RE: 100bagger ?27 Jul 2021 22:18
@Noob
It's s very simple logistical route An African mega project.
The capital cost for production of 350 000 mcf a year
is about 50million dollars.
Now that's based on a top level engineering study using a theoretical gas composition that comes out of the ground.
If you include some production wells, infrastructure to tie the well heads together, surface improvements for that first 50 kilometers of road to get to the tanzanian highway,
we're looking at maybe 70 to 80 million dollars.
The north field expansion which the Qataris are
building is going to produce 400 000 mcf of helium
and that's looking at a production capex of 28.5 billion dollars.
So 80 million dollars is a lot of money
but it's a drop in the ocean compared to some of these mega projects out there.
And it's a drop in the ocean compared to our payback period you know
Selling 130 million dollars worth of gas every year,
that's 350 thousand mcf at 375 dollars an mcf.
Even after the government free carry, royalties, corporate taxes
operating costs uh your margins are extravagant
And your payback time is less than 12 months
A 12-month payback time
The other thing to know is that this production is modular
you know each of these it comes in as a set of a dozen shipping
containers.
Footprint of less than a 1000m^2
You make it off-site in America or Germany and it gets shipped
and bolted together ion site.
Um once we've paid off the capital cost of our first module we'll
be in a very good position to self-finance our second module
and bring ourselves up to seven hundred thousand mcf a year.
The market needs it.
We are then in a position to review and potentially add a third production module then we'll be producing a billion cubic feet a year,
and we've got 10 to 15% of the global market, and we are the
swing suppliers.
We're the people who've paid off our capital cost and we can play around a bit, we can increase production and drop the price of helium, look for latent demand in the market but
we can reduce our production and increase the price of helium
and take more of the margin.
A billion cubic feet a year we can keep on doing that for
over 100 years and that's why on the first slide i say this has the potential to become globally strategic because in a success
case we've got the capacity to be the price setter in this high-tech
high-value commodity for over 100 years.
And that's the sort of thing which is quite difficult to ignore
Sign In
Follow the stocks
