Member Info for BigBiteNow

Lolworth is a huge land package with a lot of potential and time spent investigating new areas through pan concentrate samples and rock chip analysis is low cost but can offer significant rewards. It is also a necessary step on the path to establishing a resource and adding value to any license area.

Some 'investors' take each update as a stand-alone whilst failing to appreciate the bigger picture. I could argue that this is in part due to a lack of coordinated reporting that would allow investors to see all progress at each project in one place. An updated presentation would certainly help with this. But that is about ease of understanding rather than the information being in existence.

For example, my biggest takeaway from today's announcement was the confirmation that a drilling programme (the next logical step in defining a resource) will now take place (likely early Q2) and it will include the Gorge Creek West and the Uncle Terry prospects. So far these two prospects are looking the most promising when it comes to gold and indeed silver. Many investors/commentators have likely forgotten about them. If so then I would say read the 24th Oct 2024 RNS again. There is absolutely nothing wrong with those results and drilling around those zones is a very worthwhile endeavour. But to establish that the very same procedures that have been reported today had to take place first and not all investigations can be as successful although there is still promise in what has been reported.

I would let sleeping dogs lie. Sometimes companies want to share things that they can't through more official channels and it tends to be the LTHs who are looking at such things.

Plus it doesn't guarantee anything but it does help demonstrate their confidence.

Morning all,

I've picked up on a couple of things in the latest presentation that I think are worth sharing.

Slide 14 demonstrates the company's belief that there are significant volumes of helium in the Charles Formation meaning they think it is likely fed from the Flathead formation below. Hence why they talk about hydrogen entering the Carles formation but being "consumed by carbon or limestone."

Also, slide 4 shows the new Rudyard leases announced on 19th Sept. Worth looking at this map in more detail and in particular the blue dotted line which seems to indicate the target area. There is a big area to the North and South which may be on their acquisition list. If indeed they are available. But, interestingly, they acquired the new leases 2 months before they began drilling Darwin #1.

https://x.com/BigBiteNow/status/1888852151134224765

https://x.com/BigBiteNow/status/1888870268891787319

Slide 8 of the presentation demonstrates the hurry this management team is in to get into production.

Note the March start (no doubt weather-dependent) vs. the early Q2 messaging. See also the short timeframes for each well which I discussed earlier today. Note also that they are indicating a willingness to drill development wells 4 and 5 before year-end. That would mean increased production would come at the start of 2026 rather than during it which the market is perhaps currently expecting.

Not guaranteed but the intent is there and the drive to achieve it. Exciting times

We have a placing overhang. Let's see what happens when it clears or news flow lands to drive it out.

"I remain a holder here, but find it odd that despite many reasons to be cheerful, the share price continues to drift."

I have read so many versions of this over the years. Flip it the other way. You have found an excellent investment with a bright future before the majority of other investors out there and all you are now waiting for is further company execution and the market to catch up. That is as good a place as you can reach in small-cap investing. Your worst enemy going forward is likely yourself.

@ihavenoclue I am no expert on helium production plant but I know that the membrane is a unit that is attached to the front end of the PSA (see Bo Sears Crux interview). Each one can be attached independently of any other well which again is a super advantage here in terms of development planning and optionality.

That said I wasn't attempting to predict the future I was analysing risk based on what we know. It could well be that the second well (if started in early Q2 as stated) can be ready to be brought online with Darwin #1. There must also be high confidence that these new wells succeed. My goal was merely to establish whether the first 3 wells are fully costed because they open up so much more value and de-risk so much.

It may be cost-effective to take a risk on an additional membrane unit now. That would come out of the discussions with the supplier. HEX may also establish that a new membrane unit can be ordered later if Darwin #1 is to take precedent. After all, getting that first well into production and delivering initial cash flows is an important and defining moment for the company.

My reading of the RNSs and the interview is that discussions taking place are for one membrane unit but I do recognise that business is fluid and things change. The point is I feel strongly that if it is to be one membrane unit first then the others look to be covered whenever they come online and that is a key takeaway from all that I have said this morning.

My question to you JamYesterday would be does it matter?

The most important thing was that this journey and opportunity did not stall. There are many good companies out there with great assets not just in helium I might add that simply cannot progress right now due to capital constraints. This raise made sense and came at a level that gives holders far more than it takes away and that is key here.

I firmly believe temporary market mechanics are what are driving the current share price but they will disappear eventually. The story (post the finance) is just too good to be ignored for very long. I also suspect a great many are waiting for the element of the fundraise being sold off to wash through before acting. Newsflow may just help that process along.

