Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
Cons:
Unable to trap and seal the helium
Unable to find production levels of helium, maybe because of really low purity
Potential government instability due to a new president?
Insurgencies and terrorist attacks disrupting production or halting it completely
I would say only the 4th point is a real potential issue, but this hasn't happened in Tanzania yet recently just across the border in Mozambique but I would like to think the Tanzanian government and army will want to protect valuable locations of interest. Even if that did happen, production may halt for a month or two and the SP will take a dip but production would just commence again eventually and HE1 could always hire security
There may be more cons but they're just some I could think of off the top of my head. I hope this helps new people here looking at HE1.
But a few interesting links to check out:
Comparing HE1 to competitors:
https://twitter.com/Belcourtoi/status/1374309150944071682/photo/1
Hannam and Partners report on HE1, these are the guys who expect an SP of £1.04 if these test drills go well in May:
https://mcusercontent.com/110d0aa5f5d9bf9478796664e/files/58194820-d910-4c75-b085-a151b97344ee/Helium_One_Initiation_note_Final_14_Dec_2020_RB2.pdf?utm_source=H%26P+Master+Contact+List+%28Sements+and+Tags%29&utm_campaign=78f95cbff0-EMAIL_CAMPAIGN_2019_05_20_02_05_COPY_01&utm_medium=email&utm_term=0_dd4f91613c-78f95cbff0-371771967
Very interesting report by HE1 themselves:
http://www.helium-one.com/wp-content/uploads/2021/03/21-02-26-Helium-One-Presentation_Feb21.pdf
More of a general report on helium such as pricing:
https://www.mercurycarbon.com/wp-content/uploads/2019/09/MCC-market-report-for-RHK-conference.pdf
Please also check out interviews with Helium One on the Crux Investors and Proactive
Not a problem mate. I found this that I made from a previous post which may help you and others.
This isn't a complete list but just items I can think of off the top of my head:
Pros:
Helium supply running low, America has restricted their largest helium extraction plant for federal use only which contributed heavily to global supply
HE1 has the largest helium reserve in the world, with a P50 of 138 BCF and a P10 of 521 BCF; in comparison, Blue Star Helium's P50 is 3 BCF and their P10 is 6 BCF (even their best case scenario is 5x worse than our worse case scenario, and they've seen a 1000% SP price increase) and DME's is probably not much more.
Global demand is growing at a rate of around 8-10% a year with this expected to rise considerably because of the likes of SpaceX who need helium to cleanse the fuel tanks of their reusable rockets. If Elon wants to make his dream of 1 million people on Mars come true, that's going to take an enormous amount of helium. One Starship launch will probably consume at least $12 million worth of helium (that's a number I gathered from a video linked here by Dai where they mention how much it costs for rocket launches in terms of helium). Also, bare in mind, for every passenger ship launched there'll be a supply ship launched as well.
Supply will be even more constrained as most of the helium extracted at the minute is as a by-product of oil and gas extraction which will slowly start to go offline over time.
Price of helium has jumped massively in recent years and even the high wholesale prices are no match to the end-user ($300 - $400 wholesale compared up to $1500 end-user price). So this trend may continue.
HE1's extraction will involve no release of hydrocarbons making it a more attractive investment for the modern investor
HE1 holds 100% ownership over their licences which span 4500km2, far, far more than their competitors
As Trek mentioned, the Tanzanian government are very much behind HE1 and have said that (paraphrasing) "we need a good new story, and Helium One is that good new story"
The data/evidence for helium being there, imo, is over whelming and from what how DM has talked HE1 have no concerns whatsoever about there being no helium there nor that they won't find production-levels of it.
