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Looking at the bid and ask at 9.45am this morning those 3 x 250k are buys.

Point taken on the nomad disclaimer though I don't entirely agree.

It should also not be forgotten that at this moment in time the Liberator West prospective resources have unknown sands, which a successful A3 will go a long way to de-risking. The thickness of the sands increase as we move West from Liberator Phase 2 East to West. Hence why Liberator West has MId Case 135mmbl STOIPP curently compared to 64mmbl STOIPP for Liberator East.

So A3 is a far bigger drill than the pilot well and the Mid Case 64mmbl STOIPP it is looking to unlock.

I accept that there is clearly more risk here now given today's news but what the above demonstrates is where the majority of the upside really sits in this 3 well programme, particularly when we consider Serenity has a "conseervative" 197mmbl STOIPP in it too.

The other key takeway from the RNS is what the company did not say.

They did not say that the Phase 1 development was under threat, which if it was would surely have been added as a disclaimer by the nomad, against the company's comment regarding ;

"These data will be used to recalibrate and update the existing seismic model such that options and plans for further operations at this location to meet the objective of locating a future development well in the south-east area of the field can be made."

The rather large red sells being dropped in from around 1pm are delayed buys.

I don't believe it is a case of reducing further but a case that the MMs have reduced the SP to hit their stop losses.

I have seen it happen before and it can mean some serious share sells are triggered by it.

At the end of the day with 2 big drills to come the current price will not be the position when the A3 drill is fast approaching, so the substantial selling points very much to forced selling as opposed to whole sale sell off because of the first well result.

Once those sells are soaked up, which at current speed is looking to be going at a fair pace, then the SP should start to reflect the risk reward and reality of what the RNS has and has not communicated.

At times like these it is important that the facts shine through be they positive or negative. many people have a lot st stake and there are many dark forces at work, who employ tried and tested insinuation that can be very damaging for those that do not have the necessary experience.

That said there is indeed risk here and investors must tread carefully and at the very least make a good effort to read the data that is available to them. The CPRs would be a good place to start.

Understood Spike501

I wouldn't be surprised if the pending very large sell(s) from iis hasn't been triggered by the sudden substantial drop in price, which may well have triggered their stop loss position. It tends to happen quite a lot on AIM, unfortunately.

Apologies misread of your statement on my part. You are correct but the level of cash in the business is more than capable of servicing the debt front end with my key point being that there is no need to raise additional funds for day to day needs.

Some may as I did misconstrue your post as indicating that the business has now cash post these drills and is unable to service its debts.

@spike501 Sorry but again that is simply not true. The finance raise came in at £40m or circa $48m.

The drill costs total $36m and BHGE agreed to push £3m of their oil services costs to first oil, which is circa $3.6m.

I3E will have corporate costs but the reality is still a long way from "net cash less than zero." With all due respect, such hard hitting view points should be checked for validity prior to be spoken.

It is important to appreciate that what I3E are attempting to do is to improve the plan associated with the original Phase 1 CPR because they now own the neighboring block. Hence their chances of delivering a much larger phase 1 STOIPP through the use of LP4, which sits within a thicker set of captain sands.

The CPR always included LP1 and so it should remain open to them. Infact the CPR actually allowed for just LP1 to be drilled and LP2 to be financed through cash flows from LP1. That's how achievable phase 1 is. So any talk of finance problems or not being able to get a development off the ground are way off the mark.

What I3E want to do is deliver LP2 and LP4 and the extent of their ability to do that will be determined by the further data analysis and the A3 result.

However, there is still a Phase 1 development to be had, whatever the outcome. What we are talking about here is level of success only not will their be success at all.

From the Phase 1 CPR (available on the company website for all to digest at their pleasure).

The original CPR planned a phase 1 development that included L1 and L2, not L2 and L4 as is currently planned.

L1 runs through the discovery well and holds the current 18mmbl STOIPP 1P reserves.

L2 is in the area where the L2 pilot was drilled as a means to optimise the location of the future producing well.

A3 and to a certain degree this L2 pilot well , will go a long way to defining and de-risking and positioning the L4 production well trajectory.

If for whatever reason L4 becomes questionable and the company feels the need to return to the L1 and L2 scenario then the CPR declares an anticipated pre-tax NPV10 of $327m, post tax $200m, which includes full capex and opex inclusive break even oil price of just $24.70 per barrel.

