Member Info for KeithOz

Hi Angler. Yes DM has mentioned production, and the Prospectus goes into costed details. However, I suspect this is just to make it clear how easy & cheap it is to start production, thus opening up acquisition potential to a wider range of possible entities. If no one is interested in acquiring us, we have a very profitable back up strategy that will not require a large dilutional capital raise.

We hear all about the change to green energy, and the need for huge increases in the supply of copper, lithium, nickel, vanadium, tin, REEs, etc. My portfolio consists almost entirely of companies engaged in the exploration for and production of these commodities.
It is not yet generally realised that the ultimate high tech commodity is Helium. He is vital, and irreplaceable, in the manufacture of semiconductors, LCDs & LEDs, and fibre optics. It is indispensable for all supercooling requirements, the best-known being for cooling MRI magnets. It is vital for specialist welding, and a whole list of high tech industrial uses. The world supply is dwindling fast, and the world demand is growing rapidly. For all these reasons, HeliumOne, with potentially the largest He resource on Earth, is by far the largest holding in my portfolio. I believe it is inevitable that not only will HeliumOne receive a takeover offer, but that there will be a bidding war. I intend to hang on to every share until the HE1 board agrees a recommended offer. I'm not going to start speculating on a likely take out price, since I (nor anyone else) do not have sufficient information do do such a calculation. But I am going to speculate on potential bidders.

Government-related entities.
Tanzania – privatisation would be the worst possible option. Very unlikely since they know after the Acacia Mining debacle that would put off every single international investor, and Tanzania is desperately in need of such investment.
USA – the BLM reserve is almost completely depleted. The US has a list of strategic commodities that includes Helium, and it is unlikely that the US would be happy seeing HE1 bought by a Chinese company
China – believe that they have automatic right to acquire any vital resource, especially in Africa, and especially if they can then control supply.

Oil & Gas companies
Obvious acquirers, since they can readily leverage their exploration, production & transport capabilities, and gain ESG brownie points for moving away from hydrocarbons. All the US and European majors have announced diversification targets, and some of the Chinese outfits (mostly SOEs) are already going down that road, particularly CNOOC, Sinopec & CNPC.

High Tech manufacturers
Semiconductors – Intel, Samsung, TSMC, plus emerging Chinese players.
LED/LCDs – LG, Samsung (again)
MRIs – Fujifilm, Siemens, Philips, GE, Toshiba, Hitachi, etc

Companies with vast server farms requiring supercooling
Google, Amazon, Netflix, Facebook, etc

Existing specialist gas distribution companies
Air Liquide, Praxar, BOC, LG (again), Samsung (yet again)

Others
Spacex, Blue Origin, Virgin Galactic (big users for tank flushing)

All BIG names – feel free to add more. So imho, ignore all these pesky derampers, don't sell for a pittance after first drill results, there's another 55 targets in Rukwa alone, plus the other 2 basins. Hold on tight and weather World War 3 – the H

Volume is getting less & less. Only 100K in the first hour and a half.

The DME announcement actually says very little, hopefully HE1 will provide some more relevant details so that we can make some kind of valid assessment.

March 22nd RNS:
"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."

Hi Noob - if Tai-1 is as successful s everybody hopes, don't you think there is a good chance that the rig will stay put and start an appraisal drill? DM has previously indicated that as a possible strategy.

Just to expand a bit on the mention of ongoing TDEM by posters yesterday.

Area B:
It may seem an age ago, but target B1, our superconductor was announced on 2nd July, which is less than 4 weeks ago! On 5th July, an RNS updated on further TDEM work. It stated that evaluation of results on B2 were ongoing, and that 2 additional TDEM surveys were to be undertaken on area B, one of which was to be on B1.
I suspect, but of course do not know, that Area B is going to be very interesting. We already have B1, a 'must-drill' target, which is going to have a 2nd survey - is this 2nd survey to better delineate the existing target, expand it, or to investigate what may be a 2nd conductor close by? The other planned survey is over a yet to be announced part of Area B. It has not been announced if these additional Area B surveys have started. Again purely my suspicion, that while drilling of targets A2 & C1 is ongoing, these two additional surveys will be completed, and the results of all 4 Area B TDEM surveys integrated before drilling starts on Target B1. I don't expect any announcements on this until after initial observations on core from A2, since by doing it in that order it will make for greater impact on the market - of course assuming +ve results for A2. No urgency for an RNS on a must-inform-the-market basis, since KAV geos are performing ongoing evaluations. I find it interesting that no detailed information has been revealed on Area B, to the same extent as it has for Area A. In BT's video of 25th June https://t.co/V0i7i6bhIe?amp=1 between 9.05 and 11.30, he shows a detailed resistivity map for the A-C corridor that distinguishes between the Proterozoic and Karoo age gabbros, and in passing mentions that this is a zoomed-in version, and they have more extensive detailed information "that we are keeping to ourselves for the moment" (9.54).

