If you’re new to investing in mining or exploration companies, the Lassonde Curve is one of the most valuable tools to help you understand how and when value is created in a mining project — and when it often isn’t. Let’s break it down step-by-step, starting with where it came from and why it matters to investors today.
The Origin of the Lassonde Curve
The Lassonde Curve was developed by Pierre Lassonde, co-founder of Franco-Nevada, the world’s first gold royalty company. Lassonde created the model to show how investor sentiment and project value change throughout a mining project’s lifecycle. His decades of experience revealed the emotional and financial highs and lows investors experience from discovery excitement to production success.
What Is the Lassonde Curve?
The Lassonde Curve is a visual roadmap of a mining project’s life cycle, showing how a property’s value typically changes from the earliest exploration stage to full production. Think of it as the emotional and economic journey of a mine — from the thrill of discovery, through the tough grind of development, to the stability of production.
The Five Key Phases of the Lassonde Curve
- Concept Phase: Acquisition of a promising property and early exploration work like mapping and sampling. High risk, high reward.
- Discovery Phase: Drilling reveals significant mineralization, driving investor excitement and share price spikes.
- Feasibility Phase: Detailed engineering and economic studies (PEAs, PFS) determine viability — enthusiasm cools as reality sets in.
- Development Phase: The company secures funding, permits, and begins Risk remains, but progress builds confidence.
- Startup & Production Phase: The mine begins producing and generating cash Focus shifts to performance and profitability.
How to Apply the Lassonde Curve as an Investor
Understanding where a company sits on the Lassonde Curve helps you identify entry points with favorable risk/reward, recognize value catalysts, and stay patient during low-interest periods.
Remember, the curve is a guide — external factors like commodity prices, regulations, and management execution all play major roles.
Final Thoughts
The Lassonde Curve helps investors visualize the rhythm of value creation in mining — the peaks of excitement, the valleys of hard work, and the rewards of production. By understanding this cycle, investors can make more confident and informed decisions in one of the world’s most cyclical industries.