If all of that weren't enough what is also great at Rudyard is the drill to discovery times.

From completion of mobilisation to discovery at Darwin #1 it took just 45 days.

So if they are able to start say mid April then the next production well could be confirmed by end of May. Then it would be about timings to acquire the next membrane unit and connect the pipeline in around Darwin #1. But the point is it would be completed well within time. So a great headache to have + the next well could spud immediately afterwards with results c. late July.

What that clearly points towards is the 3 well hub (drill success noted) being online by Q3.

To all that we have to add in the management here whose core is Bo Sears. What I have posted this morning proves that Rudyard was a shrewd piece of business. Following that with the PSA acquisition rubber stamps my belief in his network and deal-making attributes. The PSA purchase guaranteed a successful and fair fundraise in a market where many competitors just aren't able to achieve the same outcomes. That secures a head start and indicates strongly that other plans must be in place. The idea that RNSs and interview containing M&A opportunities are some sort of new idea just doesn't meet the logic.

So action on that front at the appropriate time looks nailed on to me.

What a glorious set-up this is given how low the valuation is today vs. The numbers I have mentioned (which themselves are merely a stepping stone) and how much this investment is truly de-risked.

...and we haven't even begun to talk about Ingomar and the upcoming acid stimulation works on the Charles Formation.

2/2

But all we investors need to know front end is that the initial 3 well development will happen because that delivers the next phase and then everything else thereafter.

Having their finance in place means the development cost hurdle is now gone. They are building this hub in an existing oil field so any regulatory hurdle also does not exist. That is a rare set up anywhere.

3 phase power and infrastructure for the oil field are all in place. So power and services shouldn't be a problem hence why discussions have taken place with the provider on site this week.

OPEX is so low that profitability once enough wells are up and running is certain even if helium prices drop considerably. Even then long term contracts may well shelter Helix if put in place by management.

There is enough scope in the pricing at present to allow Helix to keep moving forward on their drills and each well is so low cost to drill and add to the PSA that its just not going to hinder them.

Then we have the safety net of lower decline than expected which means they don't need to keep replacing production with new wells. That means each well delivers even greater returns and any lower price environment has less affect because CAPEX isn't a drag.

We know this because of the following from the broker,

"Technical consultants expect a sustained raw gas flow rate of 2mmcf/d for five years without decline, implying a helium production rate of 8mmcf/y of helium production from Darwin #1 alone or 48mmcf/y from six wells, which can be handled by the PSA plant."

What that statement also proves is that at full previously known capacity of 48,000mcf/y HEX need only deliver 6 wells at an average of 1.1%. Previously I had raised concerns over that capacity perhaps being attached to a higher helium grade. But the above statement removes that risk. Meaning the PSA will be enough for 6 wells if the grade is maintained and if it isn't it would likely mean a maximum of one more additional well at $1.2m + membrane costs of c. $500k. By the time they reach that decision, they will have at least 5-6 wells in production.

The set-up here in terms of how de-risked this development is vs. the current respect it is receiving (on a valuation basis) is just unbelievable. Rudyard is indeed a dream first project for a young company to acquire and develop, and the management team have fallen on their feet getting control of it.

1/2

So with the base case in place and a clear path to a 6-well development at Rudyard based purely on proven commercial 2P reserves, we can begin to look at other factors.

Let's start with any risks of a drop in helium prices be it they aren't guaranteed.

The current valuation is based on realised helium prices of $500/mcf.

To date, the broker has established the Rudyard valuation based on 2P valued at $196/mcf and 2C at just $126/mcf.

Because the total development costs for the entire 6-well initial Rudyard development are so low they equate to just "$40/mcf helium produced"

Opex is set at $30/mcf.

So we are talking a total of just $70/mcf costs before positive project cash flow returns are reached. Darwin #1 is expected to generate 8mmcf/year alone. The next two wells if delivering the same helium grades will triple that.

So then we are talking 24mmcf/year which equates to a minimum of $12m per annum in revenues at $500/mcf.

Now that these initial 3 wells look fully paid for we need only include the $30/mcf OPEX which means gross revenues of over $11m per annum before G&A, royalties and tax at 21%. Bear in mind that Montana state tax is minimal in the first year of production. But we can also remain safe in the knowledge that each additional well thereafter comes with an exceptionally low cost per mcf ($40) vs. current helium pricing.

What that demonstrates is that helium prices have got to fall a very long way before this 3-well operation becomes unviable. Yes a US recession could impede prices but the sorts of key uses driving helium demand and the policies backing them should shelter them from such downturns and certainly enough to maintain profitable production and further expansion to 6 wells.

