Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
It's not "something on the side to look at, once they start to produce Helium". It's an engineering design challenge that has to be solved before they can produce helium. The key usp for the business is that it's a pure helium play without the complications of processing hydrocarbons. The Hydrogen is a bonus but also has to be dealt with in the plant.
Thanks, I see the projected 'operating cash flows' for this well but I don't see any estimations of free cash flow (although they seem to have been open enough about debt etc.). We'll get the 2023 accounts end of June this year and have to fill in the gaps for the current half year 2024.
In the fundraise 150 bopd was anticipated to deliver ocf of €40k per month (@ $80 barrel). Current oil prices work a bit in their favour. At that time (February) the company had cash balance of €1.2m with bills of €1.1m due by April (now), and €1.4m due between May and August (very soon). They raised about €3m to fund the side track drill and they hoped to cover the next due payments from the increased flow rates achieved, so I'm unclear whether the €40k per month estimate is pre or post payment of those dues.
The company as a whole produces a small amount of oil but development of this new well is hoped to significantly increase that when it comes back online, and hopefully leading to one or two more wells in the same field. The company was still making a loss while the new was limited to a low flow rate (and no flow during the current works), so the success of the side drill remains fundamental to the company's survival. I'm not sure what a profit making production rate would be and I think they have not yet published the full financials needed to know this.
"Just 150 BOPD and we are apparently self funding which makes this so attractive."
Where do we get this figure of 150 from?
Rising helium costs bankrupted the last company that tried to commercialise that plan a decade ago. Others are working on it, for example in premium passenger/tourist ventures but still looks prohibitive for scaling up to mainstream freight ops (>$100k for one trip?).
Absolutely, it’s a finely balanced relationship. TZ needs foreign investment to deliver its economic growth ambitions, and mining/O&G is a large part of that, but it exercises a tight regulatory regime on that investment (with a high emphasis on establishing locally based companies, creating local employment, and delivering local tax/fee income). That’s also why HE1 operates through HE1 (Eyasi) and EAH etc
There are two angles to consider, (a) the reallocation of forfeited prospecting licences, (b) the conversion of existing prospecting licenses into ‘mining’ licences (i.e. production licences). From the wording of the RNS, I assumed they were there to keep relations warm in preparation for expediting the latter, as that will be pre-requisite to getting anything commercial out of the ground, and delay would be path critical.
Yes, all very positive for the company and the likelihood of hitting their core strategic aim to become a helium producer before end of 2025. It's unlikely to help the share price in the short term as the market is dominated by trading and spread betting during periods of uncertainty.
“l if that RNS was meant to be a "fluffer" for a forthcoming raise PJ it crashed and burned dismally - the market still looking very flacid.”
There may be more to come but I thought the RNS did what it was supposed to do, maintaining the SP with sufficient headroom for a discount above 1p. It may also have enabled some of the 1.5p investors to recycle for that contingency (although I presume most of those were forward sold or churned after that raise). If they can get the funding away at or above 1p I think that’s likely a decent outcome. But I do think there is more news/fluff to come, depending on your viewpoint.
It's not "being supressed", it's just a very heavily traded share. People sell on news, regardless of what the news is, and traders aren't going to buy back in to lock up funds on a share during a slow news period. They're more likely to short it. No-one here is invested in the company, we all just trade second hand shares from each other. At this level on AIM, at least short term, you're betting mainly on the mood of the market not the fundamentals of the company (after all, it's still a loss making enterprise with zero income stream). That changes when the company becomes a going concern and long term investors might have that more in mind.
I don't disagree in terms of notional balance sheet value of the company, although the market impact of different forms of financing can range quite widely (at least short term). An announcement of share issue raise is almost always at significant discount to market price (e.g. equivalent to the dilution) resulting in short term price drop. An announcement of securing a finance deal for business development (e.g. debt) is often greeted with significant short term rise in share price.
Dilution literally means more shares, that is the definition of dilution, dividing the value of the company between more shares so that each share represents a smaller slice. Non-dilutive finance refers to any means that does involve the issue of new shares (although you could argue about convertible notes).
I think we should be clear to distinguish between ‘whether’ they have a commercial discovery and what that amounts to. I don’t think there’s any doubt they have a commercial discovery, which does need to be further quantified, and have now moved on to planning ‘Phase III’ of the strategy (development and commercialisation).
Liberum are the NOMAD for HE1, and the joint broker for fundraising, as well as one of the MMs for this share. They may be right on valuation but they also have a vested interest in talking the price (or at least the company’s interest).
Non-dilutive funding options would be more likely after finalisation of commercial resource and production estimates. At that point there is a quantifiable resource on which to leverage loans, or to negotiate a JV. It’s possible partial costs of the EWT could be offset by interim income from leasing the rig. I’m still unclear on the latter option as they were keen to announce that there were interested parties, while the rig has remained hot stacked and crewed during a non-drilling period. We know they wanted a rig manager to start April, and we know that Noble have just short listed ‘local’ (low cost) rig providers for their shallow appraisal. How many local rig providers are there?