RE: RNS22 Mar 2021 16:30
Good to see the positive notes now we are closer to an event. Having held my shares with diamond hands since listing and topping up since then to almost 3/4 of a million shares, I can't wait for the drill results.
indeed, my initial quick and dirty valuation was a conservative one at £300mm or so market cap (its somewhere in the bb of early days which got hammered by rampers wanting it to be £30b market cap!) but it justified my investment at listing (including risks it could go pear share). if we get a higher valuation, great.
good news today [https://www.londonstockexchange.com/news-article/HE1/appointment-of-drilling-contractor/14907798] can be broken into 2:
1. "Mitchell Drilling have indicated that they are willing to take 50% of the contract value in shares, with a commitment to drill the 3rd hole and optional 4th hole for equity. Not only does this demonstrate Mitchell's commitment to the project, but also offers Helium One the potential to expand our exploration programme to include additional targets that may be identified from the current infill seismic campaign. " ---> great that a drilling company is wiling to put skin in the game - this is further confirmation from a 3rd party on the license. This will get carried over when they sit down to negotiate with institutional investors.
2. "Drilling is expected to commence in mid-May, supported by accelerated mobilisation with a drill rig which is already in Tanzania. The rig that Mitchell Drilling are providing is larger than originally contracted and is suitable for drilling of 6¾" appraisal wells. This will allow the Company to move directly from exploration into the appraisal phase, saving considerable time and money in demobilisation and remobilisation costs and allowing Helium One to continue the fast-track development of our globally strategic Rukwa helium project." ---> this is by far the best news... moving from just exploration to appraisal. more data, more certainty to valuations.
i think a £75-£150mm valuation post drilling / pre cashflow could be justified (in my world) if we hit target results. (DYOR). I am not so worried about capital raise with Cannacord etc - they will need cash or farm out to another party to absorb costs to production. I just hope they will include us shareholders (first dibs) in the next capital raise in parallel to getting cash off institutions.
anyhow, i am holding this for a min of 4x multiple .... anything bigger like 50 multiple (someone mentioned this) would be marvelous but i wont hold my breathe although secretly hoping it move towards there.
<> hands.
ps: did they publish the appraisal program? I would not mind getting a 3rd party view of it.
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