Ann: Investor Webinar, page-62

@crackpot............We might be in a bit of disagreement on this one.

Risks are still real and not to be taken lightly. It's not a shoe in and my narrative didn't mean to present it as such. Rather I prefer to say it presents a good risk/return opportunity but that is far from saying it is a "riskless" project especially being in Malawi.

In the resource space , the Lassonde curve is a very real phenomena . I have posted a graphic below of it. Your argument effectively boils down to that Lassonde curve doesn't exist. If it didn't exist, your argument that "if the market thought this was a shoe in (and it is right?) why isnt it trading at >50% fair NPV already? " would be very cogent argument and would imply something else must be pulling down the value of the stock otherwise everyone would be piling in. Put differently the market knows something "collectively" that maybe us as individual investors can't see or appreciate here.

I would counter but that the market is just pricing these sort of projects as it usually does with a very high discount for uncertainty in this phase of the curve known as the "orphan" period or sometimes also known as the Valley of Death. To me this is very much par for the course in investing in these sort of projects.

Even if the some in the market think this is a shoe in long term, even the most sophisticated investor equally knows the Lassonde curve is real thing and they don't need to be in the stock right through its transition from exploration to development. The "market" after a discovery quite purposely ignores these companies and they can go through this phase for varying periods. While the curve as a theory is often correct, its pattern or shape and duration is often different with every project. In this orphan phase the speculators exit and longer term fundamental investors don't tend to appear until production is very close and positive cashflows arrive and this attracts a more "risk averse" investor who requires much more certainty. Most of the institutional money in Oz is in the risk averse space, not the speculation space where Lindian currently sits.

Lindian isnt on its pat malone here, nearly every junior explorer come developer company goes through this . I would be absolutely shocked if Lindian was trading anywhere near 50 % of its NPV at this stage or greater. I think its under priced for sure, but I am neither surprised at the current price nor concerned the market is pricing currently where it is and I don't think it suggest anything nefarious or some sort of "negative" we cant see. I just see it as a working example yet again of the Lassonde curve in real life.

The Lassonde curve is in fact a huge opportunity for astute resource investors. If you know your projects, do your research, can handle tolerating risk and are patient, much larger returns can be made than just buying an index fund and being a passive investor but equally again your not playing with certainty especially with mining projects that can face significant delays in getting to production or struggle to even get funding. Getting funding for projects especially in Africa is a very real issue and again that's why this staged approach of Alistair's is sensible. Throw on top of that sovereign risk , specification risk on whatever it is your producing, offtake and contractual risks and this is why the Lassonde curve phenomena exists in real life and developers are often heavily discounted in this window and hence its no surprise that markets often stay very stand offish right up until basically production is almost in the bag before a lot of these companies can sometimes re-rate. A lot of institutional money in Oz simply wont touch Africa either, so I would contend the Lassone pattern is even more extreme in Africa. So anything Alistair can do to shorten our time in this orphan phase is a huge plus.

Then you will get your sophisticated hedge fund style investors who know companies in this space almost invariably follow the Lassonde curve pattern, so they know they can hop out and pursue other opportunities while the company goes through this death valley to production , then hop back int much closer to production and still make sizeable gains but without having all their capital being locked up through this entire period. Those sort of investors think in terms of opportunity cost of what my dollars could be doing today and frankly dont care how much the project might be making in say 3-5 years time. In fact you can make a cogent argument the Lassonde curve almost becomes a self fulling prophecy when most investors , especially soph investors act as if it is real.