focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Thanks for looking out for me Dai :) Yeah it was me asking about CFDs however the only that lists HE1 is ig.com I believe and unfortunately I didn't get accepted, even though I've been accepted for about 5/6 other sites (used to only use T212 but they changed their margin requirements and also really restricted CFD traders so I went elsewhere and tried different websites).
Just read your post on the other forum alfred. They are very risky and the slightest bad news can really screw you but on the other hand unless you either find stocks like this every week or have huge capital (tens of thousands) I don't think you'll make huge sums of money but that's probably because I'm so used to having leverage
Yeah there's definitely that risk there but Tanzania has a considerably bigger army (still nothing massive though to be honest, 11,000 vs 27,000) but Tanzania's military budget is also more than 3x bigger, so hopefully this equates to better training, intelligence, equipment etc to ward off any possible attacks. Plus, although Tanzania's population is 56 mil vs 30 mil, their GDP is around 5x more. Hopefully, these factors bend the prospect of an attack away from reality. Plus, I would be pretty stunned if they bothered to attack a drilling rig in the middle of nowhere far away from large populations of people and thus the headlines
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
As Lord Trek said, to anyone new here there seems to be a myriad of positives with few negatives:
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
(running out of characters :
Yeah I suppose it is risky business even despite the obvious potential with HE1. I'll probably just stick to my ISA. I just think, along with a lot of others, that this is like a once in a lifetime opportunity; for it to be so cheap, with so much potential that seems to be near enough confirmed already. But, you get burned when you get greedy :) Thanks for the help Wolf, hopefully we all make a lot out of this and well played to the likes of Trek who have half a mil to a mil of shares :)
Wolf, thanks for reply, appreciate it. I'm a bit familiar with 100% margins, I'm sure that's what T212 did back in December which resulted in me having to sell off, move elsewhere and get severely burned as some out of the blue, awful news came out and I no longer had a large green cushion for the price to fall in to :) Thanks, I'm might just stick with holding the stock then
Noob, I believe DME drilled two holes, one showing 7% concentration and the other, 4%, but I could be wrong.
lsetown, I would be amazed if this doesn't reach £3/£4 at least one day because of the points dai mentioned. Might not be massive, but the demand is growing fairly quickly and is set to grow even faster in the future. £5 SP would equal to £2.5 billion mcap, sounds pretty cheap for a company that holds the biggest reserve of helium in the world which can supply the market for the next century helping to drastically improve medicine, maintain our technologically-advanced civilisation, help us reach the Moon and Mars in mass droves, potentially unlock a whole new, clean and powerful energy source (fusion power) etc etc. Meanwhile a scooter and bike rental company also has the same mcap haha :P
Imho, the 20% CoS is pretty far off as it's borderline confirmed helium is there, a plethora of research, data and analysis pointing in that direction, the only issue now is confirming how much is there. The entire Rukwa project has a P50 or 138 BCF, which is a tremendous amount, but this is also over circa 3500km2; the three possibly four holes they'll be drilling 'only' equal around 18 BCF (still many times more than other helium company's entire reserves). Seeing as even 1/2 BCF, I would say, would make it viable to commence production, I think there's a high chance of them finding a good quantity of helium. If the research showed there to be 2-4 BCF I would be a bit worried but with such a large pocket of what is believed to be helium, I personally don't think there'll be an issue finding any. From what David said, nor he or HE1 seem to have any worries either and the fact that Mitchell have said they'll take the 3rd and 4th holes as shares is a great boost of confidence - just because they advertise it on their website, doesn't necessarily mean they'll offer it absolutely anyone. They would only choose companies they believe in else they wouldn't be drilling for much longer haha
There are other aspects to factor in, David said the depth they have to drill down to is far less than natural gas (1200m vs 10,000m I believe?) meaning that potentially far fewer obstacles (along with being cheaper and faster), production is far cheaper and quicker to setup, I believe they can capture the nitrogen that'll seep out also as that can be sold for a profit (although they've not mentioned that they'll do this and I could be talking out of my arse) and there won't be any hydrocarbons at play here (I'm assuming because these holes will be too shallow) which is becoming more of a positive for companies these days.
In terms of how the future of HE1's SP could be, I would recommend having a look at this: https://twitter.com/Belcourtoi/status/1374309150944071682
Not a complete table, nor is a great apples to apples comparison but it can give you a rough idea. DME, for example, have seen their SP rise from 0.2c to $3 in 1 year on the back of them proving there to be helium at their prospect. Although I'm not certain as to how much and have only heard/read vague suggestions, I believe it's a fraction of what HE1 has at Rukwa alone; more than likely less than these 3 test sites on their to be honest.
Sorry for the long post, just thought I would throw my opinion in. I too struggle to see the risks as so much encouraging news constantly flows out and I'm only a simpleton so it's best to see what the likes of Trek have to say
Just wondering if anyone here has HE1 stock on a CFD account? And if so, what site have you used? I'm not looking for a lesson on the risks, just wondering if anyone else has gone that route and what website they've used if they have. Thanks
This sounds exactly what the US would do. You never heard of Project MKUltra? Or the one where they infected African Americans from like the 50's to 70's with HIV just to see what would happen? America is just as corrupt as places like Russia, they're just more covert. Did you not know about the CIA in the 60's proposing to JFK to blow up an American airliner over around Florida (filled with American citisens) just to start a war with Cuba? Sounds awfully similar to something that actually did happen.. Or what about the CIA smuggling drugs for the cartel? Well-known figures who died under obviously dubious circumstances (Epstein and Michael Hastings, for two)? The NSA spying on absolutely everyone?
Why does it matter if he doesn't? Far more than just the vulnerable have been vaccinated in the UK, we should've exited lockdown a month ago. I don't want to come out with negativity but this has been one major over reaction, we can't keep carrying on like this. The government have just used all of this to pay their families and mates millions and the media have loved it from the beginning because they just scare monger the population and so many lap it up. No I'm not a moronic anti-vaxxer, can't wait for mine, but we need to get over this pathetic mania that's swept the world; more people have died from smoking this past year than from Covid and we've had flu winters just as bad as this past one. This is the only comment I'll make about this
Golf, I'm kind of like you, I don't have the technical knowledge like some on here to really add something juicy to discussions. However, to answer your question, from what I've gathered they're basically using the old sets of data (from the 50's and I think 80's) and using their current data to back these claims up and vice versa. But they could be doing their current infill seismic study to fill in the gaps left by the older bits of data they have
Thanks for the replies Noob and Dai, hadn't thought about it that way, that's a good point. I was looking at it thinking people were expecting the SP to top out at 15p or something haha but good points, I stand corrected!