RE: The Results
Why dig this history?
At that time, Nickel is only few dollars per lb, and few people can see the potential of it. The project was known to have great value, but with low nickel price, it is extremely risky. A mining company wants to minimize its risks, and it can do so by focusing on its main projects. As LBE projects were not developed, I can understand Inco dropped them. They made the right and logical decision in that context.
I invested in LBE 4 years ago, and it was considered as a wild card investment. The resource number given was so small and price of Nickel was low, LBE is really risky. People were crazy about gold and silver only, and few cared about base metals.
Furthermore, on record, LBE reserve and resources reported had been low before, if you look at those old numbers, you would not invest in LBE frankly.
So, I asked Gary,
"LBE will mine out in few months using your projected production rate, so what is the future of LBE (thinking of selling)?", he said "No, no way. Where do you get the numbers from?". I said "I got the numbers from your own presentation on the website. I simply divide the reported reserve or resources by the stated production rate"........... hmmmmm, got him at bulls eye. Finally, he said "we will have more ore than you thought" or something like that.
This conversation took place about 2 years ago. The rest is just history.
LBE took off from $0.2 to $4 in 2 years after Gary assumed the leadership. He has done a great job, A+. Another 5 to 20 fold from the current price is possible in the next 4 to 5 or more years. Obviously this is completely crazy estimate (do your DD!), but Gary already did it once from $0.2 to $4.50, about 22 fold.
If you think LBE luck out because it had great properties. No, some other companies have even better properties (some started with millions oz of gold in resources at the beginning), but they simply collapsed after poor management. 90+% of those wild care investments returned negative, some with 100% loss, most returned -70% during one of the greatest bull market in gold and base metal from 2001 to now. It is not they have poor properties or bad metal price, the management is simply incompetent.
Gary, please repeat your performance!
What is the lesson learned? When you invested in junior resource companies, go with experienced management. Even if the companies had problems, the management will correct them. If properties no good, they will pick another one. If you invest in properties only, the incompetent management will screw you big time after spending millions of your hard earned money. When you see a junior resource company spending big salary on the management, issue numerous shares or options, missing permits, hide information, telling you everything is good but still need to drop some rosy projects for reasons not known (lie), not returning phone calls, keep on raising money like there is no tomorrow, selling shares at the open market, shouting at shareholders (one damned company did it to me, and their stock now? dropped 80% and still dropping)...
Sell your stock and go away before they lose 80% of your money. Be careful, sometimes the management can send you Christmas cards, books, pens, reports, or articles, but in the end, they can manage to lose 80% of value. Just remember these are the most expensive pens, cards, or books you ever bought because they are paid for by your own money.