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Hi Little Giddings
I have grafted all my life, being autistic has enabled me to great academic achievements.
Early years spent working on the beer wagons, tough and relentless were essential tools to
reclaim assets from pubs with unpaid bills. I have 500,000 shares in HE1 for our retirement, this
will either, enable us to get out of our humdrum life’s or carry-on as before. I have a informed chance of success, so please, stop exacerbating the negatives and let me relish the possibility
of a better life, before the **** hits the fans or shares rocketsto unbelievable heights.
t
Good post littlegiddings
I do get more comfortable with the risk the longer I hold, so enjoyed your post, a good reminder..
There are some tactics to reduce the risk, all speculative, and need self control.
You can assess the likelihood of price movements up to drilling when the truth will be known..
If you think the price will double from your entry point you could buy 2x your desired holding.
Then sell 1/2 pre-drill
Of course the price may not reach 2x but you can still reduce your holding and risks.
That was, maybe is, my possible intention, but the risk to reward...
fr4nky
Although they're looking for a gas, this is classified as a mining share. The 20% figure isn't mine - I'm no mining specialist - but that of other people much more qualified than me. It's a sad fact that relatively few new exploratory mining wells find commercial quantities of what they're looking for.
The posters here are doing an excellent job of putting forward the case for investment, and there's little they're saying I'd take issue with. But you did say you were relatively new to this game, and had only bought a few stocks so far. Try to keep the basics in mind: there have been thousands of exciting new stocks (each in its way different from, or safer or more exciting than) all the others in the history of investment: most have failed. Some, of course, have performed wonderfully, as this one, hopefully, will.
Human nature being what it is, people tend to grasp the good bits, don't assimilate the negatives or allow them to fade a little in their consciousness. Unconscious bias, in modern parlance). It might be useful to use the latest postings about what the new Tanzanian president has said, (which I believe was responsible for this week's share price spike), as an example. Looks very good, doesn't it? Yet I remember vividly, when John Magafuli came to power, everyone extolled his virtues of anglophilia, sophistication, intelligence and goodness knows what else, and how he would transform the wonderful country of Tanzania (often still referred to then by Brits as Tanganyika) for the better. What actually happened is typical of similar stories throughout the African diaspora.
I'm a holder here, but only as a small proportion of my portfolios., and I can afford to lose my stake. I've posted enough on this subject now; the very best of luck with your investments - and remember to keep your head well below cloud level.
fr4nky
Although they're looking for a gas, this is classified as a mining share. The 20% figure isn't mine - I'm no mining specialist - but that of other people much more qualified than me. It's a sad fact that relatively few new exploratory mining wells find commercial quantities of what they're looking for.
The posters here are doing an excellent job of putting forward the case for investment, and there's little they're saying I'd take issue with. But you did say you were relatively new to this game, and had only bought a few stocks so far. Try to keep the basics in mind: there have been thousands of exciting new stocks (each in its way different from, or safer or more exciting than) all the others in the history of investment: most have failed. Some, of course, have performed wonderfully, as this one, hopefully, will.
Human nature being what it is, people tend to grasp the good bits, don't assimilate the negatives or allow them to fade a little in their consciousness. Unconscious bias, in modern parlance). It might be useful to use the latest postings about what the new Tanzanian president has said, (which I believe was responsible for this week's share price spike), as an example. Looks very good, doesn't it? Yet I remember vividly, when John Magafuli came to power, everyone extolled his virtues of anglophilia, sophistication, intelligence and goodness knows what else, and how he would transform the wonderful country of Tanzania (often still referred to then by Brits as Tanganyika) for the better. What actually happened is typical of similar stories throughout the African diaspora.
I'm a holder here, but only as a small proportion of my portfolios., and I can afford to lose my stake. I've posted enough on this subject now; the very best of luck with your investments - and remember to keep your head well below cloud level.
Prae This would look nice in your prospectus but deepbluediver owns the copyrights.
