Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I'm not de-ramping in the slightest, the share price has gone up 1,000% on news and I expect it to at least double if that news is confirmed. I'm very bullish but my personal investment won't make a jot of difference to the share price, wishing something does not make it happen. After that, there are a lot of contingencies affecting market price.
I honestly haven't a clue Chesh. I think it might take time as they have to work out a model for combining presentation of orthodox and unorthodox data in a reserve estimate model that is sufficiently robust to meet O&G industry standards as a basis for an investment case. That's not straightforward. Reading between the lines they seem to have indication of some trapped reserves at shallower levels (the typical trap and reservoir that the gas industry is familiar with, and what NHE have) but that's probably a modest amount, useful as a backstop but perhaps underwhelming on its own. Then they have to factor in the gas flow liberated from hydrothermal fluids, which isn't a 'reservoir' in the typical sense. I have no idea how they do that but I'm sure they're consulting. They also have to persuade the market that it is commercially recoverable. That brings into play also the hydrogen component they weren't anticipating in the mix. It's always possible they are playing for time too, in order to progress any speculative pre-results discussions with third parties before releasing them. But mainly they have one shot at market impact and they do need to get it right, and be ready to capitalise on it. The media PR is obviously a holding tactic to try and prevent too much natural fade in share price while we wait. I doubt it will be long, she did say it was the 'short term' priority.
Once the company is in a position to share the full analysis then the market will be able to get its head around the commercial value of the discovery. Until then we have excitement, which is a more volatile commodity than helium flow.
No, I don't disagree at all. The preliminary results are very encouraging and the share price has responded very positively to that. I'm optimistic. I'm just trying to be realistic that the wider market and institutional investors need a fuller analysis (which the CEO has already indicated will be forthcoming in the short term). If it's good news then we'll see another lift in share price. Then the market will need details of the commercial development plan, costings and timescales. If it's commercial then we'll see a bigger jump in share price.
Yes, they needed to order in a smaller diameter drill bit/sections to do that because they had to case it down to deal with the unstable conditions at fractured basement. The lead time made it unfeasible to wait and they moved to Itumbula. So it's an option, if they have enough conclusive evidence from Itumbula, and if they wanted to move everything back there to try and prove the basement hypothesis without the hydrothermal carrier.
"it reached it's high june/july of 2021, without a discovery"
It reached that high because the CEO misled the market by Tweeting the word 'discovery' without being able to back it up with independently verified data and had to resign as a consequence! If there is a proven discovery this time then it will go up and stay up.
If it gets pumped then I'm sure it will go much higher on results. But we would then need some info on the commercial development strategy and finance side to sustain real share price growth, which I'm also hoping for. One step at a time. If we get 4-5p then that will be great, if we get more that will be great too. Talking about 20p is a long way off yet.
The current mCap is much higher than it was at time of the analyst report, which I do think reflects a reasonable level of optimism following the preliminary results. As and when we get some meat on those bones I see no reason why it shouldn't quickly rise to equivalent mCap highs.
Yes, but let's all be accurate and realistic. So the Hannam report (let's not pretend these things are entirely independent, as they're commissioned and published by the company to boost the share price, usually for a capital raise)... anyway, if we accept their scenario of a 50% mid chance of discovering 10 bcf recoverable helium from Rukwa as a whole, then the target of 26p equates roughly to 4.3p today (615.3m shares in issue in September 2021, compared to 3.7bn today, factor of 0.166). The share price then was about 9p, which equates to roughly 1.5p today (the most recent placing price). So, you could say that the current share price reflects a reasonable level of market optimism about the drill results de-risking the prospect, but that there is a good bit of headroom for a proven discovery.
The 2021 analyst report, based the risked NAV estimate of share price on "~5bcf helium discovery once fully derisked" (which you would know if you read the sentence after the one you copy and pasted).
The 138 was an unrisked estimate based on 2019 field data and analysis across the Rukwa basin. The total risked (2U/P50) estimate was 14 bcf at that time. Itumbula (across three sites) counted for a P50 risked 0.53 bcf helium (double that for Tai). That was based on a macroseep sampling programme with the Oxford university team, detecting 8-10% helium deep gas concentrations (higher than previous sampling). The spectrometry indicated crustal/basement helium characteristics transported by (volcanic) hydrothermal systems. That is essentially the thesis that appears to be proven by the Itumbula drill. So we're now waiting for de-risked estimates of the prospect, based on data from the drill.