Member Info for 44RJ

MRC - with regards to drill costs my understanding (and I could be wrong) is that the drilling company, Mitchell, will bear the risk and associated additional costs pertaining to the sidetrack.
I actually added more HE1 this morning as I knew the market would panic. Essentially the RNS was positive as it confirmed further helium shows at less than half depth, so god only knows what's down there. The CEO talks about aiming to hit the "Goldilocks zone"... Perhaps he's on to something!

I understand your caution re costs and risk, but this RNS today has just confirmed my confidence in the HE1 drilling campaign!

Very annoying!

MCR - response to your text below:

"My point is that it appears that there has been no procurement process for these activities." - how do you know? Maybe there has been a competitive tender process. We simply don't know.

"It is not normal for a company of this size to spend millions on external consultants. If that is the going rate then SCIR is not viable as a company?" It is ABSOLUTELY normal for third party consultants to provide support for all transactions of this nature.

"The BOD should be very very clear with shareholders about what has been delivered by gneiss and whether it was at competitive market rates. Something stinks IMHO." I actually totally agree with you on this. The SCIR board is not as transparent as I (and I suspect all of us) would like them to be. Need to take a leaf out of a certain David Minchin's book in my view on this point. But I don't think it stinks, as you say. Just incomplete communication.

"Do you not think it stinks that they are giving work to their own companies?" Possibly, but there are synergies and cost efficiencies to be had here too. As I said before, this type of work could be undertaken by very expensive technical and legal advisers - possible on greater hourly rates and fixed fees than Gneiss! We all have absolutely no idea.

"What exactly do you expect our BOD to do? Pay the invoices that come in from gneiss then put their feet up?" No. the BoD are responsible for driving and managing the strategy. Not carrying out the minutiae of all of the various works streams. They are well within their right to farm that stuff out to third party experts, otherwise they would have to employ a very large team of professional experts on permanent contracts.

Lets give the BoD and chance to perform on the new AD project, see out the HE1 exploration campaign and take part in the Ruvuma 3D. If they perform poorly in any of the above then you will have my support to throw the book at them! Until then I feel that tiresome posts about Gneiss costs are not necessary and counter productive.

MCR, you seem to think that all consultancy fees (i.e. Gneiss' costs) should be virtually free of charge! It is absolutely normal for a company like SCIR to engage a consultancy to carry out work on their behalf such as due diligence, market assessments, feasibility reports, contractual specifications and schedules etc etc etc when providing support for M&A transactions. Why is this such a problem for you? Yes, yes, yes I know you will now give me the 3rd degree about the commercial relationship between the BoD and Gneiss, but who's to say that Gneiss don't represent good value for this work? I would suggest that if SCIR went to some of the big consultancy players then you could probably expect anything we have spent on Gniess to promptly double!

In simple terms, none of us has sight of the detailed scope of work that Gneiss has previously been engaged to do, therefore how on earth can we comment accurately on the appropriateness of the fees they charge? I suggest you stop being so critical as you simply do not have the proof to back up your allegations.

That's a shame - I was all primed to chuck in a couple of grand today as a punt.

"temporary share decrease" is not a "crash", Phantom 25...

The way David Minchin brings all the shareholders into the loop is admirable. Long may this continue! I wish my other investments were this transparent with regards to operational updates and information.

Mcr - taking over some debt as part of an acquisition is not uncommon at all. It has allowed the purchase of the asset with reduced "upfront" capex. All good in my book. The project is cash flow positive with proven empirical data, so again, all good in my book.

Also, it is absolutely normal to incur costs to administer the acquisition. Due diligence work, asset condition reporting, contract development, negotiation costs, etc etc. This work doesn't come for free. The amount for this transaction sounds perfectly reasonable to me. So again, all good in my book.

As I've said before, this is the right size transaction for SCIR at this stage, and provides a springboard for future acquisitions of similar assets. This won't make us rich overnight, but that's not the point. SCIR are attempting to build an asset base in a comfortable and controlled manner - let's see how they get on and criticize in future where appropriate, which is not right now in my view.

They started drilling on Saturday, but couldn't issue an RNS until the next trading day (Monday). I think the "yesterday" thing is a simple typo. But essentially I understand this to be day 6 of the Tai drill. I hope!

I'm happy with this. Its the right size of investment in a robust and proven technology. AD projects are small by nature but it's a repeatable model, so the new JV can "kick the tyres" with this small acquisition and build a larger portfolio gradually as funds are made available from other sources. Whilst this won't make us rich overnight, it is the basis for sustained growth in accordance with the previously announced low carbon strategy.
Thumbs up from me.

Whilst I agree with you views on the BoD's lack of communication and deliverables, I don't agree with your summary of " some shareholders who seem to have been cast as the voice of the majority..."
What I think you will find is that the shareholders in question decided to their own spare time and resources to contact the board directly for a dialogue with them. There is no barrier to you doing this yourself if you have the desire.

I think you should be thanking those shareholders for their time and their subsequent reports on this board, rather than denigrating them.

