Member Info for Blubay

Daze, they clearly told you that the working capital was sufficient to the end of the current financial year, end of June 2025. They've told you that they since raised additional capital to fund all planned operations over the next 6-9 months, plus an additional allocation to working capital just a few weeks ago. You're catastrophising in direct contradiction to what the company has said in a regulatory announcement to the market.

Agreed, anyone who thinks any of this is easy or in the bag is probably wrong. It's a risky business, but they've done very well to derisk as far as they have and to be in this position cash positive, fully funded for short term ops and without any debt. It's a good position. If they can prove up Colorado to production on schedule to budget then the added value in the project asset will be considerable. They already have one well flowing multiple times the well at Itumbula.

They don't own 50% of Blue Star, they own a 50% beneficial interest in the Galactica-Pegasus project operated by Blue Star, but based on the assumption of a 50% risk in developing it commercially. The £1.5m only accounts for the investment Blue Star have already made in the project.

That's not relevant to last year's accounts or value of current assets, as those are all prior to development. Depends how they chose to estimate their exploration assets and impairments within and across years. For example, did they take a decision not to continue with Balangida or Eastern Rukwa exploration and write it down in that financial year (before end June), although the licences weren't rescinded until expiry in September.

As the RNS says, IFRS 6 allows them to exercise 'significant judgement' about their plans. We know their exploration costs were around $37.5m in year, before impairment. We know they can only capitalise those costs if they believe the 'future economic benefits are likely to be realisable' (that's helpful). We don't know exactly what they've chosen to include in the impairment of $5.8m against this (but we can have a good guess based on the definition they've highlighted - e.g. judgements about exploration that is no longer beneficial).

So, hard to say what effect TZ licence renewals and expiries after year end would have, whether they were included or not. Also can't tell what assumptions were made about Rukwa mining licences in that financial year, before the EWT (or what impairments might be pending in this year). But we do know the Colorado costs/assets aren't in that year, so they can be added.

Might pose some interesting questions for the AGM?

End June the company held net assets of $47m (up from $27m) and cash of $11m (up from $9m) = $58m without accounting for any prospective value from commercial development. Since that year end they have disposed some prospecting licences in TZ (asset value?) and acquired a new ones in Colorado (value?). They will also have spent some cash. Adding on the cash and prospective value raised by the Colorado project, in this financial year, and not accounting for any future value to be added by developments in Rukwa, the current mcap around $60m seems a reasonably conservative valuation at current SP. Not overvalued anyway. Any thoughts?

Spoiler alert. It won’t 😉

You’re welcome to believe what you like. I’m happy believing what the company says for the most part - operational priority on near term cash flow from Colorado by Q2, Rukwa ML by the end of this year, finance deal after that, operational plan for Rukwa commissioned by end of Q1, first Rukwa revenue within 12 months after licence, hopefully end 2025.

Cat, the company’s own project GANTT chart has the application and planning phase going through until March 2025, why would we believe any different?

Of course they will need to raise more capital Ace, that’s a given, but they do not need to raise more capital now and they are fully funded for all their planned activity over the next 6-9 months. The argument is about persistent claims here of a placement every day since the last one, which have proved as daft as all the claims about an ML announcement every day since the submission.

Humour us Daze, you say no gas will ever be extracted from Rukwa and you say they’ll raise tens of millions to extract gas from Rukwa. Which is it?

It’s a reasonable deduction but it has not “officially confirmed” anything of the sort.

Definitely news, it’s the first time they revealed cash positions etc in an RNS, which confirms what they previously said in general terms. In June they had enough cash in the bank for at least 12 months working capital (then topped up in August). All current operations also covered by the acquisition raise. So, fully funded for the next 6-9 months through to mid 2025, while they work out a development plan for Rukwa. Exactly as they said and contrary to what some here have tried to pretend.

Open / Last close

1.43 / 1.70

High / Low

1.43 / 1.43

Bid / Offer

1.51 / 1.90

Very odd

Basic questions on the results RNS and notice of AGM...

Marine - "installation and commissioning of the Company's trial equipment at the MAC² terminal is planned in Q4 2024" - YES or NO?

Morocco - "Preparations for a 30-day commercial trial at OCP's Jorf Lasfar site are now underway" - YES or NO?

Utah - "Valkor expect to drill additional oil wells on site by 2024 year-end to increase oil production to 500-800 barrels per day" - YES or NO?

bioMSAR™ - "on track to being able to demonstrate a commercial bioMSAR™ Zero product well ahead of the Company's 2030 target" - YES or NO?

Not sure what the intended relevance of that post was, but note that it was HE1’s board members who commercialised the Songo Songo gas field for Orca.

Good spot, I had some concerns that the investment conference blurb didn't mention helium in the headline list of key resources so that's good to see

Colorado reserves might be smaller than Rukwa (under 1bcf) but the State-16 well already flowed helium as free gas at many multiples of the best case for ITW-1. Question is whether the engineering model can improve on the EWT across multiple wells, hopefully so. The reason I'm more interested in Colorado is it's bird in the hand, with independent estimates of commerciality, a development plan and permits, and fully funded. That's where the near term value is and cash flow is coming from.

[LSE doing weird things to posts]

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Quite happy with my investment thanks. What matters commercially is how much gas they can get out of the ground to market, at what profit. That's what we need to know. The unrisked reserve estimates for Rukwa were huge (anywhere from 138bcf for the basin as a whole, down to say 25bcf risked for the project, or 5bcf each at Tai and Itumbula). If any of those numbers prove recoverable then it's a big discovery. But the uncertainty is more about recovery, how many cubic feet per day, at what profit. For example, the Colorado reserves might be smaller than Rukwa (