Member Info for Blubay

The search for a JV partner was contingent on the results of the ESP testing and consequential analysis. You can't enter concrete talks with a business partner until you have a costed operational plan for the project you are asking them to invest in. They had the 600 page feasibility study, summarised with independent opinion in the CPR, but that was before testing the artificial lift hypothesis. As that was partly inconclusive they needed to develop a new forward plan for further drilling and testing that wasn't in the previous plan (as they announced in the ESP results RNS). They will have spent the time preparing and costing that (as well as working on the plans to accelerate the Galactica project). In addition, you can't enter into formal negotiations with a business partner if you don't own the business. Finalising and signing the shareholder agreement for Songwe Helium's ownership of the project unlocks that process and allows them to appoint a representative.

This is rubbish Triple, complete rubbish. You cannot put the horse before the cart in this situation

I don’t know where the article comes from but it’s a misrepresentation of the fact. The 17% free carry is the ‘minimum’ state participation by law in TZ. The government can increase their participation by investment up to 50% but they haven’t. If they had invested $60m they’d be claiming a lot more than 17%.

Unfortunately your interpretation is illogical. How much has been invested so far has no bearing on current or future value.

Oops, my typo error

SHAREHOLDERS AGREEMENT

BETWEEN

THE GOVERNMENT OF THE UNITED REPUBLIC OF TANZANIA

AND

HELIUM ONE GLOBAL LIMITED

AND

BLACK SWAN RESOURCES LIMITED

AND

EAST AFRICA HOLDINGS LIMITED

AND

HELIUM ONE (NJOZI) LTD AND HELIUM ONE (GOGOTA) LIMITED

IN RESPECT OF

SONGWE HELIUM LIMITED

BNL's operating company "moving into a 24/7 production cycle with six wells tied in, precisely as global demand for reliable, domestically sourced helium supply has increased significantly" is highly relevant as HE1 owns half of that project. No other BNL activity or project is mentioned.

Agreement between the government and HE1, it's subsidiaries and related companies (EAH, dormant). No third parties at this stage.

SHAREHOLDERS AGREEMENT

BETWEEN

THE GOVERNMENT OF THE UNITED REPUBLIC OF TANZANIA

AND

HELIUM ONE GLOBAL LIMITED

AND

BLACK SWAN RESOURCES LIMITED

AND

EAST AFRICA HOLDINGS LIMITED

AND

HELIUM ONE (NJOZI) LTD AND HELIUM ONE (RUKWA) LIMITED

IN RESPECT OF

SONGWE HELIUM LIMITED

Carver has stayed 3-6 years in previous AIM roles but I would expect to see significant change in capital or company restructuring under his term. Whichever way it goes it’s unlikely to be business as usual.

Of course any investor would look for a high price given the remaining uncertainty. We know the company wanted to go as far as possible with appraisal on their own to maximise the retained value. They made good progress but ran out of road, much as BNL did with Galactica. I’m sure they’ll hope to retain a controlling share at this stage, so they have maybe up to 33% to negotiate with and will be looking at both debt and equity options no doubt.

The Ministry says it’s Saturday and they’re the ones signing

https://www.instagram.com/p/DXuN3NEjD-f/

I’m only speculating that best value might be obtained from handing a controlling share in Rukwa as a bookable proven reserve. Maybe that could be proven for a modest capital outlay via an appraisal stage farm-in including an option clause for the partner to buy in/out at subsequent development stage. If I understand correctly, they must offer the TZ national banks first option when financing Songwe (but that loan risk might require a proven CPR). Whether TZ would risk a first tranche pump priming investment to push it over the line I’m not sure but it’s possible they might have some interest in nationalising control of the future strategic helium asset perhaps. It’s purely idle speculation on my part that Smith departing and Lorna being offered an incentive to stay is coincidental with finalising the Songwe Helium agreements.

Yes, a Cope/Carver playbook likely signals a more significant corporate restructuring or capital focused phase of development, which is probably what we all anticipate anyway. There are some big boardroom calls to make with cool heads in light of the global helium market. They have one project already at market in a safe jurisdiction with a detailed phased plan for major development all mapped out, which could be rapidly accelerated with moderate to significant capital input (if the JV partner could be supported or bought out). They have a strategic resource potentially available to Asia from East Africa long term if it can be proved commercially, but nowhere near market ready and requiring both recurrent cost and major capital investment. Bird in the hand, bird in the bush. If Rukwa could be proved up with push from a farm-in then the smart thing to do might be to sell it on (maybe maintaining a passive share) and use the funds to invest aggressively in expanding US production quickly, or building portfolio with another safe/near market acquisition. Cope/Carver are capital raising and governance experts. They also have some track record in carving off profitable company arms from companies in order to ditch the burdened shell. But in the hypothetical scenario here that would mean abandoning the historic ‘flagship’ and probably losing those on the board with their hearts and careers in East African exploration. Just speculation of course.

For reference, the compressor swap was in HE1’s RNS on 5 March and the daylight running in RNS 26 March.

Nothing is previously undisclosed. The BNL Q1 report covers the period to 31 March. Everything in it was previously disclosed. The text is near enough edited from the relevant ASX news releases in period. All those details were previously published. That includes the daylight operation and compressor swap. The forward cash statement annex is perhaps relevant additional information that they expect net cash outflow to diminish during the second half of the year once CO2 sales commence from June.

The BNL report only covers the period up to 31 March

Also on Instagram

https://www.instagram.com/p/DXuN3NEjD-f/

There’s been no leaky price movement or volume today though so I wouldn’t expect to see any major news just yet.

Yep, unlocking of the official agreement should mean there are enough ducks lined up to proceed with something. Finalisation of the agreement ought to be price sensitive so RNS tomorrow perhaps?

Great news and perhaps not a coincidence that other news pending may have unlocked the door?

And as usual comments get removed within minutes