A part of this data is the fact that helium has been found to be seeping to the surface at a concentration of around 10.4%, magnitudes more than from traditional oil and gas and higher than DME, who I believe found concentrations of 7% and 4%
The drilling contractor, Mitchell Drilling, will take payment of the 3rd drill as shares and have offered a 4th hole as shares as well and have brought in a bigger drill at no extra cost which will save HE1 $500k and 4-6 months as they can go straight to appraisal. A massive dose of confidence
Setting up production of helium is far quicker and cheaper than oil and gas and as they don't have to drill as deep, potentially less risky
The only worries at this point are whether the helium can be trapped and sealed; funding, contractor, seismic data, licences etc are all sorted (or maybe the environment permit I heard might not be? But I think they applied for it back in January so must be due soon). I think a lot of us here don't understand why it has a 20% CoS, seems incredibly low. Everything is pointing to there being a large reserve of helium there at Rukwa, even the drilling contractor has offered the 3rd drill payment as shares, an extra 4th drill as shares and are bringing in a larger drill at no extra cost meaning HE1 can go straight to appraisal saving 4-6 months and half a million dollars.
Personally, I wouldn't say this is even a risky investment; I would much rather buy in to HE1 than Tesla. Still, nothing is absolutely confirmed but when so many indicators are pointing to it going well and even the CEO who was in Tanzania, David Minchin, said that the team have no worries about not finding helium.
As for a few years, full production of helium at Rukwa and probably close to full production at the other two sites with maybe an SP of £5 - £7 maybe more. But that's just my personal bullish view, please DYOR
inthevoid not a problem pal, worked wonders for Tesla!
But yeah GME showed just how corrupted the whole system is. Melvin Capital, one of the biggest shorters of GME and the biggest investors in Robinhood.. Hmm.. Funny how Robinhood restricted people from buying any more GME stock. Melvin said they had nothing to do with it but do you think a bunch of billionaires are going to sit back and watch their millions fade away? Not a chance, a good few phone calls and fat brown envelopes were exchanged for Robinhood to do that
Please watch the video carefully, listen to the instructions and apply said instructions perfectly over the coming months/year or two.
https://www.youtube.com/watch?v=ZatKF-seDX8&ab_channel=CharlieGarcia
I can possibly see some big investors swooping in soon, just need to get HE1 out there a bit more but that'll come in time. I don't know, maybe I'm being hopeful and naive or maybe I'm being realistic, but personally I can see it happening. Any big investor will most likely be a very good investor and they'll soon realise the immense potential at play here
Just as a bit extra; we may see a small bull run soon. As the price increases and more people find out about HE1, people might feel pressured to top up their existing stake before it's too late. This may be compounded by the fact that investors may be less willing to sell (to buy in at a lower price) as they see constantly rise up
It's expected to go to 20p pre-drill, £1.04 post-drill, after that I would maybe say £2 - £2.50 when production commences then probably £5 - £7 once everything's fully up and running; all three licences are producing helium, strong profit is being made, maybe dividend being paid out. To be honest, I don't think £10 is an outlandish claim. £5 billion mcap for the world's largest helium reserve that'll supply 'green' helium to a market for the next century that'll constantly battle supply constraints as other far smaller helium reserves go offline as well as oil and gas sites? Doesn't sound like too bad of a price imo. Just have to wait and see though. I'm hopeful for £1 - £1.50 post-drill though
I was thinking more of the gas escaping, there's 10% purity but there could be 1 CF or 100 CF (I know it wouldn't be anywhere near that amount) escaping. All we know is that there's 10% of helium from however much gas is escaping. Underground sure, as you say, if there's 10% purity escaping and there's 1 TCF of gas underground then there's 10 BCF of helium
Thanks for the link Dai, fits closely with Canaccord's prediction but I barely trust predictions going off technical analysis, especially on stocks (forex, I guess). It can make a backwards diagonal twisting Bart pattern all it likes but if HE1 come out tomorrow and say they expect a Cos of 80% or something then that pattern flies straight out of the window
Thanks for the replies guys, much appreciated :) I'll take a look at that link Dai, cheers! I suppose the purity of the helium escaping and the quantity are completely different. There may be 10ish% helium concentration but it could be minute amounts leaking out. But yeah, given how much gas is supposed to be there I have no worries about it not going successful, just as HE1 doesn't either
Helium One have said that the helium at Rukwa is reaching the surface at a concentration of about 10.4%. Now.. is this a good sign or a bad one? By that I mean, does it show that there's really high levels of helium beneath or does it show that it may be really difficult for HE1 to trap and seal said helium since so much of it is escaping?