Member Info for KeithOz

The report summary makes for rather a strange read. There is some odd use of grammar, suggesting it has been translated, and some clear inaccuracies, apparently confusing 3He & 4He usages. The use of 3He in cold fusion is highly theoretical at this stage. That said, there is a theoretical opportunity here, but maybe 10-20 years away. All someone has to do is find an economical way to separate 3He from 4He, which no one has yet done even at lab scale. I suspect DME are using their relatively high 3He level as a bit of fluff to make them seem better than other He companies - they are probably going for another capital raise soon.

and how about this one - DM & Proactive Katie!

https://www.reddit.com/r/HeliumOne/comments/oyegey/he1s_david_and_proactives_kate_next_interview/

Should have made it shorter and clearer :-)
1. We are now in Exploration phase. After wireline & DST, we are hopefully in a position to announce a Discovery.
2. Post Discovery, Appraisal stage starts, using a new, bigger bore and long flow tests
3. If Appraisal is successful, we are able to announce Commerciality

Blubay, I will try to answer your question before my bedtime. We are currently in the discovery phase. After wireline logging & DST(s) in the current 10cm diameter hole, a decision will be made as to whether it is worthwhile moving to the appraisal phase

Appraisal involves drilling a separate larger diameter hole and performing a full flow test. This involves a number of stages whereby the bore is closed off several times to record the rate of increase of pressure, and then allowed to flow for an extended period. This gives a lot of information on the commerciality or otherwise of the discovery.
Normally you would put the appraisal well in the ideal position as determined by 3D seismic. Currently we only have 2D on a target that is potentially 2km x 5km, so a decision has to be made: Do we save time and money by moving straight to appraisal of Tai? - given that the drill rig is in place, and has the capability of drilling an appraisal bore. OR do we up sticks and move everything and everyone to the next location, drill our 3/4 initial assessments, then return and do the appraisal once we have a clearer picture from 3D seismic? Difficult decision, which is why DM is paid so much, and why he is there on the ground.

It will be necessary to drill a lot of holes to come up with an initial resource, even for a small area. That costs money. To do the whole of Morula costs a huge amount of money. My assumption is that they will sink a few holes, enough to prove mineralisation is present, before the Kanye IPO. Using funds raised in the IPO they would then prove a resource over one or more small areas. Based on these results the options would include a further Kanye raise, or a sale or farm-in of the project or projects. These look to be big targets, requiring the sort of financial resources only the big boys have. I suspect the strategy is to sell one project, use the cash to appraise the next 3, sell them etc etc.

OK,DBD, I got the wrong end of the stick. I think we will have gone through about 1km of rock that has lots of different strata - some will be porous, others pretty solid, some completely impervious. That will mean lots of different mini-reservoirs with different concentrations of gas, with seals of varying effectiveness, and migration of different speeds. If that is the case, I would guess that the thicker, more porous strata with higher concentrations of He would be designated reservoirs, and these would be tested for commerciality during the appraisal phase, when a larger diameter well bore allows more comprehensive testing. To treat the whole lot as one reservoir with an average He concentration would be highly unusual, since much of that volume would not be commercial, or even gas-bearing, and god knows how you would work out the average He concentration.
I would expect DM to stick to the well understood definitions of reservoir, discovery etc since to do otherwise would start to raise questions over the credibility of the results. At some future time, fracking may be required to maximise production, and that would be done by horizontal drilling into a specific stratum - a good idea to identify these now.
With regard to recharge, yes He is constantly produced from the basement rocks at great depth (the Rukwa sediments are believed to be 12km thick in places) but I very much doubt it is being produced at such a rate to refill reservoirs at the same rate we are able to extract gas. I think the term recharge is being used to differentiate ongoing He gas migration over millions of years, as opposed to a hydrocarbon system where basically it is just one shot and that's your lot.

DBD: re your interesting speculations. It is my understanding that several things differentiate a 'show' from a 'discovery'. We know that so far we have had at least two shows, one of those had a composition of 2.2% He, but that has NOT been confirmed by analysing a direct gas sample, only from bubbles appearing in the mud. We do not yet know any details about the deeper show, nor of the existence of other shows, so can not yet assume that He concentrations increase as we drill deeper, although it seems reasonable to assume that will be the case.
To turn a show into a discovery, it will be necessary to
1. run a wireline to confirm the existence of a reservoir formation, with acceptable porosity
2. show that the reservoir pores are occupied by gas, not water
3. correlate the reservoir formation with the depths at which gas shows were recorded
4. perform a DST to obtain a gas sample that can be properly analysed for He content.

This all takes time, and DM will want to get it absolutely right. If there are multiple potential reservoirs, we will need a DST and analysis for each one, so as someone remarked earlier, the longer this takes the better will be the news.

What's her name Pat?

I'm lucky with a 9 hour time difference from the UK - don't have to wake up early - for me, it's everyday at 4.00pm, after the school run. Dad, are we rich yet, can I get that gaming PC yet? No - wait another 8 - 20 days.

Harpman: did you look at the link that I provided for you? Obviously not, since it gives costed details of how He will be extracted, processed and transported. All your concerns are answered there, so why keep asking the same question, and in a manner that suggests a deramping agenda. There are a lot of decent, honest and knowledgeable investors on this board who put in a lot of effort to help others out - I am thankful for that, since although I am a geologist and mining investor of some decades standing, I have been able to pick up plenty of useful information here. Please don't make this like some of the other boards, full of rampers/derampers/whingers/moaners/criticisers. Thank you.