CoS - very simple term mathematically (and many ways to do it, for example, weighted vs unweighted) but can be misleading and confusing. An exploration CoS takes into account the probability of several terms for example, probability of Source, of Migration, of Trap, of Containment (sometimes you can also see Reservoir term but lets leave it out for simplicity).
Lets use an example, say we give each term a 70% probability - none of the terms can be 100% at exploration phase, 70% is pretty good. So, that's 70% probability each on "Source", "Migration", "Trap" and "Containment". In the most simplest math (no weighting), the overall CoS in aggregate is 0.241. (70% x 70% x 70% x 70%). So the aggregate can be low even though each term on its own is 70%. To bring the aggregate CoS down to ~0.2, all you need is to have two terms at 0.65 (65%), rest at 70% PoS if you consider only 4 parameters. In general cases where 5 parameters are considered instead of 4, then each parameter will need higher value (>0.7 or >70% probability) to bring the aggregate down to 0.2 (20%)
Cons:
Unable to trap and seal the helium
Unable to find production levels of helium, maybe because of really low purity
Potential government instability due to a new president?
Insurgencies and terrorist attacks disrupting production or halting it completely
I would say only the 4th point is a real potential issue, but this hasn't happened in Tanzania yet recently just across the border in Mozambique but I would like to think the Tanzanian government and army will want to protect valuable locations of interest. Even if that did happen, production may halt for a month or two and the SP will take a dip but production would just commence again eventually and HE1 could always hire security
There may be more cons but they're just some I could think of off the top of my head. I hope this helps new people here looking at HE1.
But a few interesting links to check out:
Comparing HE1 to competitors:
https://twitter.com/Belcourtoi/status/1374309150944071682/photo/1
Hannam and Partners report on HE1, these are the guys who expect an SP of £1.04 if these test drills go well in May:
https://mcusercontent.com/110d0aa5f5d9bf9478796664e/files/58194820-d910-4c75-b085-a151b97344ee/Helium_One_Initiation_note_Final_14_Dec_2020_RB2.pdf?utm_source=H%26P+Master+Contact+List+%28Sements+and+Tags%29&utm_campaign=78f95cbff0-EMAIL_CAMPAIGN_2019_05_20_02_05_COPY_01&utm_medium=email&utm_term=0_dd4f91613c-78f95cbff0-371771967
Very interesting report by HE1 themselves:
http://www.helium-one.com/wp-content/uploads/2021/03/21-02-26-Helium-One-Presentation_Feb21.pdf
More of a general report on helium such as pricing:
https://www.mercurycarbon.com/wp-content/uploads/2019/09/MCC-market-report-for-RHK-conference.pdf
Please also check out interviews with Helium One on the Crux Investors and Proactive
Not a problem mate. I found this that I made from a previous post which may help you and others.
This isn't a complete list but just items I can think of off the top of my head:
Pros:
Helium supply running low, America has restricted their largest helium extraction plant for federal use only which contributed heavily to global supply
HE1 has the largest helium reserve in the world, with a P50 of 138 BCF and a P10 of 521 BCF; in comparison, Blue Star Helium's P50 is 3 BCF and their P10 is 6 BCF (even their best case scenario is 5x worse than our worse case scenario, and they've seen a 1000% SP price increase) and DME's is probably not much more.
Global demand is growing at a rate of around 8-10% a year with this expected to rise considerably because of the likes of SpaceX who need helium to cleanse the fuel tanks of their reusable rockets. If Elon wants to make his dream of 1 million people on Mars come true, that's going to take an enormous amount of helium. One Starship launch will probably consume at least $12 million worth of helium (that's a number I gathered from a video linked here by Dai where they mention how much it costs for rocket launches in terms of helium). Also, bare in mind, for every passenger ship launched there'll be a supply ship launched as well.
Supply will be even more constrained as most of the helium extracted at the minute is as a by-product of oil and gas extraction which will slowly start to go offline over time.
Price of helium has jumped massively in recent years and even the high wholesale prices are no match to the end-user ($300 - $400 wholesale compared up to $1500 end-user price). So this trend may continue.
