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With this, it would be possible for somebody (with enough time) to map out the exact line KM details of the 2D seismic as well as Tai, Itumbala and Ivuna highs.
You can obtain the planned 2D sesimic pathway AGS have set out from the LSE 20/10/2021 presentation. From here, using the river, you could accurately map the Ivuna and Itumbala highs based on proximity and cross reference where the structural highs (from the 2D seismic picture) intersect with the river (Satellite imagery from google maps). After, you could use location of Tai and previous maps with a map scale (e.g on their website, under the projects and then Rukwa/finnCapp had one posted too) to within a reasonable accuracy map on the Tai structural highs too.
Now, from here, if you have access to either the previous aerial imaging (I can't remember if this was made available) or some sort of geological mapping, you could compare either of these with with 2D seismic picture to map exactly where the seismic lines were planned for, as well as also refining the Tai structural high accuracy too.
This would be cool as it could certainly help identify the exact areas where they're likely to drill. Unfortunately, I have a lot on at the moment so won't be able to do this and write another one of my really long posts (That I'm sure you all love reading ;)!). But if somebody feels like they want a go, it would be really cool and super useful!
Completely agree with Keith. I reckon we see Tai-3 first. I think this will split sentiment but it really makes the most sense.
Don’t forget that David even said he thought he was about to wake up and release an RNS saying we found helium, until the drill broke. He said his wife was looking at new houses.
If they held such strong conviction before, and the further geo work still indicates tai is a must drill, I would be a very happy man to read Tai-3 is the first site.
@KevinRound
I get what you’re saying, but that’s the risk of investing in AIM listed mining stocks.
If you flip what you’ve said and apply it to other exploratory mining stocks (E.G DME in the same space as us), you’d be sat there thinking ‘why the hell did I sell, ive just missed an 800% rise to take out 25% profit’
Always good to derisk and invest based around your risk tolerance, but the real life changing money comes with the bigger risk!
I really don’t think they will place around 10p.
Realistically we all know the share price will rise on the big future news catalysts and (in my opinion) will likely sit at 15-20p range. From phase 1 we have seen that share prices way above this range can be sustained for a lengthy period of time. Therefore, it would make sense for them to raise then, still enticing for flips but considerably better for less dilution etc
I will answer this for you in two parts.
1 - For background, I have worked on this type of remotely sensed data before. This type of data is indicative data, not data that can be used as a confirmation tool. You use it to model areas in association with ground collected data to further understand the conditions on the ground, often in association with AI. This is why they have to use phrases like could and will. The data they collected, to me, sounds very very promising.
2 - Tai2 sat on the edge of the Tai prospective zone, this has been known since the release of the Tai2 results. To put this into lay speech - imagine a pond (the water being helium in our scenario), Tai1 was in the water, whereas Tai2 was on the pond bank, still part of the pond but not where the water sits.
Today’s volume sits in about the top 10-15 most traded days. If you consider that pretty much every single one of the days above it was either a results day, run up to drill or back to April 2021 that really is crazy for a random Thursday.
There’s a fair few papers online (if you have access) testing the feasibility of shallow gas pocket detection through high res seismic work. Largely this is used in oil drilling to avoid potentially dangerous zones of gas that they don’t want to accidentally drill through - but there’s also research showing it works to detect shallow gas trap systems, especially across largely homogeneous geology (as David has indicated the clay of the basin is). I guess the question is not whether the high res seismic CAN detect the void spaces, but to what it extent it can estimate the volume of gas within. If they just want to pull up some successful drills without getting too bogged down in what quantities we have at each site, I believe the high res seismic should be good enough to do this.
Given that they have calibration data through Tai 1 for a void space believed to contain helium and Tai 2 for a dud drill - I assume they have calibrated the high res on the tai sites and applied to them to the other prospective test zone they have talked about in the newest RNS.
‘Shallow gas high-resolution seismic signatures in a subtropical estuary’ (2021) J. Andrade et al - a decent example of not directly comparable work, but one that shows how this kind of thing could be used to reliably detect shallow gas pockets.
This is my own personal research and there is always the chance I have made errors (mathematical or speculation). But this is why I believe that the notion we can’t afford the 2022 phase 2 drill campaign is incorrect. It also provides what I believe to be the 3 key possibilities for the 2022 drill campaign. Enjoy. Please respond with some feedback, it takes quite a while to write up my notes into a more digestible format and I would appreciate people’s comments and review.
It could certainly be possible that a combined shallow and deep drill program could be carried out. I will say here that for shallow drills will be part guesswork. For this the only way for me to estimate costs, I must assume that the high resolution line surveys will prove successful and will therefore be utilised for shallow trap detection.
I am operating on the assumption that high resolution surveying will cost the same per KM as the standard surveying - a slight premium in cost per KM but without the need to pay for line clearing (as it has just been done).
If you assume that the high resolution will be used sparingly to map key geological anomalies, I believe a fair estimate would be a maximum additional 60km (4x high resolution experimental line) will be carried out. This would cost roughly $0.36m.
H&P believe a shallow campaign consisting of 10-20 initial wells would be sufficient, totalling $0.5-$2m dependant on well cost ($0.05-0.1p/w) and total wells. (H&P 08/09/21).
This would total the shallow campaign to be between $0.86-$2.36m.