Onshoring of semiconductor production in the US coupled with the increased demand for US supply (think tariffs, geopolitical risks) are going to offer support for US producers. Recessions if they come do not affect all sectors at once or indeed guarantee their inclusion. But even a severe downturn is unlikely to de-rail what is a geographical and protective move more than anything else.

Trump's return as president will ensure that the onshoring and US-produced themes continue. All of which needs to be considered against the ongoing overall shortage of helium supply. So there is no guarantee prices fall at all. I am merely presenting a logical argument which appears to be giving Helix far more than it could remove.

On a more long-term view, any downturn will come to an end and then helium shortage whilst no doubt seeing bumps in the road should continue as it has over multiple occasions already and Helix will be a much larger entity so able to take far more advantage of it.

2/2

So what we have so far is a company that has sufficient funds to deliver the first production and two further production wells at Rudyard. The costs to complete these wells post the tie-in of Darwin #1 are deemed by the broker to be low when compared to the immediate cash flows that Darwin #1 can begin to deliver in Q2 plus HEX has raised c. $6.25m and was believed to still have $2m (broker note states this) as of YE.

The maximum cost to get all 3 wells into production based on the $3.6m plant costs being equally shared and the PSA purchase price of $500k is $4.4m + the associated refurbishment costs for the PSA.

If the PSA refurbishment cost is high (say $500k) then this needs to be deducted from the total remaining $3.1m plant costs which then reduces the membrane unit/pipe connection costs even further.

Of course, the broker could be out on their cost guidance but they are also the joint broker so said guidance is likely to be guided. If pipework/membrane units were a question mark they would have pointed it out in their note and they don't.

What we also need to consider is that HEX has c. +$8m (raised £1m more than planned) and is embarking on growth project works outside of Rudyard. That says to me that the connection of the first 3 wells is fully covered.

Then we need to factor in timings because if HEX are to proceed with Darwin #1 first then this will require time but that doesn't prevent them from progressing orders etc (doesn't mean payment immediately) if the next well is proven to be a success. More on that shortly.

But in essence, before we talk about anything else going on with this company there is strong reasoning to believe that HEX is now fully funded to complete and bring into production the first 3 wells at Rudyard in 2025. Other than failing to hit the 2P reserves or a crash in helium prices (more on that shortly too) the above should (in time) be factored in by the market. But what those 3 wells also do is guarantee the next 3 wells and the path to $ 15m-$25m in post-tax profits per annum.

That is without having to dissect the merits of Ingomar or the pending Charles Formation acid stimulation which the above demonstrates is a potentially significant free hit for shareholders at these sorts of valuation levels. But in addition, all other avenues to future success such as increased reserves, future resources from a larger structure, M&A etc are also effectively free hits when the above is fully understood.

1/2

Morning all,

I've been doing some more analysis of the interviews, RNSs and the Hannam and Partners broker note and there are some eye-catching details to be digested and appreciated. I will deliberately do these in smaller bites. Here are parts 1 and 2.

1. Some may not fully appreciate that the quoted $15-$25m in (peak) cash flows is "after tax, after royalties, after OPEX, CAPEX and company G&A." So it would be profit for HEX.

2. Those cash flows are achieved by delivering 6 well-development programme based on only the current (23rd Jan) Rudyards 2P reserves and the existing PSA. Remember they also have 280mmcf in 2C resources and HEX is due to carry out 3D seismic because the current reserves and the economic model are based on just the old structural model.

23rd Jan RNS

"Results from Darwin #1 indicate closure is larger than expected under current structural model."

So one initial big uplift here should come from that new seismic modelling and then (quote from the broker) "There is additional scope of contingent resources from these two formations which Helix does plan to tap into through its drilling programme over the next year."

As things stand the broker has applied 19.6p of value to the 2P reserves and 10.6p for the 2C resources (remember the existing model only and the structure is deemed to be much larger). Total broker target price today = 50p a share.

As an example if all HEX was able to do was convert the 2C into 2P then we are talking about a 12.1p increase in valuation on that alone. That would take the broker from the current 50p a share to c. 62p.

But the seismic and the drilling that is coming from Q2 have a very good chance of delivering something far bigger.

Now HEX has just raised and the funding is stated to deliver the first production including the first membrane unit and associated pipeline. It is also to "fund the drilling of two additional production wells at Rudyard."

What I didn't read was the funding for the completion of two additional production wells including membrane units and pipework. I also assume these drill locations will be further from the PSA plant.

So I returned to what the broker had said on 24th Jan.

