Completely agree that speculation is out of control given the length of time we've been in this situation and the lack of clear information.
Regarding two of the points you raised:
- Other companies in Mali are facing similar challenges with 2/5 issues raised. The lack of communication and uncertainty regarding mining codes and permit approvals isn't unique to Leo Lithium. This is evident by statements made on recent investor calls by other companies operating in Mali.
- I think it's foolish for any company to believe they can be friends with their respective Government (irrespestive of their jurisdiction). In this case (assuming it's FFX-related), most market participants agreed over a year ago that FFX's actions wouldn't be well-received by the government (didn't pass the 'pub test'), and there would be retaliation against Leo Lithium at some point (though the timing was misjudged). Your comment "I think it naive for anyone to think that if these issues are resolved that we will all be the best of friends & Mali will continue to play by the rules" doesn't reflect that factor, which I believe is an important consideration. Call me naive, but I do believe once this is resolved (assuming there is clarity on all 5 issues), Government relations will no longer be seen as a significant risk for the company. Other institutional investors share a similar sentitment.
Unfortunately, we have to wait and see the outcome. From what
@fooca, others, and I have heard directly from the company, all of the points you raised are a key focus in their current discussions.
Following that logic, I believe a more productive use of everyone's time would be to engage in discussions about logically sound scenario analysis. This is more of a general comment directed at others, not yourself, as I truly value what you share on these forums, along with others.
Along those lines, and returning to your original statement (assuming it's related to FFX as to what institutional investors are inferring and the key issues are resolved as management has communicated is their priority for these negotiations), what other material risks would shareholders realistically face moving forward?
Again, from my perspective, assuming the company resumes trading with full transparency, any potential risks will likely be broader market/regional factors, not company-specific issues that caused the current situation. I don't believe (or frankly hope) ASIC/ASX will allow the company to resume trading without resolving all key matters that pose a risk to shareholders. By that point, with production on the horizon and a cost-competitive profile, this project will be materially de-risked and well on its way to becoming a profitable entity, unlike many others in this challenging economic environment.
While some investors will exit due to the recent events, once the share price stabilizes, savvy, opportunistic investors will likely see this as an attractive buying opportunity at a discounted price, especially if the market cap dips as low as you predict.
Transcript
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"[Overrated or underrated] Leo Lithium?
Thomas Woolrych
: Tier 1 geology in a difficult jurisdiction. Some of the hairs on that project came from management at Firefinch (FFX) pushing the Morilla gold project and now it looks like
Leo is stuck with the environmental liabilities from a gold project that is not even theirs
.
Travis Ricciardo
: You got some capital tied up there in the fund. Take Leo's last traded sale price. Would you sell it for 100 cents on the dollar for the last trade price? Would you sell it for 50 cents on the dollar of the last traded sales price?
Thomas Woolrych:
I think if you asked me two weeks ago, I think I would just said get my capital out at all costs. I would have sold it for 50 cents on the dollar. But
with the rebound and the underlying Beta of the lithium prices coming back, I probably would be buying more because it is a tier 1 asset
.
"
(20min delay)