Area C
In the above video at 15.26, BT also mentions that there are 4 additional keels in Area C which are going to be TDEM surveyed after recovery of drill core from C1.

So, all eyes are currently focussed on the drill bit, but it's worth bearing in mind that some additional interesting KSZ info is likely to be released in the next few weeks.

Hey Candid - you want a tip from an Australian? Here's one - buy some more, I just have. There, feeling less uneasy?

Sorry, people, please completely ignore the last two posts. I was typing out views on political risk for two different boards at the same time, Botswana for KAV, Tanzania for HE1. I completely c@cked up by cutting & pasting onto the wrong board. I'll go and lie down for a bit.

should have read "create much needed JOBS"

Hi Layla - It was Acacia Mining, not Nornickel. The late President John Magufuli demanded $190 Bn (!!!) in taxes from them, 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 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 that the government may get greedy and grab the company and its assets, but a low risk. 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.

It's quite surprising that the world's largest Ni deposit is contained within such a small geographic area - 20 x 30 km. Below is the latest reliable detailed resource that I can find, obviously we don't yet know 1. if we have any economic deposits or 2. what their composition will be, but this might inspire some flights of fancy...

Combined Talnakh and Noril'sk ores
Proved + probable reserves - 338.986 Mt @ 1.33% Ni, 2.26% Cu, 5.38 g/t Pd, 1.42 g/t Pt, 0.28 g/t Au, 7.12 g/t 6PGM
Probable reserves - 22.306 Mt @ 0.28% Ni, 0.36% Cu, 4.28 g/t Pd, 1.75 g/t Pt, 0.20 g/t Au, 6.37 g/t 6PGM
Measured + indicated resources - 1380.499 Mt @ 0.57% Ni, 1.11% Cu, 3.07 g/t Pd, 0.87 g/t Pt, 0.19 g/t Au, 4.12 g/t 6PGM
Inferred resources - 462.709 Mt @ 0.89% Ni, 1.85% Cu, 4.40 g/t Pd, 1.12 g/t Pt, 0.26 g/t Au, 5.75 g/t 6PGM.

Reserves are what they are sure they have - the mine plan will be based on this. Resources are less exact - perhaps we could define measured resource as "we're pretty sure", indicated as "quite likely" and inferred as "we hope so". From what I can deduce (these clever Russians keep their cards pretty tight to their chests), the high NI & Cu content Proved Reserves are the discrete massive sulphide orebodies which are currently being mined by block caving at deep levels, 500 - 1500m. These orebodies have surprisingly high levels of PGMs, which contribute about half the value - have you looked at the Pd price lately? The less certain resources are largely disseminated sulphides which would be a lot more expensive to mine.
Judging by the high rates of accidents & injuries, and appalling pollution output, Noril'sk is being run on the cheap. But not as cheap as when they started out, using gulag labour - it's estimated that around 20,000 prisoners died in the mines. It is my ardent hope that should operations start after any discovery we might make, Botswana and its people share in the benefits, rather than it all going to a couple of couldn't-care-less oligarchs. Here endeth today's Lesson, taken from the Book of NorNickel :-)

So far KAV has only photos of sand, not NiCu. Photos of helium don't show up too well :-)

That's over half way down the projected depths of the Kalahari sands, working with just a single shift. Even better, the cores are largely intact, since the strata appear more consolidated and rock-like than I was expecting. That's very good news, because it means faster drilling, less risk of hole collapse, and easier to case. Let's hope the underlying sediments are as kind.

Instead of counting sheep trying to get to sleep while the drill spins on, try counting $$$s... (all numbers rounded)

Orebody dimensions: 1000m x 1000m x 100m
Gabbro density: 3.0
Orebody tonnes: 300Mt
Copper grade: 1%
Nickel grade: 1%
Copper price: $9700/t
Nickel price: $19500/t
=3Mt Cu + 3Mt Ni = $87.5 Bn = £63.6 Bn

If you think there will also be platinum, at 1g/t, add another $12.5 Bn ( £9 Bn)
There, that will help you sleep well for the next month.

A number of people on this board are complaining about the lack of updates, guessing at drilling speed, and drawing conclusions that are at best irrelevant. Here are some points to consider:
Mitchell Drilling are a world-class outfit.
They have a significant shareholding in HE1, probably more than anyone on this board.
They are drilling in difficult ground, a very long way from anywhere
They have every incentive to get this right, and learn from Tai for the next 3/4 targets
They will be advising DM, so why are people blaming him?

RNS 22 March 2021
""We are delighted to work with Mitchell Drilling as contractor for our maiden exploration drilling campaign. Mitchell Drilling are highly experienced in gas exploration with all the technical knowledge and expertise required to deliver a safe and successful exploration campaign."

"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."

