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Always interesting to speculate, skittish. The thing that doesn't sit right with me is if that was the case, why replace David Minchin?
Funnily enough I did consider the ironic circularity of HE1 using an airship to transport their helium to the port.
Airlander being the modern version they're trying to get off the ground, if you excuse the pun.
Much of it actually makes sense. Just needs a field large enough. No runway.
https://www.hybridairvehicles.com/
No idea about the geology.
But I take confidence form the senior management. David Minchin is a geologist at heart and is very credible. I highly doubt he would be playing fast and loose with the science.
For example, they estimate a purity of around 10%. With helium normally produced at a purity of 0.1%, why inflate it so high if it doesn't stand a reasonable chance of being accurate? They could say 5% and it would still be great.
Equally Ian Stalker is very experienced and well known in the mining industry. I can't imagine he would out his name to something if it doesn't stand a good chance.
Either way, I'm in and we'll see how it goes. SP doesn't matter until they get drill results.
As annoying as your purchase price will be, it'll be worth it.
Its still cheap. Excellent, well established company. The online will really make it scale.
Just a shame some silly sausage algos sold £20 worth of shares putting you in the red immediately
I've been in for a month or so. Just waiting for the market to realise how good this company is
All true
But as you said there is a rising demand. As countries in developing nations begin to rise Helium consumption will increase by quite a bit.
Not to mention that a decrease in prices would possibly may make uses for He that was previously uneconomical.
If I remember correctly from an interview with HE1 they said they would still be viable at $80/Mcf for He. Compare that against current prices of around $280/Mcf.
And they openly say they want to be a price setter with their (assumed) large reserve.
Politics may come into it too. With China's rise and a growing middle class population, I doubt they'll want to be dependant on one supplier for their helium. Especially if that supplier is Russian.
China is building helium mines domestically, but nowhere near of the scale they need. It wouldn't surprise me if HE1 gets a buyer from China if they find what they expect.
Add on to that the Amur plant is producing helium as a biproduct of hydrocarbons it has limited flexibility.
Perhaps I'm bias because I have invested in HE1, but assuming they find what they expect, I see a very positive future for them.
Obviously I can only speculate, but I would suggest it's because the high price of helium is a relatively new phenomenon. Also helium use has previously not been so large, now it's becoming far more intertwined in our day to day lives.
They're clearly interested now, but much like many helium plants the production is a bi-product of hydrocarbons.
https://finance.yahoo.com/amphtml/news/china-opens-first-large-scale-093000149.html
My ideal HE1 scenario is an offer from Chinese buyers in Q4 and they're not too concerned about price.
But maybe I'm living in dreamland.
Very nice summary
I got in at a blended price of 5.2p.
My ideal result, apart from the obvious confirmation during drills, is the company gets sold in Q4 this year for a tidy profit.
What do you think the liklihood is of the Chinese buying HE1 on the back of a successful discovery?
And at what price?
I bought at 5p
HE1 will go up and down between now and the start of drilling. It's SP today is broadly immaterial.
Even if it drops to 1p before they start drilling, I'm staying in. But I'll be topping up.
Assuming they find what they expect, the SP will pop.
I'm not concerned with short term fluctuations.
I agree.
Its unique position in the market means I would expect a higher p/e ratio. But it's hardly a great failure if it *only* becomes a £1Bn company.
I bought at 5p so feel I'm in a good position no matter what happens. But I fully expect the SP to bounce around between now and when they start drilling/get results.
Its a rare opportunity and a great business imho. The only major bump in the road will be if they have poor drill results. Otherwise it'll start to fly.
If I take your highest predicted SP of £2, it would make an mcap of £1.2Bn
They estimate to make around £100m worth of He pa with around £5-6m in costs.
So a 12x P/E ratio.
Does that not sound a bit low?
How is the SP at 7.4 and the bid is 6.9 and the ask at 7.1?
Obviously this being a unique business means there is little to compare it with.
But their hope is to create around £100m worth of helium pa with costs of around £5-6m after the initial set up
What would be a fair P/E ratio for the company?
I'm new to this, can you explain that for me?
Thanks
Indeed.
My schedule has always been:
Jan-Feb, seismic scanning
March - Processing the data Mar/Apr - Start drilling first prospect
May-Jul- continue drilling of the 3 prospects and publishing results / news along the way.
I don't think they're not on it.