Andrew Forest Increase holdings, page-16

Hi Chip
“Virtually no downside” was written as opposed to “no downside”. And most people understand it’s a relative and in-spirit point. Meaning, relative to;
- timescale - next cash raise is 9 months away. So holding for 3 - 5 months pre s232 decision should provide support
- market cap. A c. 90m pound deposit that is simple and approved. At a market cap of $25m I see it difficult to fall under $15m MarketCap for any sustained period. Mgt could sell Mulga rock for twice the market cap
- spread of share price with limited down side risk potential - whilst the downside might be $10m as an example, the upside is not limited to $10m. Rather as a probability function could be several hundred million. So the risk associated with holding is rewarded, and is virtually limited
- sustainability - helpful that RCF is out. And their exposure to Wolf was unique. That event and impact to share price is known as special cause. And is a fundamental investors dream as an opportunity it’s to identify and capitalise

I appreciate if it’s short term trading based on charts etc, a comment of “virtually no downside”is not accurate. A drop from 5c to 4c is 20% and material.
That said, and from the perspective of a long term investor, and from where we are at a share price today today, it’s limited downside risk versus upside scale