"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."
There is a further reason for proceeding carefully. There has already been one upset, and during the pandemic it could be very difficult to secure further spare parts:
RNS 29th April 2021
"Although the drill rig itself is mobilising from a location in Tanzania, the Company is working with a range of service providers to bring ancillary and support equipment to Rukwa from all over the world. Items in transit include casing from China, drilling mud additives from South Africa and Canada, wireline tools and testing equipment from USA and Australia, and bridge-plugs for secure suspension of discovery wells imported from the UK."

So in summary, a very difficult operation with a huge amount depending upon it. It is eminently sensible to proceed carefully, rather than rushing just to placate some anonymous whinger who may have as many as 1000 shares. As DM has said, drilling is drilling, please be patient. As for criticising DM personally, this is hugely unfair - I know few company heads who are more deserving of "Executive" as the middle letter of CEO.

...except the song is titled "RIDE on time"

Having slept fitfully through the coldest night in living memory here downunder, I have had time to warm up my brain adequately to go through the various releases made during the UK day, although I am still wearing a down jacket & beanie hat over my fleecy tracksuit. Some questions have been asked here about drilling details, and post-drill XRF, etc. I have already given a possible take on the drilling schedule, first some updates/corrections to that post:

BT says in yesterday's Stockbox interview that the hole will be cased all the way down, and that the sediments beneath the sand cover are 250-300m thick, not the 100m previously bandied about. So, it will be a slow job, extra care needed not to collapse the hole, and time out for at least two lots of casing. See your GP for some Valium if you are of a nervous disposition.

With regard to post-drill reportable events, some are assuming that BT will wait until assays are in before there is an RNS. Apparently not so - At 6.42 in the same interview he says that "obvious visually clear mineralisation will be a reportable event." This is indeed the case generally, and it is common to see an RNS along the lines of "Hole xx-1 has now reached target depth of 1000m, and initial examination of the core shows massive sulphide mineralisation from 669 to 785m, with visual identification of chalcopyrite and bornite confirmed by hand-held XRF. Investors are cautioned that these results are only preliminary, and should await full results of assays performed to JORC standards". This is a very important RNS, since it will be the first indication that there are (or are not!!) NiCu sulphides

At 7.25 in the same interview, BT says that downhole EM will be performed post core recovery, and that will also be the subject of an RNS. Again, will be very interesting, since DHEM should give a reasonable 3D picture of any orebody within 2-300m radius of the hole.

So in summary, we may be lucky and if all goes to plan, get the first two RNSs (visual/XRF and DHEM) in about a month. I don't know if they will give assays hole by hole or all together, but hopefully by Christmas we will know for sure about all three KSZ conductors so far identified.

I don't expect KCB drilling to start until November at the earliest, but each hole will be a lot faster, since the depth will only be about 200m each, and the substantial regional centre of Ghanzi (pop 30,000) is close by with pretty good access by real roads, and all usual infrastructure, certainly far easier than being stuck in the middle of the Kalahari desert with just an aardvark for company.
Right, I'm off for a steaming mug of cocoa, enjoy your hot sunny day in the UK (London f/c 28C - don't your railway lines start to buckle at this temp?)

Legalwolf/Bamb - I have roughly equal value stakes in both companies, both in a CGT-protected fund. Based on academic investigations going back to the 1950s, I am fully confidant that HE1 has a vast amount of He under Rukwa, but don't know if it is commercially extractable. Based on nearby mining operations, I am fully confidant that KAV has a large amount of Cu at the KCB, and expect it will be commercially extractable. I am not fully confidant that KAV has anything in the KSZ, but if it has, it will be stupendous.
Imho both companies present a risk/reward ratio that is more favourable than any I have seen in a lifetime of involvement in this area, and rather weird that they are both doing first drill at the same time.
Unfortunately, I expect that we PIs will never reap the full rewards in the event of success, because both companies are prime targets for being taken out early in the game by large players, including state-supported interests.

Ella, Initial disclaimer, drilling is a speciality all by itself, and I am now seriously out of touch with modern drilling technique! BUT I was also a little puzzled by the twitter BT comment. A tricone bit chews up the rock and spits it back up in little pieces, which is appropriate for going through sand and sediment that we are not really interested in, but not if you want to take a core sample for petrographic analysis. So, others with more knowledge please correct me, this is what I assume happens:
1. 70m of sand at wide diameter diamond (tricone) drilling. NB as I have said before, this will NOT be "like a hot knife through butter" as has been suggested previously on this forum.
2. This is then cased asap to avoid hole collapse
3. The casing takes up space, so to get back down you need to change to smaller diameter.
4. BT mentioned they are expecting some soft mud strata that may expand into the hole, so I assume this next 100m of unstable sediment will also need casing, so after that another change to a smaller diameter will also be needed.
5. Once we hit gabbro, we will need proper solid core. Here I'm puzzled - at this point, it would seem we need to switch drilling technique to reverse circulation, which needs an entirely different bit & string. If I am correct, how easily can this change be done with the current rig?