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Yep, think that’s a done deal. Only exception I can see would be if the Rukwa appraisal went well and a farm in partner turned up with a cash consideration for HE1’s initial outlay (as we did for BNL)

Indeed Pete, exactly my feelings, unless the £4.5m is to fund the nine wells for phase two or to buy out BNL’s interest. Some explaining to do at the meeting.

The FS isn’t a public document and I can’t imagine it would ever be published in full. The CPR is based on independent access to the study and that summarises the data and the development plan. What the haven’t released is a summary of the financial plan or cost/return assumptions. Hopefully we get that in a presentation for the meeting. But the Rukwa project is only just entering the appraisal stage so there’s plenty of work to do yet before there firmer numbers to inform an final investment decision. I’d prefer to see the revised numbers for Colorado and understand why another £4.5m is needed there when it was ‘fully funded’ last year.

So they’re still going after shallow sedimentary traps?

Still on course for first production this year.

The company dropped a NED last year as part of cost savings, so it’s a replacement really, also a better skills match entering the transition to commercialisation phase of the projects I guess.

That’s a different company altogether. BNL is listed on ASX in Australia

https://www.bluestarhelium.com/investor-centre/asx-announcements/

Would definitely welcome your estimates EIEOI, in case I’ve got it wrong or misunderstood. As far as I can see, the company models an unproven optimum well flow scenario of 6,176 scf/day helium for Itumbula (around 2,250 Mscf per well per year) The CPR then chooses conservatively to risk only about 1,228 scf/d (c. 448 Mscf). Basically one fifth, until proven.

That’s not what I said. If the company is correct in its modelling then they could gross at least $30-40m a year from 30-40 wells, and $300m-400m over ten years (minus cost, minus government share, minus JV partner share). Maybe a third of that to HE1 (maybe $10m a year). But the CPR takes a different view on risk. It allocates

22,414 Mscf from the five ESP wells

56,254 Mscf from the additional CPF wells

= 78,668 Mscf in ten years

Multiply that by whatever you think an off taker would pay to truck that daily from rural Rukwa to DeS and ship to market. Lower case $500 = c. $40m (before any costs or equity splits). Higher case could be much more.

“Where did you get this information?”

Just back of an envelope, so don’t pay too much heed. But if you take the (cautious) flow estimate based on the ‘typical well’ assumptions in the CPR then it comes in about a fifth of the company’s more optimistic modelling. So I was just comparing the CPR to the EWT, which might suggest maybe $1m per well year gross and knocking that down to about $200k ( yes, I believe that’s very cautious but it’s all they allocated, unless I got my numbers wrong which is entirely possible). That would all change if they proved up higher flow numbers with the pump.

Would be interesting to hear what questions shareholders have.

Personally, I can see the clear rationale for the Rukwa project raise and that fits consistently with the EWT, the CPR and previous statements by the company, elaborated in presentations or interviews.

I do have questions about the RNS in tension to Galsctica. The acquisition was made on the basis of a fully funded equity raise, after due diligence, to bring phase one into production in Q2 this year (put back until Q4). The drilling programme appeared faultless, apart from the minor contingency of delayed start and resurfacing a grit road after the snow melt. The raise included the processing and pipe work tie back. The new raise allocates more than that entire budget to get into production for the same date. What is the extra money for? Is the processing that much more expensive? Are we taking over BNL’s share? Is the funding actually for phase two?

I think that would be my pitch at the moment.

Sorry, yes I would have said that several times. I meant the bit about ‘a specific request’ from a potential JV partner. HE1 can use the CPR to help progress discussions with potential off takers but I don’t believe they have a JV development partner at this early stage, pre appraisal. I may be wrong but the kind of larger partners people often talk about here usually want the minnow to swallow all the risks before signing up to commercial development costs. Rukwa is a really interesting prospect but it’s a completely novel approach to commercial helium extraction from water with yet unproven reserves, relying on unorthodox modelling, and new technology. If they can get those numbers firmed up then it looks good. Currently the CPR is modelling perhaps $50m of extraction over the first ten years, which may be conservative but it is the independent opinion that any partner would be relying on for an investment decision larger than that (but it could all look much attractive if proven).

If that’s the sum required then that’s what’s needed. Pre revenue, early stage small cap explorers without proven reserves have no other option in the capital markets. I think they’ve done great to progress to this stage, within sniffing distance of becoming a self sufficient going concern. Very few start up explorers achieve that.

it's bizarre that you spend all day every day picking over every post with a different opinion to your own (and most that have the same opinion) yet you can't engage with anyone questioning any aspect of your own posts. it just seems childish and paranoid to dismiss opportunity for sensible conversation here and ridicule everyone else as a 'trader'. just accept that you got this call completely wrong, we all do from time to time, it's not a problem. **** happens.

... also punter...

"i think deals are being finalised and finishing touches to organising signing ceremony."

"nb "all of the necessary financing options that we have available." they are there and they are available. imho more a case of picking the best option for us for all the choices offered by those who want a slice."

"...pretty sure that they will go straight into digging first well and appraise as they are going along. seems pretty simple and straight forward to me?"

Indeed Punter, as I said, I wasn’t convinced they’d want to release a CPR that didn’t validate commercial viability so I hoped they might be able to secure some kind of initial small scale bank deal to test the pumped flow rates first, so that data could be included in the CPR. I was wrong and they put they had to conclude the CPR without proven reserves to get what rescue funding they can. It is what it is. One step at a time. I still believe they’ll make it with Colorado and hopefully continue the journey in Rukwa.

How are you feeling about your own months of ramping here about everything being already proven and all the major investors queuing up for a JV to be announced on day one?

It’s hard to see a scenario in which the loan notes would be repayable in 12 months, other than sale of the project after proving up commerciality, or maybe at a farm in deal that pays cash in recognition of HE1’s work in proving up. The repayment could split two ways, with Colorado washing its own face for half of it, if phase two is now funded or BNL’s half is bought out perhaps.

I haven’t said this and don’t believe it. It was always the project required appraisal before establishing its level of commerciality that has always been clear on the company website - “this project is entering the appraisal stage” etc. All the talk about investors queuing up and major JV partners to be revealed on day one was just ramping. The EWT results provided a basis for speculative modelling about the flow rates company hoped to achieve with artificial lift. The CPR confirmed that modelling a basis for ‘scenario planning’ but stopped short of confirming the commerciality of the project without further appraisal (adopting a more cautious probability). I was hoping they might secure bank finance to test the pump theory and prove the commercial viability that way, so it’s disappointing but not entirely surprising. Lots of positives though. It will be fantastic if they can fully fund Colorado development from this, and hopefully the Rukwa modelling can be proved up too.

“ as i understood it with the completed feasibility study as part of the mining licence application we would have had to prove how the funding was going to be raised”

Not really. That was just what certain posters here insisted on repeating for weeks on end. The ML application does not require that specificity. It requires that the applicant demonstrates ‘financial capability’, which is more about potential than actuality. HE1 would have little difficulty passing the FC test as a London listed company with a track record of ready access to capital markets (as they’ve just proved). No small cap company would ever get a mining licence if they had to evidence all the funding up front!

Colorado is massively in the company’s interest. It’s their survival strategy for a start, and it will be considerably profitable if they can get this £4.5m away to roll it out without any liabilities or dependencies. I’m only guessing of course, but this is way more than they need to get to first production so it’s either to buy out BNL’s interest and double the profit margin, or it’s to find the drilling of the next 9 wells in phase two. Either way, fantastic near term prospects there if they pull it off.

They’re also the MM Toffers, they’ve been playing the market on this share for months.