HE1 SP and milestones π₯π3 Oct 2024 08:02
1 of 2. Here goes, PubCrawlβs analysis price target estimates:
Market speculation pre mining licence target 1.5p to 2p near term.
Licence approval: 2x to 5x surge: this could be anything from 3p to 10p.
Few years down the line based on a 10 BCF resource in Tanzania target 50p to 72p per share.
1. Demand and Resource
a) The global helium market is expected to grow, with pricing ranging between $200-300 per mcf (thousand cubic feet) depending on purity and location.
If Helium One is successful in securing a significant portion of the market (letβs assume their discoveries and reserves are proven commercial) this would greatly influence the valuation.
b) Resource Estimate and Production Potential
Helium One's Rukwa Project (main asset) has shown significant potential, but actual production rates and resource size estimates will influence future pricing. An estimation based on their recent surveys suggests the potential for high-grade helium resources.
If HE1 can extract 10 BCF (billion cubic feet) of helium over time, that would suggest revenue of:
Let's assume they operate over a 10-year period, generating approximately $250 million per year.
c) Earnings Estimate and Market Capitalisation
Once fully operational, a profitable helium producer typically trades at a price-to-earnings (P/E) ratio of 10-15.
Assuming a 30% profit margin (common in mining) on $250 million annual revenue, the net profit could be $75 million/year.
A typical valuation would be based on the market cap.
d) Shares Outstanding and Price Calculation
Helium One currently has about 850 million shares outstanding. Using a market cap calculation (not going to bore you with that):
This converts to approximately Β£0.72/share (assuming 1 USD = 0.82 GBP).
2. Technical Share Analysis:
technical indicators, trends, and resistance/support levels for HE1 shares.
a) Moving Averages (SMA/EMA)
Simple Moving Average (SMA): The 50-day and 200-day SMAs can provide insight into momentum. Currently, HE1's price might be trading below the 200-day SMA, showing bearish sentiment. However, a positive fundamental event like a mining license can often lead to a significant upward breakout.
b) Relative Strength Index (RSI)
- If the share price is heavily oversold (with an RSI under 30), it could rebound sharply once positive news, such as the mining license approval, is announced. We could anticipate a 20-30% rally just on technical grounds, irrespective of fundamentals.
c) Resistance and Support
- The 1.06p level represents a key support. Recent historical resistance levels might occur around the 1.5p - 2p range, representing a possible near-term price target with licence anticipation.
Cont.