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BigGinge is correct though. No-one is suggesting the total helium production is recoverable but the rationale for Lorna’s drilling strategy is precisely its synergy with the evolving Oxford noble lab’s thesis on the Rift (which is what started HE1 back in 2015, looking at the surface seeps). They are trying to tap into a perpetually generating system (by intercepting a continuous transport stream of geothermal fluids). The recovery rate from this method is of course limited by the flow rate of that deep ground water and by their capacity to process it. That’s not straight forward but, within those limitations, it is largely regenerative (or partially, at the very least a longer term prospect than any comparative trap reservoir play). That’s what makes it geologically unique and globally significant to helium supply.

In practice, it’s a combination play as they also have intermediate trap reservoirs, in the lake sands and Karoo (ITW1 was capped with a dual flow to separate these from the basement, as per the EWT results). The basement target is not a trap gas reservoir, that’s the entire point of the discovery, and why they need a hydrological CPR to validate their modelling.

“It is believed that these fluids are carrying the helium in solution preferentially along faults and fractures from deep within the Basement source.”

That was the basis of the discovery RNS, and the claim to be validated by a CPR. If they can harness it then it’s a game changer for helium production.

I used the word ‘infinite’ in quotes advisedly. Obviously it’s not literally infinite at quantity, but the whole point of the fractured basement play in Rukwa is to complement traditional tap and seal reservoirs by tapping into an underlying hydrological system that is transporting helium from deep source. It’s a completely different geological play. It’s not a finite body of gas in a measured volume reservoir, it’s a link to the primary helium production system (although obviously it will deplete to some degree if tapped at high volume over time). The theoretical prospective volumes are potentially enormous as we already know. The question is simply what volume of helium can be recovered, with what contingency, at what cost?

It’ll be great if there’s an AIM herd stampede but the logic behind the Lassonde curve is that this behaviour tends to change when companies move from explorer to producer. As they already made the discovery in Rukwa, there’s unlikely to be much surprise on that score. As everyone keeps saying, any game changing news would probably be about finance, off taker sales, revenue or equity/margins. The ‘herd’ still thinks they need to dilute so any news of non-dilutive finance or sustainable revenue ought to have some effect.

Yes, happy to entertain the possibility of an AIM sentiment spike if there is big and surprising news. I’d need to consider what might constitute a surprise at this stage, allowing that the discovery is already made. It’s possible that news spin on a favourable CPR validation of an ‘infinite’ commercial helium supply could have that effect. Hopefully, news of transformational finance backing would also give a big boost.

It’s a start, but I’m still unclear why you’d price a share by dividing the lifetime NAV of a project (over say 20 years) rather than using say P/E? The test well looks like 6mcf/d (best case with artificial lift), maybe $1m gross per year per well, maybe 1/3 opex cost, maybe 50% equity, maybe 30 wells, maybe $10m net per year? Could be more or less of course, but that could take 200 years to net $2bn. Hopefully, we all meet in the middle somewhere if the flow rates are better than expected, or the equity split is better, or there are more wells. On the plus side the broker target doesn’t seem unreasonable with Colorado and Rukwa in development. But there’s quite a gap between the broker’s 3.6p and 27p or 50p?

Where are you getting £6bn from? And how do you translate a theoretical prospective gross NAV into a share price without an estimate of proven recoverable and contingent resources, or a cost margin, or timescale, of knowing the equity share in the operating company?

Where on earth do you get 50p from? What assumptions are you factoring in that?

First production from Colorado was originally planned for the end of June, but at this stage probably a bit later.

First production from Rukwa is not scheduled yet, but the CEO previously estimated that it might be anticipated approximately 12 months after the award of a mining license (currently pending).

Licence still 'approved' and Songwe Helium Ltd not showing up yet on the registered companies portal.

Are you accessing the public map link or trying to log in?

It all seems to be working fine this morning Gogs, surprisingly fast connection speed in fact

Far more money is lost on AIM by naive retail investors following the advice of rampers than derampers. Holding shares is simply not a requirement for chatting on a public discussion board, and calling for unreserved positivity on any investment forum is delusional cultish nonsense at best (and potentially misleading market abuse at worst).

Thanks, that's interesting, perhaps he was there then

Interesting - "upcoming plans include extended well testing, possible horizontal sidetracks, and farm-out or joint venture discussions"

Where's he getting these operational plans from? Is that from old news or recent presentations? It looks like news from a year ago before the discovery? There's lots of outdated stuff in the article. Horizontal sidetracks? He mentions Balingida but they gave up the licences for that project last year as non-commercial. He mentions the old 138bcf estimate, which was purely prospective hype pre drilling campaigns. He mentions Tai and seismic surveys but doesn't even touch on Itumbula, which was the actual discovery well. There's no mention of the mining licence application, just 'prospects' in multiple licence areas. Looks like a mid 2024 summary with new technical analysis added?

Possibly, just in terms of the framework agreement to establish the SPV, the TZ banks tend to take on largely unsecured mining loans with little surety beyond government backing, off taker guarantees etc, and so a lot hangs on credible independent opinion (for the off taker and the banks). Not sure what mysteries people think are being 'withheld'. The only inside information they'd be 'sitting on' would be revised estimates of reserves/resources (which are still subject to doing further appraisal operations anyway). The reason for that was explained well before the ML application, due to the geologically unique helium system. If they released revised prospective estimates just based on traditional O&G methods they'd only be able to account for traditional trapped reservoirs in the sands and karoo layers etc (which would look commercially weaker on their own). The whole point of the discovery is about tapping into the fractured basement system, where helium is transported from source in geothermal fluids. They'll have to convince the O&G industry that this kind of novel claim adds up. That requires a novel methodology, which is why they talked about trying to find a suitable hydrologist to do the CPR (even then it's hard to appraise without proving the hypothesis on artificial lift volumes). Publishing premature claims from their own internal modelling without validation wouldn't be wise or prudent, in case they got discredited against industry standards/protocols. I'm not sure what big surprises people are really expecting beyond what the published well test results already indicate. They have a novel discovery, it's difficult to estimate publicly. They'll need to appraise it further to prove up the risk/return in terms of recoverable and contingent resources.

Not far off double the recent average daily volume today, including that chunky £90k buy, interesting 🤔

The SP isn't behaving as though the wells are 'dusters', as there's no been no crash in price. Each piece of news has been traded away but with pretty low volume and the price has remained range bound ever since funding the Colorado plan and submitting the Tanzania mining licence back last September (roughly 0.8p to 1.1p, with the odd spike either way). No major sell offs and no major buying. It's behaving pretty much like progress as expected and priced in, but agree it would be nice to see more of a derisking response to the success. Agree the big factor is still the lack of market clarity on plans and funding for commercialising the Rukwa project, but I don't agree that Colorado income is "tiny compared to Tanz". The cost of development is certainly far less and the recoverable lifetime resources may be smaller but it would be surprising if the net income per well was hugely different between the two projects (if the best estimate for ITW1 flow rates are predictive then that would be roughly the same helium output as State 16 in Colorado, at higher cost to extract, but hopefully with a larger equity share, and with twice as many wells in the long term). If Colorado phase two development delivers all 16 wells next year, self financing with no new dilutive capital requirement, then it's still going to be a very significant source of income for some years to come.

Yes, I was slightly premature in raising my stake a week ago at that price but we'll see if anything comes of it this time around.

Daily trading volume 50% higher than average already today