Member Info for Blubay

Research suggests 30-50% of AIM share placements tend to trade below placement price within the first month, and I'm erring on the upper side for early stage non-revenue companies like HE1.

I think to be precise we are waiting to hear whether "We are proven to have had a huge find". We know the company considers the proposed project to have positive economics but we have to wait for the CPR to know what we have as it's not evident yet from the EWT results.

It's about 50-50 overall on AIM (whether it goes below or not) but the circumstances massively depend on whether the company is a going concern and if they have any bargaining power at all in the capital markets.

Why would you want to be included in an AIM placing that almost inevitably dips to or below the placement price a few days later on the open market?

What is this placing supposed to be for and when is it needed? There is no need for capital at the moment, or before the end of the year as far as I can see, or likely much before the end of Q1 next year even. The Colorado project is the operational focus for this year and Q1 next. They only just completed the fund raise for that and they haven't spent a penny of it yet. They also raised sufficient basic working capital at least to the end of Q2 next year (end of the accounting year) and topped that up on the last raise. The only planned need for capital is for the development phase at Rukwa and they've already said the preference there is for project funding, and that can only start after the award of the ML (probably end of the year) and then after the formation of an SPV with the TZ government and approval of the financial terms, so that's not likely before Q2 next year. They will also need working capital for H2 2025 of course but there is planned revenue for Colorado before then and we don't know if any JV deal would include any kind of working capital provision (sometimes they do) or forward sales agreement. On balance, there is simply no case for an obvious capital raise this side of Christmas and at the same time a train a load of positive news in that period. The only case for a short term raise would be some kind of surprise contingency (like another acquisition) but I'm not sure even that is likely. The current share price phase is going to be all about progress and drilling in Colorado, not about placements.

The trade was taken at 0.999p when the mid price was 1p (average spread 0.98p to 1.02p). As that's fractionally below the average mid price at the time stamp LSE chooses to show it as a 'sell'. As discussed a million times on these forums there are no sells and buys, just trades between a seller and a buyer. The stock exchange just provides trade prices, while LSE and all the other web feed services choose to colour code them arbitrarily according the mid price and the time stamp.

Indeed, that is one possible interpretation. Unfortunately in the absence of any TR1s (as HE1 is offshore) we don't know if they took a "long term entry point" (investment) or took profit from the "capital raising event" (placing). I'd hope to see more evidence of fund investors coming in once the acquisition deal and the Rukwa project finance are in place. I also think they have a much better chance of raising capital in the US once they become a US producer, possibly even a US share listing in the future?

CEI interview (@9’11”), on the ML timescale

“We hope to have that awarded sort of after around three months. That’s what we know is sort of a timeline in country from other projects.”

"Everything we could have hoped for"

I don't think it really helps us much, subjective as it is, and out of context. Until they can publish the relevant estimates it's going to remain open to trader speculation. Does she mean as much as could be hoped for in their best case scenario or the best that could be hoped for following a suboptimal well test? I have no idea. Clearly the EWT results weren't "everything we could have hoped for" compared to pre-drilling fundraiser optimism, but that's fine because they rarely are, and the company still seems confident about reaching commercialisation milestones for the Rukwa project. Let's hope they're in a position to publish something more conclusive before too long as I think that's what the market is really waiting for. But loads of strong news due from Colorado before then which hopefully gives us a lift in the meantime.

Could you maybe stop using ChatGPT to write these inane posts all day?

"once full dilution churn kicks in"

What's that supposed to mean?

The ML is not coming this week and neither is a placement, same ramping and shorting false promises posted every day for the past month.

That’s right Hemo, and I think it also explains HE1’s strategic pivot from operating as a helium explorer to a near term helium producer. Definitely a time to try and capitalise on the changed market if they can do that. The capital market for early stage pure helium explorers is getting more crowded too.

CEI interview (@9’11”), on the ML timescale

“We hope to have that awarded sort of after around three months. That’s what we know is sort of a timeline in country from other projects.”

Probably in the range from 6-8 weeks to 3-4 months from submission but with it being a larger scale project and an ESIA probably closer to the upper norm. As the CEO said, they’d be pleased to have it by the end of the year and that seems very feasible.

It’s at least three hours from site to a decent road so that’s what IG’s referring to (it’s a fair point but no obstacle for the small number of high value journeys involved). The railway upgrade is more motivated by ease of shipment from Zambia’s copper belt to the East coast export docks, but it’s been trailed also as opening up economic development opportunities in southern TZ, including southern Rukwa.

To be fair, they’ll be using road transport anyway as once you get to Mbeya you’re on the highway

TP5 is less filled, TP34 doesn’t need to be impact tested if it’s marked not suitable for rail.

Don’t worry, the Chinese are already upgrading the railway from the copper belt to DeS, so they’ll be able freight those daily gas tankers at Mbeya 😉

Amazing, so many lucky buyers here putting tens of thousands of pounds on a risky penny share and creating first time accounts to join the chat. You were lucky to get all that research done in time to clear your £36k buy during the minute or so it dipped to 0.89p. Interesting times.