Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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Matd had 3 PSC contracts in blocks IV, V and XX.
Extensive 2D, 3D and use of other exploration techniques led Matd to release an RNS declaring that they estimated between 9 billion and 25 billion barrels of oil in blocks IV and V which led to the rise from 3p to 38p.
The then CEO entered into a death spiral finance agreement for drilling which destroyed the share price.
Step in Mike Buck who did two quick raises to finance drilling on block IV (Snow Leopard and another one I can’t remember, which were unsuccessful). We have since relinquished our interest in block IV.
He then turned his attention to block XX (Heron) and found light oil which flowed freely at a rate of over 800bpd. Initially estimated at a recoverable amount of 25 million barrels. NPV10 at this time was declared at $150m when oil was priced at $60 per barrel.
Updated estimates on recoverable oil at Heron is 60 million barrels which at current price of between $80-$100 per barrel provides an NPV 10 of between $480m and $600m.
COVID restrictions has played a major factor in advancing the company forward in that most of the expertise in drilling has been sourced from China and it is only in the last couple of days that covid restrictions have been eased.
Matd still has PSC contract obligations to fulfil in block V, hence the plan to drill Velociraptor in 2023. Should this be successful, then I would imagine the application and approval of the exploitation licence would be much more streamlined, after the problems Matd encountered on Heron.
The irony is that there are no local restrictions in Block V due to the fantastic local work carried out by Matd and there should be no identifiable barriers to exploitation on block V should oil be found.
It appears Petro China’s lack of environmental responsibility has badly hindered Matd’s progress in extraction of oil from Heron but hopefully that should be resolved soon with Ministerial approval.
We are in a good position, having $6 million available with additional financial support from Petrovis should we need it in bringing Heron into production and drilling Velociraptor.
All the equipment is in place at Heron and most of it is in place at Velociraptor. With covid restrictions easing and the likelihood of local access being granted soon then 2023 should see the re-rate we have been expecting.
Good luck fellow yaks, hopefully we have turned a corner and the only way is up.
Excellent post D1nger
Well done mate, great post as always D1nger.. :)
Really looking forward to 2023.
Should be a great year for all that are invested here.
Raptor is a game changer for me.
GLA
Great summary D1nger and should help cut through the disinformation being actively propagated by some (Lambo222 take note).
Just to add, I'd advise everyone to refer to Mike Buck's presentation on the 7th Dec, as well as previous presentations/updates detailing the strategy to develop Heron. That should enable everyone to independently check the validity of posts & posters.
On to investment specifics - the company are "comfortably funded", with most of the drilling costs / equipment procurement having already been covered.
The company still have £6M in cash and as previous presentations have clearly stated, production revenue & offtake elements will play a large part in Heron field development beyond Heron 1.
That organic growth will be fast tracked through the DQE involvement, with whome Petro Matad are in advanced stage talks. I expect the deal is done and will be signed on the Special Designation issyance from the Ministry of Mines.
Mike Buck, who is in rmcomms with MRPAM, the Ministry and the Mining Minister, expects that "any day now".
The company are in advanced stage talks with potential partners in the Renewables space, for which Newsflow can be expected shortly. Apparently Mongolua has a massive potential through wind farm energy generation, with Petro Matad providing in country expertise to facilitate operational development.
We then have the massive Velociraptor potential, with a working hydrocarbon system having already been established within the basin.
All permitting & equipment for that covered and in place for operational commencement in Q1 2023.
It's clear that Petro Matad are very well positioned, well funded and with a clear and rapid growth strategy.
They're at the key stage of making the fundamental transition from a pure play Explorer to a revenue generating PRODUCER /EXPLORER and within a highly favourable macro economic environment if high energy price / demand.
The previous price moves have been rapid, as we saw with the move from 3p to 33p being referenced, as well as the EL issuance move from 3p to 9p.
We're now much more advanced, well funded and with a major expansion strategy underpinned by near term production & strategic partners in the wings (albeit they're not essential to that strategy).
I fully expect the price to move rapidly into the 20p-50p range within Q1 2023 (perhaps sooner on the Special Designation RNS) and will be purchasing more stock today for my own holding.
Everyone should make their own investment decisions based on their own INDEPENDENT research.
However, I suspect many that sold yesterday will be disappointed with the price progression expected here and based on sokidcfu fundamentals/historic price patterns.
Regards
Thanks for the contributions, much appreciated. ATB
We need to remember that a fund raised was expected after the Exploitation Licence, limiting upside and we didnt have Velociraptor in the mix.
Neither had we been approached by DQE, with a view to accelerate scaling up of Heron and hence magnitude of production revenues.
We have all that now and hence a MUCH better situation than at the time of the EL issuance.
Also, a significantly higher oil price.
Have a good weekend all. This week was just the start and I expect next week will be a very good one indeed for holders, as we start progressing along a new upward trend.
The LP is the catalyst for PM - with all that's already in place or close to being in place then the LP should be a snowball effect. Matad have never been in this position. Who knows what the SP will be when the LP is granted.
Xmas comes early guys.
Finally/ hopefully it would be our time this time. With LP in the way history is repeating itself with super multiple bags.
Have a lovely weekend guys,