I therefore conclude that it would be more than possible to carry out 3 possible campaigns this year:
1. A 3 ‘deep’ hole campaign. ($0.6-0.4m renaming)
2. A 10-15 ‘shallow’ hole.
campaign, followed by 2 ‘deep’ holes ($0.7-0.5m remaining)
3. A 20 ‘shallow’ hole campaign, followed by 1 ‘deep’ hole ($2.0-1.8m remaining).
Both the Hannam&Partners report (08/09/21) and the board (N:David webinar) have stated that all in a ‘deep’ drill will cost between $3-$5m. I have spoken with someone who I believe is trustworthy in this field and they believe given the amount of time we had to contract a deep drill would be roughly $4, $6.5 and $8m for a 1, 2 and 3 drill campaign respectively.
Therefore, after the varying drill campaigns are paid off the remaining available cash reserves would sit at $4.4-4.2m, $2.1-1.9m or $0.6-0.4m number of drill dependant.
This doesn’t take into account the possibility of another Mitchell Drilling style equity buy in for later drills and assumes a pure cash purchase of service.
So far this would covers the funding for a solely deep drill program.
Next, AGS must be paid for the 2D seismic portion of the phase 2 campaign. This is 200lkm of surveying, as well as line clearing crews. It should be noted that ‘excellent ground conditions facilitated rapid progress of surveying and line clearing activities’ (16/11/21 RNS) along with anecdotal evidence from their Twitter that they completely the line clearing within a much shorter timeframe than expected (HE1 tweets).
The initial phase 1seismic campaign consisted of 150km of 2D infill cost up to $0.9m (finnCap 08/12/20). I would note that in theory this could take longer than ‘regular’ as they were having to base estimates on a 1980s era seismic grid (H&P 17/03/21) and would likely have to go back and test geological anomalies as well as not carrying out the line clearing as quickly.
H&P estimated (pre disclosure of area) that 2D seismic would cost between $1-2m (H&P 08/09/21). As the area covered is 133% of the initial seismic it could be fairly assumed that the cost would follow suit and therefore be ~$1.2m. Even with the additional 15km high res line this would place total payment to AGS for the seismic at no more than $1.5m.
A few points of note for this - 133% is on the base price and doesn’t take into account that the turn up and set up costs are likely to be a fixed, not one that scales on size. There is also possibility, based on contract type that with the faster line clearing and potential loyalty perks that this could be slightly less too.
After the seismic is paid off this would leave $8.6-8.4m in available cash reserves, dispute depending.
I have seen this repeated quite a lot over the last few months - ‘we don’t have enough money and need a raise to carry out the phase 2 campaign’. Here is my take on whether we NEED a raise pre Phase 2 drill campaign. This doesn’t meant they won’t do one, but outlines why I don’t believe they actually HAVE to do one. I will point out this is my own personal research that I am sharing with you, do your own research this is not financial advice.
Where possible I have attempted to reference the source of figures etc. I have extensive personal notes, where unfortunately, I don’t always have the exact date but have written myself a source (e.g David), if I haven’t got the direct source I will reference it with (N: my source).
Firstly it has been stated that ‘Helium One remains well funded for current exploration activities. The company is confident about its Phase II campaign and is in negotiation with a number of rig contractors for mobilisation of a conventional rig to target commencement of drilling in Q3 2022.’ (RNS 20/12/21). Personally, for me, this alone puts across that the company has all the required cash in reserve to obtain a rig to drill the ‘deep’ targets and fund operational proceedings.
For a number break down - the available cash reserves sit at $11.5m or $11.3m dispute dependant. (RNS 20/12/21)
So firstly, the company costs. This will be easier to update once financials are released. With them being postponed I will extrapolate from 2020 figures. I will be assuming as with previous reports (RNS 04/05/21) there will comparable man hours and no HSE incidents that would incur additional cost. There is a slight change in the HE1 team so will also assume salaries will be follow an average per person increase with the addition of COO and CFO. This would take us through until at least 2023.
G & A - $0.38m
salaries - $0.67
licensing - $0.37m should be considerably lower as they are multi year agreements, but I will ‘rollover’ 50% for leeway.
Total cost $1.4m (extrapolated from finnCap 08/12/20).
After the company costs are paid off this would leave $10.1-9.9m in available cash reserves, dispute depending.
Hi all,
I will be copying in my thoughts and workings on he1s finances for the 2022 drill campaign. This is copied straight out of the telegram group in response to some comments but thought I would share it here to get your guys thoughts and feedback too.
Enjoy.
I would be interested to read your guys opinions on this theory too. I’ll throw some logic and see if you guys reach the same conclusion-
With them testing the northern extension of Tai and Itumbala it would be reasonable to assume that they ran lines in an eastward direction, NTai -> Itumbala. They also added an additional 20lk due to ‘newly identified leads’.
If they were in fact running it eastward, to me, this indicates that they have found some positive seismic data at the Itumbala site. I can only see that they would extend it if they had positive reads nearer the end of the transect (towards Nkanga?) Therefore, Itumbala has promising seismic which might push on towards Nkanga?
This would be very good for diversifying the risk of location for further drilling. And for my final rampy comment, don’t forget Itumbala is the largest estimated hit ??
What are people’s thoughts on the facts they use 140-280koz in the investor presentation but across multiple news outlets they are keen to mention the internal aim of 500koz? I don’t really have an angle with this question, just curious for others opinions.
I've only been watching this for a month or so but having looked over (all?) the available material I really feel like its undervalued at its current share price. It has pretty much hit an all time low (since 2017ish), but they've come so far! I managed to grab a small holding for flat 20p, will likely increase over time as and when my other current investments come through. I personally see this as a reasonably reliable road to expansion of resource in a short space of time (relatively speaking).
As someone who is quite active in a fair few mining stock communities (if thats the right way to phrase it!) I have only ever seen this mentioned once ever. I wonder if the low volume and likely lack of notoriety keeps the share price pretty low? thoughts?