RE: Incredible4 Aug 2024 14:11
I think boom was referring to the associated costs of a plant, GEX plant costs are $450m where as HEX $19m
Juniors will struggle to raise that sort of cash as the economics are not robust to sustain such high capex costs ultimately they have no option than to sell it all at the well head
With this, if successful they won’t get full price or premium helium price as the offtaker will have to do the processing and separate the different gasses which comes at a decent cost
But before that they need to find commercial find, As boom states the CoS for GEX is 8% this is stated in the CPR , helium isn’t proven , it’s a large prospective resource potential due to the size of area some 200km but although stated high has readings present in the hussar 1 , the DST failed to flow any hydrocarbons see page236 of the prospectus
Certainly is high risk/high reward , i aim to flip the shares when in the 20s and add more here in HEX as the mkt cap over at GEX still has another 45m shares or so to be added , which will push the mkt cap to £30m on a fully diluted basis in the low 20s
HEX I see as more appraisal than exploration although helium to be proven so exploration all indications it will be present based on the data from the previous drilled wells in the area , stacked reservoirs , proven gas reservoirs to be drilled in optimal position on the crest of the structure , updates as the drilling progresses
2nd well - helium proven, so appraisal well straight after 1st well drilled
Extended well tests to also be carried out to confirm commerciality straight after drilling so if confirmed the data will be run back through the FS and updated NPV announced which will bring the mkt cap closer to the NPV
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