The extraction of just the 2P reserves through the above 6 well development programme would require "a total plant capex of US$3.6mm. Total capex over the life of the project would amount to ~US$9.6mm (US$40/mcf of helium produced)."

"A capex of US$1.2mm per development well."

What that says is that the total expected cost of the plant outside of each well cost and the PSA purchase price is $3.1m minus whatever it costs to refurbish the PSA.

So worst-case scenario the broker expects the membrane unit + any associated pipework to average c. $500k per development well. That is not going to break the bank and points towards HEX being able to complete wells 2 and 3 under their own steam. That is a significant finding.

For those interested this is an interesting and simple-to-understand paper on acid stimulation in oil and gas wells.

"Oil and gas operators have safely and successfully used acid to improve productivity of oil and gas wells

for nearly 120 years. Today, acidizing is one of the most widely used processes for stimulating oil and gas

wells."

https://www.api.org/-/media/files/oil-and-natural-gas/hydraulic-fracturing/acidizing-oil-natural-gas-briefing-paper-v2.pdf

I also note that the current weather forecast for Ingomar has temperatures picking up from Sunday 16th Feb onwards. Still very cold but having looked at the works involved I don't believe this is about how cold it is but rather any heavy snow or storms. So as things stand they look good for mid Feb.

https://weather.com/weather/tenday/l/Ingomar+MT?canonicalCityId=f86472219941cf2483d36bff0a3a026ab53992b51297997f63ed219ad8fbcf6a

Grouse nesting season begins 15th March so they have a good month to get the 10 days of works completed. So plenty of scope and the weather starts warming up the further we go towards March.

On that basis, this Charles formation test should happen. It will be fascinating to watch the trading activity in the coming days and what the MMs do. I have seen many strange things happen over the years so I rule nothing out but my current expectation is for a crescendo of activity as this all plays out.

2/2

My reading of that is that previous testing by HEX of the Charles formation has demonstrated that it can flow much greater raw gas rates than the Froze to death well achieved. If it is a clear read across then it should be higher than the Amsden reported. Bear in mind that the Amsden formation also had an "Absolute Open Flow (AOF*) estimated to be up to 8,000 Mcf/d."

The only issue there was its helium content. During drilling it had "peak readings at 50x over background level."

The Charles formation had "peak values at 130x over background level." Another good sign.

What that all says to me is that the risks associated with the Charles formation should be around,

1. Acid stimulation working. (We have proof of that elsewhere and the HEX team is confident).

2. Helium grades. (There we have a good read across from the Amsden but also).

Is there still risk? Yes of course but this test looks like a very good shot at a marked increase in reserves and the delivery of a second future operational hub.

What makes it even more attractive is the fact that failure does not prevent Rudyard from completing and delivering a sizeable future company. Nor does it remove the deal-making and networking skills of Bo Sears who as you say Kaeren will soon have an even bigger war chest from which to branch out.

It's amazing how subdued the excitement is around these parts for potential gains that far outweigh what was on offer before the drilling commenced but that come with significantly less risk.

But having played this game for long enough I know how quickly that can all change.

1/2

I'm with you Kaeren. This is an amazing market at the moment.

A clear head says I should be pricing a significant percentage of at least 3 helium wells in operation and delivering between $12-$15m in pre-tax cash flows. Never mind what they then open up. But the talk and I would assume (in part at least) the market's focus is on one formation at Ingomar. That formation has nothing to do with the above cash flows and does not define the 2.5% helium content potential in the flathead formation there. But the market is allowing itself to be convinced that it does.

If I jump forward 12 months to where HEX is producing from 3 wells and likely planning through 2 to 3 more then this acid stimulation is of limited importance. However, if they land the Charles formation at decent flow rates and good enough grades then its impact can be very large indeed. Hence why the team deem it worth actioning now. But I do not doubt that this test also helps define where they focus their excess cash next and that is the beauty of all this.

The market is focusing on immediate actions and results and forgetting to factor in the management team's capabilities and form so far.

It is because of Bo Sears that Rudyard was secured for pennies. It is because of Bo Sears that the PSA unit was secured for just $500k which in turn miraculously delivered an excellent fundraise and effectively brought this business to production within 14 months of IPO. It is that form that should be backed to the hilt because it screams loud and clear that it will be repeated again and again. That's what good management does.

However, it is those exact traits that have me feeling that they see more success in the Charles formation than this fearful market dares dream.

Remember the only evidence we have to go off is the Froze to Death well which flowed just 25mcf/d out of the Charles formation but was down dip from Clink #1 and was never tested for helium.

