Lost Colony is based on the true (depending on what "truth" you subscribe to) mystery surrounding the disappearance of the Roanoke colony. As the story goes, settlers landed on the island in 1587, started a colony, and promptly vanished, never to be heard from again. The only thing found there was the word "Croatoan" carved into a tree. This was the name of a nearby island that was home to a friendly tribe of Native Americans; however, no investigation took place and the fate of the colony was never uncovered.
This movie uses this tale as a launching point. It launches into complete fiction and attempts to explain one possible version of what happened. It builds a plot in a way that would make it suitable for the Sci-Fi Channel, meaning it is not terribly realistic and does not attempt to be.
Lost Colony opens with soldiers being chased by apparitions through the forest. One soldier is caught and killed while another locks himself in a room and promptly hangs himself. The time jumps ahead and a new group of English settlers have arrived, discover the dead and decayed soldier, and begin to wonder just what happened.
The biggest offense this movie makes is that it is dreadfully boring. There is a lot of talking, people walking, people arguing, and more talking. Occasionally a nightmare vision or a ghostly apparition killing someone breaks up the boredom. It is all very dull.