Why did I know that the share price would not take off after recent announcements? - ANSWER: 40 years experience in investing in the share market and much of it in resources sector projects. There is no hype and hope attached to LPI and the Maricunga project. It involves the traditional long-term development cycle (measured in many years) and this does not entice many small and large investors during the earlier stages of the development cycle because of the opportunty cost of holding the stock for a considerable period of time. Also, as indicated in another post, the wind has gone out of the lithium market sails for the time being.
Most of the LPI announcements over the last couple of years have been great. A two plus million tonne resource @ 1160mg/l Li is dynamite - with potential for it to triple in size. A pre-tax project NPV near US$1.3 billion is nothing short of sensational. LPI/MSB working closely with the Chilean Government on developing the Maricunga salar. Production of first class project development documents in the form of the PEA, EIA and DFS. Not a bad start for a resource development in my books. I dont give a hoot about what the market thinks about LPI now, I will give greater consideration to what the market thinks when the project is financed - that is when the rubber hits the road. And with LPI having $20 million in the kitty why should I worry? We dont need to raise cash.
Martin Holland's reason for selling his fully-paids is his business - he could be investing that money in something else with a shorter term investment horizon. He is still an avid supporter of the company and the Maricunga project and still holds a swag of LPI options. AND we now have two highly respected institutions on the register as a result of his sale. Its not the first time a former executive of a company has cashed in their free equity and invested it elsewhere.
LPI acquired its position in Maricunga after LPI listed on the ASX - after initially investigating prospects in Argentina. They made the right decision is buying into it and its mainly because of the quality and experience of the LPI management and technical teams that the project has advanced as well as it has.
The reasons for my enthusiasm for the company and the Maricunga project are and will continue to be:
- The quality and potential of the Mariunga lithium deposit
- The quality of the Maricunga project including the resource and supporting infrastructure - it is a rare tier 1 project
- The quality of the LPI/MSB project team
- The medium to long term outlook for lithium demand
- Chile's global standing as a resources investment jurisdiction - the best in South America
- LPI/MSB's strengthening relationship with the Chilean Government and other stakeholders
- The potential of the WA assets.
What's not to like? The future is looking good.
A key reason why I dont post much on HC including LPI anymore is that I am sick and tired of the same people whinging about the same things over and over. If you have invested early in a resource development you need to sit back and wait for a long time to see it it succeeds and get your reward. I am willing to do that with LPI.
