ8 Newswire

Muddy Waters is charging clients for security - Carson Block's firm, which manages more than $500 million, is adding a fee of up to 0.1% to cover rising security costs, with the firm's principals chipping in as well, a sign of what publishing fraud research now costs in an industry where the number of activist short sellers has fallen more than 30% since 2020. Source: Business Insider

Short sellers move in on the critical minerals rally - Short positions have risen this year against US Antimony, American Resources and MP Materials on the view that Washington's billions cannot break China's grip quickly enough to justify the rally, with Grizzly Research's Siegfried Eggert saying some stocks were bid up by "rhetoric" and lack "enough economic substance to sustain these stock prices, to put it very politely." Source: Financial Times

A 67% drawdown, and short sellers get the blame - After Leopold Aschenbrenner's leveraged AI portfolio lost roughly 67% in July and margin calls forced emergency asset sales, his investor letter reportedly blamed short sellers for accelerating the collapse and compared it to a bank run, a framing Quoth the Raven takes apart on the grounds that leverage creates far more forced selling than shorts ever could. Source: Quoth the Raven