HE1's extraction will involve no release of hydrocarbons making it a more attractive investment for the modern investor
HE1 holds 100% ownership over their licences which span 4500km2, far, far more than their competitors
As Trek mentioned, the Tanzanian government are very much behind HE1 and have said that (paraphrasing) "we need a good new story, and Helium One is that good new story"
The data/evidence for helium being there, imo, is over whelming and from what how DM has talked HE1 have no concerns whatsoever about there being no helium there nor that they won't find production-levels of it.
A part of this data is the fact that helium has been found to be seeping to the surface at a concentration of around 10.4%, magnitudes more than from traditional oil and gas and higher than DME, who I believe found concentrations of 7% and 4%
The drilling contractor, Mitchell Drilling, will take payment of the 3rd drill as shares and have offered a 4th hole as shares as well and have brought in a bigger drill at no extra cost which will save HE1 $500k and 4-6 months as they can go straight to appraisal. A massive dose of confidence
Setting up production of helium is far quicker and cheaper than oil and gas and as they don't have to drill as deep, potentially less risky
Thanks Prae for the info, from what I’ve read so far and what you have said it gives me more confidence that the 20% chance mentioned, I guess time will tell as I’m not interested in selling so it’s all or nothing i suppose
The only worries at this point are whether the helium can be trapped and sealed; funding, contractor, seismic data, licences etc are all sorted (or maybe the environment permit I heard might not be? But I think they applied for it back in January so must be due soon). I think a lot of us here don't understand why it has a 20% CoS, seems incredibly low. Everything is pointing to there being a large reserve of helium there at Rukwa, even the drilling contractor has offered the 3rd drill payment as shares, an extra 4th drill as shares and are bringing in a larger drill at no extra cost meaning HE1 can go straight to appraisal saving 4-6 months and half a million dollars.
Personally, I wouldn't say this is even a risky investment; I would much rather buy in to HE1 than Tesla. Still, nothing is absolutely confirmed but when so many indicators are pointing to it going well and even the CEO who was in Tanzania, David Minchin, said that the team have no worries about not finding helium.
As for a few years, full production of helium at Rukwa and probably close to full production at the other two sites with maybe an SP of £5 - £7 maybe more. But that's just my personal bullish view, please DYOR
@littlegiddings
Thanks for your response, I really appreciate it.
I do understand what you said about the increase in risk regards to AIM shares although now you have said you see this share as a 20% chance I’d say it would be worrying.
That being said my other money which is also in an aim abs quite a lot is invested with research and confidence that it will return a good price.
My research I’ve done so far in this share seems like it will be a good investment but can you explain further why there is a good chance it will fail?
Thanks for your help.
Fr4nky
fr4anky
You'd do well by starting with investment basics, in my view. This share must be seen as a high risk punt on an AIM company. Conventional investing wisdom says that you should only invest what you know you can afford to lose.
No one can tell you where the share price will be in years to come, only where they hope it will be. It's been suggested that the chances of success here are 20%; again, no-one knows precisely, but let's run with that. Put simply, and a little crudely, it means you have an 80% chance of losing your money.
If that doesn't put you off, the 20% chance is mouthwatering. Not just because of the price of Helium (commodity prices can fluctuate alarmingly, and others are chasing after Helium deposits), but because of the very high product potential here.
I make absolutely no recommendations, just stating some investment fundamentals. Then start doing the hard research stuff.
cant see my post...
Report 9 pages, worth a read, got a 42 page version too
http://www.helium-one.com/wp-content/uploads/2021/03/21-03-17-H-P-Update.pdf?fbclid=IwAR2MJEEHJSTn7kmTpW2cScBlZES5EfsYj6XdvPpogMJJbHT3GcdC2SeLJ0M
Good afternoon all. I am relatively new to the shares game. I have had a SIPP for a few years and only started an ISA last year with just 1 company invested in (Gold and copper)
I have decided today after looking around that I would invest some more of this years ISA in Helium One.
From what I can tell so far, it's a strong buy but long hold for hopefully big returns.
Can a few of the more informed investors in Helium One explain where they see the company in the next few years etc as I know Helium is meant to rocket in value.
Thanks Fr4nky