The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
It says that some of their drill holes are as deep as 1800m to 2000m. The earn-in with Tertiary is for a minimum of 2000m over 2 holes so I would assume that if they hit copper at depth they will continue drilling until it runs out. That could be 2 very big holes. Imagine what that would do to the share price and m/cap.
I'm very surprised that this hasn't kicked off by now. So many boxes are ticked: Helium exploration is huge on the AIM market, with HE1 the most traded and chatted about share on the index; they are operating in the USA, where they are drilling into a proven basin; very reasonable drill costs; experienced management who are happy to face the camera and answer questions; hugely over-subscribed IPO placing; small m/cap, etc etc.
Even Microsalt (SALT), who recently listed with a m/cap of £18.5M and an IPO placing of £3.1M and a share price of 43p (and a not-very exciting product), nearly doubled within the first 4 days and 3-bagged to £1.20p within the first 3 weeks.
This hasn't really started to move as yet which is a bit strange.
I think that one of the best of this whole host of podcasts was the one on the first day with both Bo Sears and Dave Minchin. I have included the link below.
https://www.youtube.com/watch?v=WPBVtIHacJM
The reason I find this interesting is because they go into the figures a lot more, both for drilling and testing as well as some early ideas of how they could take a commercial discovery into production. It becomes quickly apparent that operating in the US is going to work out considerably cheaper than operating in Tanzania. It is hard to believe that so far Helium One has raised a total of £42.9M for just drilling costs and Noble Energy are not far behind with yet another discounted placing today. For a poor third-world country, Tanzania is proving to be an extremely expensive place to operate.
Anyway, drill costs in Montana are quoted as being around $2.5M (just over £2M) with a very good availability of rig choice. Coming from Dave Minchin that sounds extra special as he had more than his share of troubles over rigs in Tanzania.
More interesting though is the early and 'subject to making a commercial discovery' planned route to production. The best fast option is to build a Pressure Swing Absorption Plant, which is projected to cost between $12.5M and $15M. I seem to remember Dave Minchin proposing a similar plan for HE1 a year or so ago, though I am sure that the cost in Tanzania was projected to be about $50M, which seems to reflect the difference in costs between the US and Tanzania.
According to the podcast, such a plant could produce 55,000 mcf of compressed helium per annum, to sell at $550 per mcf with a $50 per mcf Opex cost. This will give a cash flow of around $25M before royalties and taxes and could be ready for first production by the end of 2025.
Dave Minchin adds that because of the rapid payback and high margin post appraisal, there would be various options for funding the plant (apart from an equity raise) which would include debt, leasing or pre-selling the helium. Of course, looking at the over-demand of the IPO placing raising the equity might not be much of a problem anyway.
(I can't believe that HE1 has raised £42.9M so far - that is almost the whole m/cap.)
Just got a call back from IG. They have now corrected the error. I have done a dummy trade and Stamp Duty is no longer being added to the buy price. They've said they will have to wait for the trades to settle before the refunds can be applied back on to all of the accounts affected. Cheers.
The main difference here is that HEX are talking about production from the off. They are quite confident that they will hit the Helium as this is a producing basin. With HE1 it was all about making a discovery and even that took several years.
For anyone here who has bought these shares on IG, I have spent the best part of the last 2 hours trying to get through to anyone who is working in the London office to query why they are adding Stamp Duty charges to these buys. I have now spoken to someone who has looked into this and who agrees that this has been set up incorrectly and hopefully the stamp duty charges will soon be refunded and not applied to new buy trades.
ATB
The problem with IG these days is that all of the staff are based in some far-off foreign land and even though they are very pleasant, helpful and well-trained they still cannot address any problems in the way they sometimes need addressing. I get a lot of calls go through to South Africa, some to India and my latest one this morning to Krakow.
Of course, I requested that they put me through to someone in the London office but despite waiting for another 10 minutes no one was available. I have been promised a call back from someone in London - I can only live in hope.
I'll repeat some of one of my posts from yesterday:
"The IPO seems to be reasonably priced, considering they are drill-ready including the funding. HE1 IPO'd at 2.84p with 497M shares for a m/cap of £14.2M. HEX IPO's at 10p with 122M shares for a m/cap of £12.2M. On checking I see that HE1's share price rose very quickly after listing despite being little known at the time and was over 8p within the first week of trading for a m/cap peak of over £40M. It then stayed in the 7p/8p range for 4 or 5 months until they started drilling."
Also in the run-up to drilling, as HE1 secured a rig and mobilised it to the site, the share price rose sharply from the 7p/8p range to settle around 20p for a m/cap of over £100M. Oh, and that share price/m/cap included that HE1 did a £10M placing at 10p a share despite raising £6M at the IPO. Somehow I can't see that happening here with the large availability of rigs and the cheaper hire rates.
ATB
Great. Tradeable on IG at last so I did 2 early transactions only to be charged Stamp Duty on both. This share is clearly listed on the AIM market with no stamp duty chargeable and besides the trade I did yesterday on H/L was not charged stamp duty. Now on top of the 36 minutes I spent on the phone to IG yesterday trying to get this share listed on their platform, I have had another 14 minutes today trying to get the stamp duty charge refunded - though so far to no avail as they claim it was not charged even though I can see the deduction on my account.
Yes, I can see that it is listed on IG now, though it still isn't on Interactive, though this isn't a problem as I use IG most of the time these days. Funnily enough I see that IG has got the complete chart for the day, even though it wasn't on there until late.
I actually phoned IG 3 times today to ask them to get this listed. It was very painful as they didn't have a clue what I was on about. I was asked to repeat the name of the company and the ticker numerous times. They were going to email me as soon as they got it sorted but obviously forgot.
This should start to move upwards as soon as it is available on all of the brokers.
These are not yet trading on IG Markets or on Interactive Investor. Someone posted earlier that they are not listed on A J Bell either. I got some on H/L though I did not have much in the way of funds in that account. Can anyone confirm if any of the other brokers ie. Barclays, Halifax, etc have this listed yet.
"The drilling of an appraisal well to approximately 8,000 feet (2,500 metres) is estimated to cost approximately US$1,160,000."
Wow. That sounds very sensible. Even MSMN are quoting up to AUD5.5M - £2.85M - for their farm-out drill in Australia.
I've called IG 3 times to try and get this IPO listed on their platform but to no avail so far. Not to worry though as I have got some with H/L - just the dealing fees are a bit higher. Hopefully when all the brokers get the share listed the demand will pick up - and with it the share price. See below.
The IPO seems to be reasonably priced, considering they are drill-ready including the funding. HE1 IPO'd at 2.84p with 497M shares for a m/cap of £14.2M. HEX IPO's at 10p with 122M shares for a m/cap of £12.2M. On checking I see that HE1's share price rose very quickly after listing despite being little known at the time and was over 8p within the first week of trading for a m/cap peak of over £40M. It then stayed in the 7p/8p range for 4 or 5 months until they started drilling.
HEX appear to have a very experienced CEO in Bo Spears which will certainly be a bonus.