RE: Ticking up3 May 2024 12:10
Posted this earlier, apologies for the repeat for those already invested:
This from Proactive, published 17th April 2024
Shares in Helix Exploration PLC look cheap, based on analysis undertaken by two research groups that have begun following US-focused helium exploration (and soon-to-be production) group following its AIM float.
Helix successfully listed at 10p a share and moved to a strong first-day premium; however, the stock is now trading in a narrow corridor just above the IPO price.
Several catalysts could provide Helix a leg-up, including the company’s scoping study and its economic model. However, the real grist will be provided when drilling gets underway in the third quarter.
The independent investment bank, Hannam & Partners, reckons, that on a risked basis, the Helix is worth 27p each, or 150p unrisked, while Oak Securities calculates the risked net asset value to be 39p and 131p on an unrisked basis.
“Therefore there is large upside potential to our valuation in a success scenario for a relatively small exploration cost,” said Hannam in a note to clients.
“Also, given relatively low development costs, there would be low dilution for existing equity to reach first production.”
The excitement lies in the nature of the opportunity for helium exploration and development in Montana.
Results from the appraisal well, which is expected to cost around US$2.5 million, will provide information on flow rates as well as help with the design of future production wells.
The data will also feed into an update to the company's potential reserve and resource base.
A helium grade above 0.5% is considered highly commercial by the directors.
“Here in this part of Montana, we anticipate commercial concentrations due to the fact that there is lots of uranium and thorium in the basement rock, which is a producer of helium via radioactive decay,” chief executive Bo Sears told Proactive recently.
After drilling, the focus will be on progressing to production with the processing plant estimated to cost around US$12.5-US$15 million.