Reward Minerals asked to explain price spike

Nedlands-based potash explorer Reward Minerals has copped a speeding ticket from the ASX after its shares soared more than 56 per cent higher in the space of a week.

Reward's shares increased from a closing price of 32 cents last Tuesday to a close of 50 cents two days ago, prompting the exchange's compliance unit to seek an explanation for the price spike.

Reward responded that it had received encouraging potash brine analyses from sampling at its recently acquired tenements in Western Australia's north-west, which it said "could be an explanation" for the higher trading. 

It issued an announcement on the sampling results later that day but yesterday received further correspondence from the ASX questioning why it had not released the results earlier.

In a response to the ASX today, Reward director Michael Ruane said the release of the results had been delayed by compliance with new JORC requirements and the company had not anticipated a price spike.

"While the company believes that the analytical results obtained for 15 brine samples collected on a recent field trip and released on 10 December 2013 are encouraging it did not anticpate a significant rise in the company's share price in the event of release of the results, particularly in the current market conditions," Mr Ruane said.

"The company commenced preparation of the release immediately after the meaningful results came to hand but did not request a trading halt as it did not anticipate a significant short term rise in the company's share price even upon release of the announcement.

"Reward Minerals securities have always been very volatile as the stock is tightly held and thinly traded and any new interest has the ability to move the share price markedly on low volume."

The company's shares spiked again today, closing 15.4 per cent higher at 60 cents - an 87 per cent increase on its closing price last Tuesday.