Great post Frank @FrankRockefield and thank you for sharing, it is greatly appreciated. There is certainly no harm in posting this type of invaluable information as it has allowed more eyes to feature on LPI, the more the better in my opinion. In essence, the more potential buyers, the more appetite for our shares. if existing holders limit the supply/sale of shares on market, then this can cause a re-rate opportunity (demand for shares outweigh supply). The simply demand vs supply equation.
One of your other top rated posts on Hot Copper a little while back actually triggered me to further research LPI and draw my own conclusion regarding whether the company was undervalued/overvalued at the time. I have been a happy holder ever since and bought more shares recently in the June/July market downturn, as it was a stellar opportunity to accumulate more in my opinion. I conservatively expect to make many multiples of my average buy in price. Although I am not a long term holder (less than 12 months), I can sense a good investment opportunity when I see it and LPI fit my criteria.
People may be wondering why LPI hasn't yet appreciated to be par/fair value with the other companies mentioned by Frank, there could be multiple historical and prospective reasons including but not limited to the following:
1) Management's ability or lack thereof to deliver the world class Maricunga Project into production 2) Constitution referendum and it's overall impact on the mining industry and the potential for irrational mining tax/royalty hikes in Chile, most of these concerns have now been alleviated due to the consensus vote of no to constitutional changes but could have been suppressing the share price the past 6-12 months due to uncertainty around future investment and what mining projects would look like in Chile moving forward. 3) Ongoing questions around funding (dilutionary) aspects of the project (How is capex potentially being paid for...debt/equity or a combination of them both and in what percentages (70/30 etc) 4) Our convoluted ownership structure with various third party owners, to me this has held us back the most from a share price appreciation standpoint and hence why management and the other owners have decided to consolidate (100%). All large private and publicly listed companies prefer a consolidated ownership structure, especially if they are looking at undertaking a buyout or taking a cornerstone equity position. The positive here is that the new structure carries less operational risk due to no trading history (Clean skin) and therefore is primed for a buy out or additional equity investment. 5) Deliberate suppression of the share price and manipulation (large institutions wanting to hold the share price down for a third party company to launch a takeover bid or for their own accumulation strategies/interests), not insinutating this is the case here but something to be aware of. 6) The market isn't efficient, mis-pricing of securities can either be shortlived or longer term. It may never reach true 'fair value' until a monetisation event occurs (buy out for example).
Looking forward to the next 6-12 months, interested to see where we land from a share price standpoint post demerger. Cheers, CP.
