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For comparison, the best case scenario of 20,000 barrels water per day, producing 6 Mscf/d helium at Itumbula is roughly equivalent to the free flowing helium output from the State-16 well in Colorado. So the gross revenue per well should be broadly similar in the two projects (at lower cost in Colorado but with greater equity share in Rukwa).

This is the company’s best case water flow scenario as outlined in the independent CPR, which needs to considered in context of the best case gas/water ratio, the best case helium concentration, and the best for case for reservoir depletion. If they can prove up the best case then that would be good news.

I imagine they will have to make some choices between project reinvestment and working capital in a flexible way. If they weight it on drilling new wells there's the prospect of increased revenue. If they moderate ambition they calm the markets on cash position and make their access to debt/capital easier. Hopefully we hear more at the AGM.

Looks like they've piped out west from Jackson 31 to make a T-junction, bringing in J29 from the north and now J4 from the south. I think that aligns with the objective to start processing an initial small group of wells and lay spine for the wider system.

"The gathering system is designed to incorporate future infill and expansion wells and will include taps and risers set for connection of future wells. Construction is starting at Jackson-31 followed by the main trunkline and then extending out to the other existing wells and finally connecting to the Pinon Canyon Plant site."

*wouldn't underestimate

"Might pay to keep the lights on I suppose."

For any small cap AIM startup company to generate sufficient recurrent revenue to keep the lights on (i.e. cover general working capital over the medium term) would be a very significant corporate milestone. I would underestimate the value of that if they pull it off. It means that the board then has choices over the timing and targeting of future capital raises and debt rather than being at the mercy of the usual vultures (they can use that buffer to scale in or out of reinvestment versus opex). It's not much but if it decouples corporate survival risks from exploration / project development risks then it's a big deal.

I think it's more the pump and dumpers on AIM that they're concerned about in terms of attempted market abuse.

What would you consider to be a positive flow result from the pump test?

...also just to observe that the gas flow in Colorado increased after well stabilisation not decreased.

"Another thing that is not being discussed on here is that the first volumes of gas or produced fluid often carry disproportionately high helium, and later volumes may see lower helium because much of the dissolved helium has already been removed. "

This is all modelled in the CPR to give an idea of what might constitute more or less positive results and the parameters. An extended well test with the ESP should give a good indication of flow, gas ratio and helium concentration for Itumbula. The unknown is more about whether Itumbula would be a 'typical well' for modelling the wider field (as assumed in the modelling) and how well spacing and numbers would affect longer term reservoir depletion (also modelled in the CPR). But that's why they already commissioned new hydrogeological studies of the area to better understand it and improve the models. It's an iterative process of steps that leads towards the final decision whether to invest in the project commercially, or to what extent. But again, that's all set out in the plan for an early stage production phase at smaller scale.

You mean 0.1%

Well under a year Slacker, and half that if you counted in your sleep 😂

So do you believe the FID has already been made Punter? Or do you believe that decision will rest on the unknown outcome of the appraisal stage about to start with the submersible pump testing and the new hydrological studies they've commissioned?

Maybe argue with the board, they were the ones who described the diversification as strategic risk mitigation. Respectfully, I stand by the opinion completely. It's always preferable for any business to have the risk mitigation in place before realising the risk. If I was in their shoes I would absolutely want to see Galactica flowing first commercial gas before realising the appraisal results on Rukwa. Either the Itumbula appraisal will validate the company's best case scenario or it will validate the competent person's more cautious scenario, or it could land somewhere between the two (e.g. best case flow rate with moderate gas water ratio or vice versa etc). As clearly stated, that appraisal result informs the final investment decision, whether to proceed with the project development plan. No one knows, hence the investment in appraisal. The whole point of all the years of investment is to de-risk each risk one step at a time.

I agree they'd have likely gone bust without diversification into a near term production project, but they didn't because they had the good business sense to diversify. The business strategy milestone was always aiming for first gas before end 2025 and they seem to be not far off that, which is great. Diversification into lower risk near term projects makes more sense to me as a business than high risk exploration, or at least a weighted balance between. I'd be pleased to see the diversification strategy expand into development of Pegasus and potentially growth through new acquisitions. Rukwa remains long term and high risk. It's an exciting innovative idea that would change the face of helium production if they succeed but it needs time, money and new technology. First they need to prove the flow rates and gas water ratios at Itumbula, then they need to demonstrate how helium will be extracted commercially from the ground water (e.g. by cross subsidising with geothermal energy/heat production, like the Chinese are doing, and/or irrigation projects for cash crop greenhouse farming projects). In reality, I imagine they'd want to prioritise initial revenue stream from Galactica before risking any appraisal results from Rukwa.

You can choose what you want to believe but it's not a binary choice. Back in 2021 Rukwa (Tai) was being explored with a lost cost water rig targeting shallow helium traps (the same play that Noble were trying nearby). The failure to find free gas at Tai resulted in a complete change of strategy, with a new board and new expertise. LB's decision to target deep basement fractures required heavy equipment, longer timescales and a punt on emerging technologies for processing gas from water. That turned the project from a short term one to long term. They spent 12 months looking at diversification projects to mitigate that risk and Galactica made good business sense in terms of protecting basic working capital.

It's a long term development plan, with an early stage production scheme, first ten year plan, second ten year plan etc. No one is expecting $100m capex up front. The assumption is that this would be based on project finance (as stated by the company), which might typically involve investment banks, joint ventures or/and equity splits. There is a pathway towards a final investment decision (not yet decided), which starts with the appraisal phase they are now entering. If the appraisal goes well in proving up the discovery as a commercial prospect then they'll be looking to finance the early stage production facility as proof of concept for the novel process of helium extraction from ground water (no one in the world is doing this commercially so far). Early days. One step at a time.

What do you think would constitute “a positive reading”, in terms of flow rate, gas water ratio, and helium concentration?

Toffers - "why do you think Nishant Dighe has been brought in? Look at his connections. My guess is he's working on a JV with a major, to help propel us forward quickly in Tanz, or he's working on a buy out for us!"

He's unlikely to be 'working' on anything as he doesn't have any executive or employment role in the company. He's a non-executive director, an advisory and oversight role. He has relevant experience, which adds value to his advice as a critical friend but don't expect him to be doing 'work' for the company.

They've recycled this wording from previous release templates but they've relinquished all the other licences in Tanzania as non-commercial prospects in teh past year, which means Southern Rukwa is the only remaining opportunity in country at the moment, but it is a very large area and would keep any company busy for the foreseeable if it proves up will in the appraisal stage.