Member Info for Blubay

It went up 100% on last week’s news and drifted back to +85% now. Only down a couple of percentage points today though.

It’s been posted before but this is helpful

https://www.clydeco.com/en/insights/2024/11/tanzania-mining-framework-agreement

AL closed their operations in a dozen or so African countries last year, so that’s a big question mark, but their strategy’s also been heavily focused on emerging markets and decarbonisation, particularly green hydrogen

There’s not much option apart from a diesel generator, which would be much cheaper. I can’t see it being worthwhile cost unless there was a larger socioeconomic benefit/market for the power/heat generation (which perhaps there might be from the Itumbula site adjacent to the village). But that will all have been considered in the six month ESIA study.

They do OK, small companies spend money on PR as and when they need to. They’ve really done a lot of PR in Tanzania across all media, national and local, and with the government. Most AIM companies invest in UK PR when they’re preparing prospectus for a public raise and rarely else. I’d take some reassurance that they’re not doing that here just now. There’s been loads of news flow anyway.

Still a long way to go yet before concrete plans for processing. First they need to locate and drill some wells, and prove up the artificial lift estimates, unless they go for some kind of small local scale proof of concept plant at Itumbula to prove up the long term investment case (they did mention a ‘pilot plant’ was considered in scope of the engineering/commissioning study completed last year). I don’t know what concentration of hydrogen is worth processing at what volume. It’s potentially a 20+ year strategic project and only just entering the appraisal stage so one step at a time. Hopefully we get some idea of the scope or the development plan after licence award.

Sounds possible, don’t know enough about it. The geothermal development council had some ideas about micro generation I think, and by far the biggest cost was the exploration so HE1/Songwe would carry that risk anyway looking for the helium.

A secondary passive heat use for warm fluids in Tanzania is in practical applications like poultry farm incubation. But careful not to run away with the idea. The helium wells would be spaced kilometers apart over a rural area and piped back to plant and the geothermal benefit dissipates over distance. But outflow from the processing plant might have some uses locally. If they could combine a helium processing function into a geothermal power plant there would be a commercial efficiency. But guess we have to wait to hear more about the engineering and commissioning studies.

There’s a new geothermal power plant in Ngozi under development for a while now. There was some funding for exploratory drills in Songwe too, so there’s potential

https://doi.org/10.1016/j.geothermics.2025.103288

https://www.facebook.com/TGDCTanzania/videos/unlock-tanzanias-future-invest-in-the-songwe-geothermal-projecttanzania-is-on-th/2022411174839211/

There’s no hydroelectric in Rukwa. It comes in from the Kariba dam in Zambia but it’s been less reliable recently with drought. Opening up the region to economic development relies on connecting the region to the national power grid via a new high transmission line from Mbeya, funded by World Bank.

Think the Insta post just follows on from the RNS, like they usually do. In the RNS, LB said "We are delighted to have concluded negotiations and reached agreement with the Tanzanian Government Negotiations Team on all documents and associated agreements that are required to complete the formal award of the ML for the southern Rukwa helium project.". The Insta post says "We have successfully finalised the Mining Licence terms for our Southern Rukwa helium project in partnership with the Government of Tanzania." Aren't these the same thing rephrased by the PR? I'm sure we'll see an RNS for the licence awarded and celebratory signing.

To get the licence they have to evidence ‘financial capability’ as well as the technical feasibility of the project. As a London listed company with strong track record and connections to capital finance they would have no difficulty there. They wouldn’t be expected to have all the finance in place on day one (otherwise no explorer would ever get a mining licence). Songwe Helium Ltd will negotiate with the banks. Hopefully they have a plan for the first phase of appraisal already and they’ve already paid best part of $1m for the first year rent so they’ll be confident about making a start. Fingers crossed for more good news soon. First base, the licence and framework agreement.

Thanks, I'm familiar with the region. The water management plan is a big deal if they can make it work in a mutually beneficial way, so it's a good thing for Songwe and for HE1, and a potential cost saving solution to a significant headache (how to dispose ethically of estimated 20,000 barrels a day from just one well).

PS. I didn't 'sell out'. I sold the portion of additional risk shares that I bought a couple of weeks ago in anticipation of imminent near term production in Colorado, when they announced that plan was delayed by up to six months. Otherwise, I still have the same number of shares I had two weeks ago. They appear to be worth about the same amount they were then.

Water management and irrigation is a big issue in Southern Rukwa. You can't do anything water related without a permit, like drilling a well. There are several major irrigation projects planned or implemented, although some troubled by corruption. There's also an issue of tension between modernising rapid farming expansion, including maize and rice production, versus conservation of the lake and game reserves. For example

https://thecooperator.news/tanzania-rukwa-exceeds-crop-harvest-target-by-103-percent/

Interesting that they’ve now relinquished the Eyasi project, leaving Southern Rukwa (minus Stahamili) and Colorado as the sole remaining projects. Eyasi had some of the highest concentration helium seeps but different part of the country and I suppose they have enough on with commercial development in two regions. Certainly solidifies the shift from exploration company to production focus, and saves a bit of cash this year on inactive licence renewals.

Fortune rarely favours those who 'keep topping up' on AIM shares. AIM is a risk market, and pre-earnings mining shares are among the riskiest. The only reason companies list on AIM is because they cannot raise enough capital by any other means. It's a shark pool (some would say a cess pit) that exists mainly to soften the risk for institutional lenders by diluting retail investors. As long as you're aware of that then there's also some great opportunities for gambling and hobby shares. Very occasionally there's also a corporate success story, and hopefully HE1 becomes one of those. Just make sure you manage your own risk, don't invest more than you can afford to lose, and don't listen to the sirens.

Plenty of demand for the helium, as well as the excess irrigation water, and probably the hydrogen and geothermal power (and for the beverage grade the CO2 from Colorado). No problem there at all. The unknowns at the moment are about financing, development cost, timescales and return on investment.

At the risk of stating the obvious it will take a larger number of people or institutions to buy shares and hold them, rather than selling them for marginal profits. That's unlikely until HE1 can evidence the value of the Rukwa project, and how Songwe will develop and sustain long term commercial production at minimal short term risk to HE1 shareholders. Retaining 83% equity share is a great start and hopefully more will be revealed soon about resources, finance and timescales. In the meantime, they also need some near term corporate revenue from somewhere (whether that's from Colorado or from pump priming capital).

Just for entertainment value in the absence of news, nice sunny view of the Galactica field in Colorado yesterday, with all seven completed well pads clearly visible and just waiting patiently for hook up to that processing plant...

https://tinyurl.com/Galactica7wells

That’s fair enough, I'm getting ahead of myself. The challenge is that they were looking for someone competent to assess the hydrology (not just the trap and seal assumptions) so I wondered if that needed to be further evidenced. But they’ve modelled it so I guess the CP can give a risked opinion on that.