MCR - I doubt that SCIR will completely sell its stake in HE1 in the short term, because:
1) to sell all HE1 shares at this point would leave the BoD open to criticism if the HE1 share price was to explode (which absolutely could happen); and
2) the BoD did actually confirm verbally to Cperkin and Bigdouble that it would hold some for the exploration drilling programme.
Essentially I agree with this approach as I believe it is more likely to result in a health war chest for future investments. To flog the lot now would be the safe option, but would be too conservative in my view.
So I think A+ to the BoD for the HE1 strategy, but D- for the roll out of the new green energy strategy. So far this delay has been "embarrassing" - I think we are moving into "humiliating" territory now... Time to get cracking and provide us with an update.

Highlandmatt / Shouldvesold - to my knowledge I don't think SCIR had any further opportunities to subscribe to the placing, other than what was set out in the RNS at the time of the Attis RTO (i.e. our percentage holding and small amount of share options). It is uncomfortable to look at the HE1 share price now and reflect on what could have been with further investment. But for what its worth, my view is that the current BoD are playing the HE1 game correctly (sell some now for comfort, keep a few for the excitement of the drill).
They won't get any more praise from me though - they REALLY need to deliver on the new renewable energy strategy, as its now becoming a bit embarrassing. Anyone can create an artistic powerpoint for an attractive business strategy; the challenging bit is delivering it successfully. So far the current BoD has achieved nil points (french accent) on that front.

Speaking of risk, I was apoplectic with rage when Neil Ritson attempted to raise another £2.5M quid or so by dilution to bump up Solo's share of Helium One. I was absolutely behind the cause to stop him in his tracks... a level of risk too far in my view at the time.
However, looking at the situation now makes me question my judgement. HE1 has a market cap of £130M ish and it hasn't really done anything yet. Much more is hopefully to come. Did we score an own goal?

Just sayin'...

grsshaw - I generally agree with your comment:

"If it was me I would only leave the options in place and sell all the rest to bank the profit and invest in Ruvuma - after all that's what is recommend with share investing - don't be afraid to take your profits."

My preference is that SCIR should hang on to a few more shares than just the option shares (but not too many) for the HE1 exploration drilling phase. The upside is compelling and could be the catalyst for better times over here. However, no one but god himself knows how much helium there is at Rukwa and so a managed approach by SCIR to take reasonable profits pre-drill is one that I support.
Yes, David Minchin can be slightly over enthusiastic which is infectious, but caution is required. I hold HE1 too and I'm looking to de-risk after the spud as I think the project will reach fever pitch by then. I believe SCIR will do the same - selling in tranches as the story unfolds.
For my sins, I've been invested in Solo/SCIR for 10 long years now. Do I wish I had never heard of this company? Yes. But it must be said that there have been times when I could have sold for a profit, i.e. during the Horse Hill drill and the NT2 drill. Why I didn't flog any at those times is my own stupidity and greed (why oh why...). I gamely hung on after NT2 on the promise of a "back to back" drill. A bit of naivety on my part but a lot of misdirection by previous board members. However, my view is that drills equal SP spikes, hence my decision to remain in SCIR until CH1 (assuming the asset has not been sold), and my hope that SCIR hold several million shares in HE1 when the drill hits the dirt in but a few short days' time.

Good point grsshaw, but didn't the board tell cperkin and bigdouble that the strategy was to hold a decent chunk throughout the Rukwa drill(s)? If they have flogged the lot I would be very disappointed at such a short term view.
Plus, what do SCIR need cash for right now? The next big ticket item I can think of is the 3D at Ntorya due H2 this year at some point, which I believe they can already cover with existing cash reserves.

July was mentioned in the Hannam report for the first drill - presumably that means the conclusion of the first drill, not the spud?

I wonder how mrc_mrc_mrc_mrd is going to twist this excellent RNS into a cautionary and convoluted tale to warn others of the impending disaster at Rukwa? I'm sure he'll manage - his track record speaks for itself.

Thanks Mdrake

I just watched that Durham University YouTube video you posted (https://www.youtube.com/watch?v=mSRlSXVzjBE).
Very, very exciting stuff. I couldn't give two hoots about today's share price. The fact that the presenter talks at length about the potential at Rukwa is particularly interesting. It seems that no other location on the planet has the potential that Helium One has. The presenter did mention some challenges with transportation and legislation, but I assume that those fears can be allayed if the government support is there, which the new president appears to suggest.
Another take away for me is the fact that almost all of the current helium supply on the planet is derived from fossil fuel extraction, usually as a by product from the natural gas industry. Helium One's gas is completely fossil fuel free, containing just helium and nitrogen. It begs the question whether the helium produced from Rukwa should have a renewable tag associated with it, in the same way as "Green hydrogen", "Syn gas", etc. In this day and age of companies looking to distance themselves from the fossil fuel industry perhaps such organisations would welcome a premium cost to secure our product. Or enter into long term supply contracts. Who knows.

But anyway, a great presentation and a great way to educate oneself on the composition, properties, origin, sources, etc of helium. I urge you all on this chat to watch it (its pretty heavy going at times so might be worth cracking open a bottle of wine to aid comprehension). If we're going to be heavily invested into this thing, we may as well learn the basics!

Jacktrade - agreed.