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The CEO commented In interview last year that first production from Rukwa might be possible approximately 12 months after licence award, so maybe second half of 2026 if all goes well. Colorado phase 2 might also be drilled by then maybe.

I may have misunderstood the commentary at the AGM, and you were there so you may have a better interpretation.

"we recognize that the feasibility study that was completed and submitted was an internal document, we are looking into doing an independent CPR um on the discovery well and and the project in Southern Rukwa so that we're in a position whereby when that is done we can we can put something potentially or put some numbers out to out to the market"

The FS is not for publication, never was. They suggested that key numbers would be published to market from the CPR (based on the feasibility studies) when it’s done.

Copying this one here in case it gets buried in another thread. Interesting to look at China’s first commercial project combining pure helium extraction with a geothermal power plant (using membrane separation and PAV). This is no longer ‘experimental’ technology.

https://theelectricityhub.com/sinopec-unveils-chinas-first-geothermal-power-helium-project/

Just to add that helium can be extracted as a byproduct from some geothermal power plants. China opened their first commercial plant last year producing 99.9% pure helium. No idea if that’s what HE1 have in mind for Rukwa.

https://theelectricityhub.com/sinopec-unveils-chinas-first-geothermal-power-helium-project/

The 2020 CPR recognised the general association of helium surface seeps with geothermal water sources but focused on the chance of gas traps (with lack of traps viewed as one of the risks to commercially recoverable resources). The 2021 Hannam research notes similarly pointed to likely conditions for free gas traps. The 2023 CPR considered all wells at Tai to be water bearing but wasn’t able to assess reservoir saturation due to the failure of down hole conditions. Since then, the new BoD with Lorna has focused on a different play, targeting the water bearing basement faults directly (as well as the intermediate trapping layers). It’s a novel approach so the CPR is important to validate it.

That’s certainly what the company have hinted at. They’ve based their feasibility and commercial assumptions on their internal modelling of a complex and novel geological system. They’ve hinted that it’s difficult to validate the models using traditional O&G methods, and mentioned they were looking for a CP with some expertise in the hydrology (presumably to support higher recoverable estimates).

“The negotiation of all relevant agreements has been concluded and these comprise a Regulatory Framework Agreement, a Shareholders' Agreement, the Memorandum and Articles of Association of Songwe and a jointly agreed economic model.

The Company is currently waiting for final approvals and the names of the Government-nominated directors of Songwe and upon notification, the executable versions of all documents will be prepared, and it is expected that a formal signing ceremony will then occur.

The Company is in the process of determining the next steps in the development programme and will announce these as well as the date of the signing ceremony as soon as possible.”

Prior to drilling, the 2023 CPR raised the 2U estimate of recoverable helium resources for the Tai prospect to 2.8bcf (unrisked/unproven, with a 10-14% chance of success). That was a 60% increase on the 2020 estimate (prior to detailed surveying and the 2021 drilling campaign). The same 2020 pre-drill gross estimate for Itumbula was 5.4bcf, with a P50 recoverable estimate of 1bcf. Hopefully the next CPR also raises that with benefit of all the new data acquired from drilling, logging and testing.

The 2023 CPR was an update on the Tai prospect only.

https://www.helium-one.com/wp-content/uploads/2023/05/230519_ERCE-Tai-Helium-Prospect-Report-FINAL-client-release-signed.pdf

There also the various Hannam research notes, updating during the 2021 drilling campaign at Tai but including all the prospect areas in Rukwa.

https://www.helium-one.com/investors/analyst-research/

Then there's the original 2020 CPR on the prospects across Rukwa licence (which was published in Part III of the AIM admission document)

https://www.helium-one.com/wp-content/uploads/2023/02/259989-Project-Apollo-CLN-reduced-memory-Final-13.11.20.pdf

The next CPR could be either an assessment of the Itumbula discovery only (before or after appraising the artificial lift?), or it could combine the Itumbula discovery with the 2024 results from Tai, or it could include an update on the prospects for the whole Rukwa licence areas. The main thing is that all the existing documents estimate prospective resources, prior to discovery. The next CPR hopefully includes some assessment of what recoverable and contingent reserves have been discovered (as well as updating on the wider prospects).

Broomtree - the expected flow rates are itemised in the table in the Galactica update RNS. More generally…

“All production forecasts and commissioning timelines remain subject to a number of factors including: final engineering; regulatory approvals; equipment availability; and market conditions.”

It’s a straight forward enough question, not a criticism. I was just asking why you think it would be 10x in 12-18 months, or what stage of development you think would support that kind of valuation? Like it’s possible we see phase 2 production in Colorado and maybe first early revenues in Rukwa by then. Is your £500m based on what you think market FOMO will give us or on what you think the recoverable resources might be?

On Colorado, it's entirely possible that a full development roll out towards the 16 planned wells (7 already completed) could see closer to $10m annual revenue to HE1 (or potentially double that if they were able to buy out BNL's interest in the project).

Rukwa is at an earlier stage, just entering appraisal phase with 1 discovery well (which needs to be more fully proven up to evidence the estimates of commercial flow rates). A partnership with government in the JV company is a minimum legal requirement for all mining ventures in Tanzania (minimum 16% equity, and 2 directors in the company), so no additional market value can be attached to the fact of partnership beyond the achievement and endorsement so far. You'd need to look more at the quality of partnership, the commitment of government, whether there is strategic investment, etc. We're waiting for more of that info, although we do know the Ministry representatives at the local press launch talked about it as a major strategic project for 20+ years, and making TZ a world player in the market, so that's encouraging. The feasibility study is not for publication but hopefully we get some key numbers from the CPR, based on it. Funding has to be central to the market value, maybe a sales agreement with a future off taker funding that could give confidence to the banks, or some pump priming capital for the first stage of appraisal would be great.

99 - could you show your working for that price prediction? What's your valuation assumption for Colorado and Rukwa, or is it just based on an assumed level of market hype?

They could buy out the Galactica project or BNL for just 5% at this price (would be a better deal than buying NHE for 20%). I wonder if the terms of acquisition gave them first refusal at any offer price from a third party (as it did for BNL’s other licence areas). 🤔

It’s worth £54.7m, pre earnings. That’s not worthless.

6.2m shares traded at 0.85p, between adjacent trades at 0.89p and 0.9p (and average spread 0.85 / 0.9) would suggest a sell, or a cheap buy for the other party, depending how you view these things.

Up to half of mid size trades on AIM can be trades between MMs

As you said in your last post here in August last year, interesting timing 🤔

Linde would have a much bigger footprint in sub Saharan Africa (based in RSA), interest in green hydrogen, sustainability, lots of plant design and engineering. They built Renergen’s plant to extract helium from natural gas (Renergen famously bought billions of dollars of helium deposits in Free State for $1 without realising). Good times! But the Linde plant leaked and was shut down for a year. Bad times.