That NPV10 valuation is based purely on the phase 1 Mid Case 2P reserves of 38mmbl STOIPP being achieved at just 28% recovery. The 28% recovery includes no allowance for water injection, which has so successfully employed next door on Blake.

To achieve that 38mmbl STOIPP I3E either needs to establish where the upper captain sands fairway is in relation to L2 pilot well, hence the additional data being collected or, they need to establish the position of the oil in relation to the L4 well, which if present will likely deliver greater than the aforementioned 38mmbl STOIPP, given it is in a far deeper captain sands area. Achieve that and the those NPV figures are very much on and phase 1 development along side it.

The pilot well result for all of its perceived failure, should do its job in establishing the location of the captain upper sands and thus the oil that has been designated 2P reserves in this area.

Nothing is certain but what is clear is that the company has a great many options at its disposal going forward and the development is more chance of being achieved at this time than not, and that'd before we even start talking about Serenity to the north.

@Lazarus1 I disagree wholeheartedly and for reasons I have already explained such go to assumptions are what undermines lesser informed investors and their positions.

We are 1 pilot drill into a 3 well programme that has the potential to deliver up to 200mmbl of recoverable oil on a conservative basis. The finance package was set up in such a way to ensure I3E maintained their 100% stake. This then created something of a false market where the interest and value that came from said 3 well drilling programme was tempered by contributors to the finance selling in order to de-risk their positions.

The rise in the last few days has been minimal in the grand scheme of things and is to be understood given the risk reward that existed and continues to exist.

There are a great many examples of pump and dumps on AIM and with them some very unsavory activity to boot, but to simply tarnish every stock with the same brush is simply unfair and far too easy given the RNS only came out an hour ago and is at worst inconclusive.

Without the finance package in its current form, I3E would have risen far more over a far longer period, be it that we wouldn't be investing into a 100% operator but more likely 50% at best.

@MTSparky With the emphasis being on the "2P Reserves" part of that statement.

If the pilot well has come indeed come in "proximal to the main upper Captain channel fairway" as the RNS states, then the vertical seismic profile (VSP) in the well and shear wave sonic log should help nail down its actual position.

As always with these situations it is important to take a deep breath and thoroughly read and understand the RNS for both what it says and does not say.

The most important section of the RNS ;

"further well data is required in order to interpret and locate the key reservoir upper Captain channel edge. As such, preparations are being made to obtain a vertical seismic profile (VSP) in the well and to also run a shear wave sonic log"

"These data will be used to recalibrate and update the existing seismic model such that options and plans for further operations at this location to meet the objective of locating a future development well in the south-east area of the field can be made."

Nowhere does it say that the phase 1 production planned for next year will not happen. Nowhere does it say that the upper captain sands is not present in the phase 1 area. After all there has already been a discovery in the phase 1 area, which carries 18mmbl of 1P reserves STOIPP.

Yes there are questions to be answered and further security is required to understand that a substantial enough amount of oil exists in the phase 1/2 area in order to assure us all that the phase 1 finance can be secured. However, from the previous success it is clear that the oil is there and the RNS does lean towards a more minor adjustment being required to hit the upper captain sands when it says that this pilot drill is ;

"proximal to the main upper Captain channel fairway"

So all this talk of dry well, no oil, end of the road etc is really rather far from the reality and I would suggest designed to unsettle the lesser informed holders in order to achieve self driven gains.

It is not easy to see your investment drop by 40% in the matter of seconds. It leads to panic and searching questions on what has been missed. However, at this time there is nothing in the limited words that says the phase 1 development is at risk. Nor can it be until A3 has been drilled. With Serenity backing up the whole play even further with its estimated 197mmbl STOIPP, there is much to look forward to be it that it is difficult to appreciate at this time with so much noise now circling around this stock.

@ColonelDrake Whilst I am disappointed by the result of this pilot drill, I would caution that it was a pilot well to optimise the future production wells.

Furthermore, one of those said future production wells is anticipated to be L4, which lies in the phase 2 Liberator East area, closer in proximity to A3 than to the original discovery. In addition, the company has the opportunity to employ the L1 production well that runs through the original discovery well area. To date that was not their preferred option. That may now change.

There are certainly questions to be answered on how things move forward but it is incorrect to state that the A3 is simply a bolt on and not associated with phase 1.

