The Lake Resources NL (ASX: LKE) share price isn’t going anywhere today.
The ASX lithium share closed yesterday at 91 cents, losing 3.2% in Monday’s trading.
As for today, shares have been put in a trading halt at the company’s request.
Why is the Lake Resources share price frozen?
According to this morning’s ASX release, Lake Resources requested that shares be placed in a trading halt through to market open this Thursday.
Why?
The company is working on rectifying a “technical compliance issue”.
Lake Resources reported that it’s looking into whether “a cleansing prospectus should be issued or whether in the circumstances it should seek order from the Court in relation to its inadvertent failure to lodge a Cleansing Notice in relation to shares issued by the Company on or about 21 October 2021, within 5 business days of the issue of the shares”.
The ASX lithium miner said its failure to lodge the cleansing notice within the required 5-day timeframe was “due to an oversight”.
Lake Resources indicated it will still be releasing a brief explanation of the issue.
What is a cleansing notice?
For a concise definition of what cleansing notices are all about, we defer to the attorneys at HWL Ebsworth.
According to the law firm:
“The effect of a cleansing notice is to ‘cleanse’ the market with information that may not have otherwise been disclosed, or confirm that no such information exists, to create a level playing field and allow the issued securities to be traded by recipients. This means that in some circumstances early disclosure of information that is otherwise not required to be released to the market must be made.”
Lake Resources share price snapshot
The Lake Resources share price has struggled in 2022, down 17%. However, shares in the ASX lithium miner remain up 138% over the past 12 months. That compares to a full-year gain of 4% posed by the All Ordinaries Index (ASX: XAO).
The post Why is the Lake Resources (ASX:LKE) share price frozen today? appeared first on The Motley Fool Australia.
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