This is what they said in the last RNS,

"The Company is confident in the reservoir properties of the Charles Formation, based on drill cuttings that demonstrated visible porosity, gas shows including helium, and pulsed neutron wire-line logs indicating reservoir quality." That counters the low flow rate data from the historic well.

But also,

"Further confidence is derived from the interpretation of pressure build-up data from our initial flow test attempt in November 2024. Following the initial swabbing of the Charles perforation interval, a decision was made to pump into the perforations to confirm the presence of an open flow path, ensuring no plugged tubing and correct packer depth. The pump-in test indicated a pressure break at approximately 1,800 psi, equivalent to around 0.8 psi/ft, consistent with the normal fracture gradient."

The Amsden "flowed 4,250 thousand cubic feet per day (Mcf/d) of raw gas" at "1,050 PSI wellhead pressure."

It is also important to not lose sight of the fact that ECR had to employ the BlueKebble reported figure of 0.6 grams per cbm when giving an indication of the potential initial revenues at Blue Mountain using a 25tph wash plant.

But their own bulk sampling to date has already demonstrated 1.55 grams per cbm.

If the additional trenching demonstrates that this elevated figure (or something markedly above 0.6 grams) continues then the initial revenues from Blue Mountain can be expected t rise substantially.

Even a doubling of the 0.6 grams points towards a c. $6.7m revenue operation. As I demonstrated the other day the costs aren't going to be very high. Such an operation can enable a second plant and then things get really interesting.

Patience required

@PompeyM But does any of that really matter in the end? What you are highlighting is time-related delays on valuation realisation which I agree are frustrating. In this game, there is a desire to be paid out asap. But what truly matters is tangible progress. Q2 is looking good for having at least two confirmed development wells at Rudyard (normal risks noted). A third clearly won't be far behind. Is that priced in today? No. All I need to do is wait safe in the knowledge that even 1 additional successful well out of two delivers a big enough prize for this management team to then go on and deliver even bigger things. Observers are kidding themselves if they think the only plans in play here are Rudyard and Ingomar. Then we have the hydrogen whose path is still an unknown outcome but one with significant potential.

I also feel well supported by any actions that Trump takes on tariffs against Canada which even if they fall away will inevitably push US users of helium towards US-produced supply. In my opinion, his actions over the last few days were already strong enough to deliver that. That is also not yet factored in here.

The current SP is frustrating but if the SP is my only worry for an investment that is cashed up to deliver significant further growth then I am in a very good place already.

I think the other thing worth considering is that HEX doesn't need to go back into Ingomar now. They are cashed up to deliver 3 wells at Rudyard and could happily sit on Ingomar until later in the year. Why? because they don't need to drive the SP near term.

So the fact they are going back in so quickly and ahead of the grouse season speaks to something. Either confidence is high on Charles or they are super confident about cash to cover all needs at Rudyard. Either way its win/win.

Morning all,

Some simple numbers demonstrating the significance of the Charles formation in relation to Rudyard and the NPV.

The #HEX broker currently has the Ingomar Charles formation valued at 5.9p (risked).

At 687mmcf it is currently bigger than Rudxard on a current 3C basis.

Rudyard 2P + 2C at 522mmcf is valued at 30.2p.

A successful Charles formation stimulation can double that.

I found it interesting that Bo says "We remain committed to the significant potential of Ingomar Dome, and the promising helium and hydrogen indications seen at Clink #1" but that the stimulation works will focus on the Charles formation only. Perhaps an indication that the Flathead is being held back due to an alternative approach being put in place (partnerships perhaps) driven by the hydrogen there. Just a thought.

I see Ingomar as a free hit now because the share price hasn't even factored in the 2 well hub that is now in play at Rudyard.

Over the last few weeks, I have been researching trommel wash plants to get my head around what the costs might look like.

Here is an example of a 25-yard (c 19 cubic metres) solo operator in Alaska which is not too different in size to what ECR indicate they want to start with. Just one man runs this operation be it at a lower run rate of c. 10 yards an hour but with fuel costs (1 year ago in Alaska) of just $150 a day.

That's how simple the operation can be. ECR likely will have a more complex and professional setup but the machinery and manpower don't have to be markedly different. So all this talk about costs outstripping revenues when the gold price is touching $2,800/oz is just talk without enough thought or research attached.

Throw in the fact that the grades are highly likely going to be higher than published today and we have the makings of a highly profitable initial enterprise capable of self-funding the additional stages. Give me just two 25tph wash plants by YE and that will be enough to open up a much bigger prize going forward.

https://www.youtube.com/watch?v=OjHWEEcWIK8