This is just the completion of the acquisition announced back on 29th March

Hi Harpman, I would have hoped that every one would have read the Prospectus before investing in this company:

http://www.helium-one.com/wp-content/uploads/2020/11/259989-Project-Apollo-CLN-reduced-memory-Final-13.11.20.pdf

Take a look at Chapter 9, Production & Capital Costs, & Chapter 11, Long Term Development. Everything you need to know is there, even pictures.

The sedimentary strata will be cased. Add 3 days to your calculations.

Yes. it's a very clever tweet, but I make it 300 out of 600m, which is just about gabbro time.

I'll stick my head out and say yes to in 'a morning', but not tomorrow morning. It will take time to perform DSTs, especially if there are multiple potential pay zones, to calibrate the wireline for He rather than hydrocarbons, and then integrate all this data with the He shows already recorded as drilling has proceeded. HeliumOne have a habit of doing things correctly, even if it takes a little longer. So I'll be a wet blanket and go for w/c 9th August. I believe in the UK the 12th August is known as "The Glorious Twelth" after the start day for murdering grouse. The helium has been there for 2.4 billion years, a few days longer won't hurt anyone.

Most people think it will be a state. Tanzania, China, or USA?
Tanzania is unlikely to nationalise HeliumOne. The country has a chequered recent history, but seems to have turned the corner.
3 years ago the late President John Magufuli demanded $190 Bn (!!!) in taxes from Acacia Mining, it was finally settled my major shareholder Barrick Gold for $300 M. This, and threatened changes to the mining code, put a lot of investors off, and pulled the rug from several mining companies. Magufuli (a Covid denier and all round eccentric megalomaniac) died earlier this year, and has been replaced by a very nice lady, US-educated Samia Suluhu Hassan.
She has made it very clear that there is a profound change of management in the country, and has repeatedly supported commodities investment. I am sure that she is the only president of any country to specifically mention helium in her nationally-televised inaugural address!

Tanzania is still viewed with deep suspicion by many investors, and I am sure this is, and will continue to be, a factor depressing our share price. I consider it a risk to be considered that the government may get greedy and grab the company and its assets, but a low risk - bear in mind that the Govt of Tanzania is already a mandatory minority shareholder in all mining companies operating in the country.
Quite simply, Tanzania has had a disastrous 5 years under Magufuli, and badly needs overseas investment to turn the economy round and create much-needed investment. Nationalising Helium-1 would immediately shut down any investment in the country - the president is well aware of the consequences, hence her efforts to encourage investment from outside.
Latest figures are difficult to get hold of, but FDI (foreign direct investment) into Tanzania peaked in 2015. Chinese FDI was $226M, the largest into any African country, but eclipsed by US FDI of $1.5Bn. There is increasing distrust of China by African governments, particularly of the way in which they attempt to take control by imposition of contracts with unfair financial conditions. The US is finally waking up to Chinese attempts to control the world economy by throttling the supply chain, and think that an attempted takeover of HeliumOne by a Chinese SOE will trigger a response.

An interesting line-up of speakers:
Helium 1 - the ONLY primary producer presenting
US Bureau of Land Management
x3 consultants
x2 downstream processors / distributors - Air Products & GGG
1 x Private Equity (Tumbleweed)

A lot can happen in the next four and a half months.

Hi Heathboy, I will try to answer what seems to be a reasonable question.
1. The global He market at end user prices is quite small - perhaps around $15Bn. At producer (bulk) prices it is very much less. So no 'big boys'.
2. Most He has been produced as a by-product of hydrocarbons, so no one has been out looking for it until recently
3. The US government has been a major supplier and controller of prices, so no incentive to find more
4. The US reserve has now run down, demand from hi-tech industries has increased greatly, so the price has risen hugely, this is now stimulating search for new supplies.
5. The Tanzania resource has been known about largely only by the academic world until a couple of years ago.
6. HeliumOne has been around for around 5 years, and has picked up all the most prospective ground - first mover advantage.
7. Volume demand is expected to rise at around 10-12% cagr, so suddenly a new potential major resource becomes highly sought after. HeliumOne only listed on the LSE last December.

Hi Mr Screen L-plate. 1st with my business development hat on - I started this thread primarily to open up a wider perspective, particularly for those who have recently joined the board, many of whom are here apparently for just a quick buck on 1st drill results, then get out. 2nd with my exploration geologist (hard) hat on - copper and other metallic ores are normally found in small (often less than 1 km across) economic deposits, of variable grade, so you first have to find them, then put in a sufficient number of holes to be sure of what you have. With the Rukwa basin, He is being produced continuously from great depth over a very wide area. What you need to do is find the structures that can trap it - one hole into a trap will confirm the presence of He or otherwise. If successful, this first drill at the Tai prospect will confirm the entire Rukwa hypothesis, that has been developed over 65 years, and de-risk what could be the world's largest He resource. This is why everybody is getting their knickers in a twist and coming up with share price forecasts that range from hopeful to deluded.

Hi SFBP. I don't disagree with your conclusions, but am not sure of how a state purchase would work. In China, it's easy - the CCP just tells one of the SOEs to buy, and if necessary makes the cash available. Things don't work like that in the US - it required specific legislation to be passed to run down the BLM reserve, and presumably an acquisition of this nature (particularly involving a foreign government) would also require government approval - at the moment, they can't even agree on who pays for the coffee & biscuits.

I think Russia is a non-starter, they just don't use Helium in any quantity, so it's not strategic for them.

The only other possible state interest is Korea, based on the high proportion of Korean industry that is reliant on Helium - includes Samsung, TSMC, LG etc, but as for the US, any of these companies has deep enough pockets on their own.