As far as I can tell, as of last week when HNR went into...

As far as I can tell, as of last week when HNR went into suspension, there were no reported short positions in HNR so I'm not sure how short sellers will be burned even if the first proposition in your post is correct. Perhaps the fall this morning needs to be looked at in the context of falls across the market last week while HNR was suspended from trading. There was always going to be a bit of "catch-up" (catch-down?) to the overall market and the battery metals sector in particular (which suffered some pretty heavy losses last week) when trading in HNR resumed this morning. Irrespective of this morning's material announcement, there was always going to be selling pressure to bring HNR back to earth somewhat. I will probably participate in the CR and for the time being am happy to hold.
IMHO, DYOR