simple valuation, page-2

PART II

I have always believed in Peter Bond as an entrepreneur because he never does anything for a quick short term gain. NEVER. He has the patience to wait things out because he believes he has what it takes to make Linc into a huge corporation.

Now Reading between announcements over the past 2-3 weeks.

1 - It will take between 2-3 Years to build a commercial Plant. - I think this is perfectly fine - it gives enough time for Oil to go upwards of $100 a barrel. Enough to Linc to further refine their Technology. Enough to the world to come and look at other tentaments of Linc. Enough to the investors to accumulate slowly.

2 - It will cost a Billion Dollars to make this plant - no worries mate - we will be able to fund it now.

3 - The plant will be 20,000 barrel plant i.e. 20,000 Barrels a DAY.

Simple Maths here - at an average selling price of $100 a barrel it will be 2 Million Dollars a day.

4 - Cost of production will be $28 a barrel, that leaves over $70+ per barrel.

Simple maths again - thats 1.4 Million Dollars profit a day which equates to approx 500 Million Dollars a Year.

That on an investment of $1 Billion + some coal which is not mineable = AWEEESOMMEEE ROI.

5 - Linc is seeking partners - Some people dont like this - I personally LOVE it. It reduces the risk, but more importantly we only have about enough money to build 1 plant and Peter Bond has picked up a lot of tentaments at practically peanuts - so we will need a good partner who can help us establish these Billion Dollar plants all over once we have finalized the technology.

This will be a HUGE first movers advantage.

Till about 3 weeks back Linc would have had to work hard to find partners. Now partners will have to work hard to please Peter Bond. I read this quote not so long back "its a good position to be in".

6 - The bidders for Emerald are aggressive - After one sale done successfully - other potential buyers would know that FIRB, etc etc wont be a problem and this is a great quality asset up for sale by a company which has done a deal before - all things align perfectly well. I for one am happy for Peter Bond to hold till he gets a price he perceives as good value. He has already mentioned a higher Upfront and lower royalty. This is the same asset which was valued at $1.5 Billion on the high and $500 million - average i'd say 750 Million would be great (but ill let Peter Bond decide).

Bottomline - if you read books about entrepreneurs or if you are one - then you will see a reflection of Peter Bond and understand why this stock is so undervalued today that it is a joke - like always most retail investors will probably sell off early and the majority of the money will be made by funds.