Member Info for Blubay

Not on AIM it isn’t

Yet again, it seems the largest trade of the day was ‘accidentally’ reported as OTC during trading hours and later corrected to an ordinary trade after hours. How remiss, a repeat performance seems unduly careless. Doubly unfortunate that only ordinary trades are aggregated in daily volume metrics 🙃

Not massaging the daily volume weighted average at all of course 😉

There should be partner or financing options for Rukwa once they have an independent opinion confirming the commerciality of the project, which hopefully will be advanced by the initial appraisal phase now being funded. Proving the best case flow rate estimates and gas water ratios with artificial lift would be a great start.

I have no inside information but AIM CLN investors are almost always focused on the capital event rather than the company. They’re predominantly focused on near to mid term exit based on price movement rather than fundamentals. But agree that the incentive is around positive news rises. Roughly 20–40% are converted in first three months, especially if price spikes, and 30-50% convert midterm 4–8 months.

Just as a wild stab in the dark (disclaimer) I'm going to guess first target conversion price will be around 0.5p to sell into or above 0.6p rises. But just idle Friday speculation in the absence of news.

If they've worked hard at it then they'll have cleared enough for the cash advance in advance by trading the shares between 0.85p and 1p since the last raise in September ;-)

"quite why theres so much stock available under 0.65 I dont know"

Could be just market uncertainty, or simply profit slicing from the retail shares notifications. Seems fairly stable for the moment. I'm not sure we get any real clues either way unless we see it break above or below the short term trading range established after the meeting (i.e. above 0.7p or below 0.55p). Ten day VWAP currently running around 0.69p, with a hypothetical investor conversion discount somewhere around 0.51p

Anyone who treats investing like a football team or a religious cult is going to lose money, on either side of the game.

I have no knowledge of whether billions of shares will be converted on Monday or any other day. There are arguments both ways for earlier or later or partial conversion strategies. Just on a balance of probabilities, and given its MREX, I’d guess they built their book from investors interested in one off capital events rather than long term shareholding but I may be wrong. They could equally be dipping a toe at a discount to secure seats for the main event. I just doubt it. I’d like more information and clarity about the precise allocation of funds raised and the expected return on investment. That seems lacking at the moment.

Let's hope so, all the initial wells are drilled and ready to tap. The processing plant has permit for construction and is modular so it needs minimal civils work to get containers. The hold up seems to be at design stage though, so they do need a finalised design before it can be commissioned. Then they need to lay pipework from each well back to the processing plant site. They'll also need final permits once complete. It's doable but they'll need to push on now.

Very hard to say but it sounds reasonable. There was some mention about side tracking as a method to increase flow, which would be more complex but within capability of the rig. The CPR includes an indicative map of potential well locations along basement fault lines, divided between early stage and later stage development areas. Rig mobility is also a cost factor, as they would need to either construct new access roads (as they did from Tai to Itumbula) or disassemble and reassemble the rig to travel on public roads (due to TZ vehicle weight restrictions).

I'm really not. The fund raise is, very precisely as the CEO says, "to better understand the concentrations of helium in this unique helium play and further establish multi-rate flow tests, bringing us closer to finalising the development plan and subsequent processing plant." The appraisal phase is about developing 'the development plan'.

Sure, I understand the development plan which is outlined clearly in the CPR and summarised from that report by the analyst. I'm just noting that the 'ESP operations' referred to in the fund raising RNS are not about the 'early stage production' system, they clearly refer to the prior appraisal phase involving the 'electric submersible pump'. Unless there is some information to the contrary?

Sorry, it's an important distinction that this raise allocation for Rukwa provides for the appraisal phase of testing and modelling flow rates, using the pump (ESP) at Itumbula. It is not funding the early stage production phase (ESP). There is a potential confusion over the acronyms but the CEO quote on the raise RNS is pretty clear on this point.

"The capital raised through this fundraise enables us to advance development of the Itumbula West discovery in Southern Rukwa. With the Mining Licence now formally awarded, we're looking forward to progressing the further testing using a downhole Electric Submersible Pump. This important step will enable the Company to better understand the concentrations of helium in this unique helium play and further establish multi-rate flow tests, bringing us closer to finalising the development plan and subsequent processing plant.

Additional funds will also be allocated to our USA helium-CO2 project, operated by Blue Star Helium, which will enable us to progress to first gas and cash flow in Q4 this year."

Nowhere is there any mention of drilling wells in Rukwa or building processing plant. There is not nearly enough capex allocation for that, which I assume would be project funded once the appraisal proves up the commerciality of the recoverable reserve contingencies, as outlined in the CPR.

Just an observation that the raise will fund the appraisal testing of optimum flow rate capability in Rukwa using the electric submersible pump (ESP), but will not fund the five early wells for the early stage production facility (ESP). The acronyms are a little confusing. It should however more than fund completion of the first phase production in Colorado, hopefully more than that.

Already aware of what? The CPR clearly presents the contingencies involved, based on the basis of the data and the company’s modelling and scenario planning.

Yes, I think the most likely project funding would come initially from the TZ national bank loans (with government agreement). But they won’t agree to that without an independent opinion and preferably an off taker agreement (the official taker would also want an independent opinion before signing up). At the moment the CPR says that the project is not yet commercial because of the contingencies involved in recovery, which the appraisal now seeks to address.

I mean following the meeting, 6 August, 0.55 to 0.7

Let’s hope so. First hurdle certainly breaking 0.7 as we seem to be still ranging within the uncertainty candle established going into the general meeting.