In addition, the A3 and Serenity wells are aiming at far thicker sands (greater in thickness than Blake, which has delivered 100ft plus columns of oil), so their potential impact is far greater than this pilot well and phase 1. It is of course very unfortunate that the phase 1 development is looking like it won't be delivered through the L2 pilot alone, which of course places more emphasis on the next 2 drills. However, there will I trust be much to be learnt from the data from this well, which should stand them in good stead for the next drills and for next year's production, be it they have much to prove now to their financers.

Well it has now been 6 weeks since the operational update, which is smack in the middle of the average time taken between the last 3 drills.

Whilst the information with which to compare is limited, one would imagine that it would spud any day now.

Perhaps we will learn more during the various interim reports and interviews. The show must after all go on until such time the curtain finally comes down.

I see a correction in gold right now as very much a good thing as is SRB stabilising at these sort of levels. The reason being that I am basing my investment here very much around a 2-3 year window.

The recent thus far limited drop in precious metal prices has been driven solely by the latest US data. However, it is one of a very limited number of positive indicators that are still in play and I do not expect it to last very long.

There are clear signs that a world recession, be it that it could be a fairly mild one, is upon us and the US economy cannot avoid the inevitability of that forever. Nor can it avoid the fact that the current expansion in the US is now the longest in history at just over 10 years. The percentages say that this will shortly come to an end with my own view being that it will happen in H1 2020. Trump, the FED and all other central banks and government will try to avoid it by propping up their economies but tall of those measures plus the inevitable weakening of what is a very strong dollar, will act to support commodity prices as we move through 2020 and beyond.

That scenario boosts not only SRB as an investment case for Palito but also times very nicely with what looks like a H1 2021 ramp up at Coringa, backed by ever expanding cash flows along the way.

In addition, the Coringa PEA is clearly very conservative and does not allow for any further initiatives already learnt at Palito, which can and will boost the productivity and cost reductions there, and are heavily hinted at in the interview released today.

The key remaining hurdle is he final Coringa payment on 21st December 2019, which the company look to be positioning themselves to cover through cash flows. Hence the reason why the current $6m outstanding loan and gold options costs have been pushed into H1 2020 leaving only limited interest to be paid this year.

Confirm that and then the finance, which for me also now will enjoy far more support from cash flows, given construction is not planned to start until H2 2020, and then the market can really start to appreciate what a 80-90,000 oz gold low cost gold producer can do in a market with a weakening US dollar, falling interest rates and safe haven driven investment decisions.

With all that in mind the current limited correction in gold is merely a blip and when the dust settles SRB will really start to look like a very solid investment for the next 2-3 years and the market for me will react accordingly.

@Olderandwiser Good morning, your feedback is very much appreciated.

Clearly the 2 companies are completely different animals but certainly the risk reward resonates with me as it did with BMN all those years ago. My analysis was an attempt to demonstrate that there is sufficient information out there, be it that it is older and perhaps well tread, that demonstrates that the opportunity is perhaps much stronger than is currently being perceived.

Much of the chat I have read centres in on I3E delivering an immediate response,an immediate win for investors who perhaps aren't looking too far into the assets and merely smelling the profit to be made from a confirmation of a viable development plan, which is fine.

However, the information I have discussed here I believe points towards a far more assured asset and an ability to achieve a far more prolonged and greater success for less risk than is currently being factored in. So although I3E is technically still a junior oil company awaiting its first confirmed success, in my eyes it is already offering far more than that and should perhaps be looked upon as a longer hold that in the end (existing risks appreciated and understood), should reward far more than just the expected initial re-rate.

I say this because my own opinion has shifted through those particular gears as I have dug deeper into the information and appreciated the assets they hold, the true chances of success, and the actions that could come to pass that are not currently being discussed as openly as the initial headline story is.

I trust that makes sense and I haven't over complicated my response too much.

The following has perhaps already been posted. For those that haven't see it the Mining Minister Gwede Mantashe has been making much of it by saying "this latest investment confirms that South Africa remains a preferred investment destination for mining."

From what I have read the approval is politically led given the size of the project and the headline R4 billion investment figure it brings with it. That said the 16 month application process just goes to show what the DMR can do when they put their minds to it.

Mokopone 4 years 5 months and counting Mr Mantashe and capable of helping deliver far wider reaching benefits to the S.A. economy than this Northern Cape copper-zinc project. The only problem being that said benefits aren't wrapped up in a headline figure that sits well with an ANC that is clearly has its focus elsewhere.

https://www.miningreview.com/copper-2/orion-minerals-granted-mining-right-for-prieska-copper-zinc-project/

https://www.dmr.gov.za/news-room/post/1814