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Nothing wrong with raising cash at ever increasing share price. But the recent placement of 2 Billion shares at a quarter of a pence was terribly harmful to LTH. Just about killed them in fact.
Well they should do flow tests and pressure build up tests at Itumbula 1 and try to prove up helium reserves and also commerciality. They should do some additional work on hydrogen as well. They probably do not have enough money for an Itumbula 2 appraisal well.
They could also haul their Predator rig over to Tai 3 and drill through to the fractured basement and do more complete testing of that well. They would have done that at the time but for the broken rig, and not having enough money to complete Tai 1 and drill Itumbula 1.
BUT most importantly, they should be working to figure out how they will finance the next stage that will get them to production and sales. They will need a JV or an offtake agreement or some government funds. Noble has that step all planned, Helium One should be working very hard on this.
Walkley: Hydrogen not very important - there are two atoms of it in every water molecule! More interesting is the 80 degree temperature found in the hole a possible geothermal energy resource.
It takes a lot of energy to convert methane or water to hydrogen. You can use natural gas but that releases CO2. Or you can use wind energy or solar or hydro to power hydrolysis. I think they call that green hydrogen. But a direct source of hydrogen from nature (white hydrogen) is valuable because it requires no additional energy to produce.
....short term, medium turn, long term. We desperately need to break out of this long brutal downtrend that began in May of 2021, then stabilize at a bottom. and have a nice reversal into a sustained uptrend. Not seeing that as highly likely. The downtrend is still powerfully intact. It will be three years old (long) in three more months. So discouraging and depressing.
Onsolidground: Triumph1 they will go back and redrill Tai fully and this time drilling fully into the basement and they will imvho get their next big payday of Helium.
Lets get to the exciting news on Itumbula first with those the flowrates, resource estimates, timescales and roadmap to commercialisation as you point out, then we can hopefully all just sit back and let things multiply.
Completion and flow rates and pressure tests and reserve estimations at this well will cost a lot. Going back to Tai 3 with the predator rig and drilling through the fractured basement and then doing all the testing as for Itumbula will cost a lot. They have no money. They need a JV partner, an off take agreement, or a cooperative agreement with the government of Tanzania or with another sponsor such as the US government. Now we will see what they can do. There last play to stay alive when they ran out of money essentially wiped out all their long term shareholders who were unwilling to double down with a high risk and likely imprudent second bet.
Am60. You are only really happy if you averaged down at 0.25 pence. Otherwise there was so much value destruction from 2 billion shares at 0.25 pence that you cannot be down only 50%. A 97.5% drop has to be followed by a 4000% increase to get back to even. We still have a ways to go for the LTH who simply kept their intial stake. I did add 500,000 more at near the offer price but that was a very risky thing and really was not fair to LTH to make them choose to do that or simply forfeit most of what they had invested. Now the next question is how they will structure the next step in their development - to the benefit of shareholders, or just another round of value destruction. They have options but it will take some skill to pull it off.
Pulsar has a discovery well from 2011. They are doing an appraisal well. The geology is also simpler. As is the path to production if a commercial discovery is proven. It will all play out in a month.
Noble has a clearer path to production (at least according to them) if they do find a commercial discovery. Kent Masters (CEO of Albemarle) is a key early investor and can help with that process. They will get someone else to build a plant and handle the output. They will take a lesser price but will have revenue. They have some tentative plans and agreements, just have to prove commerciality.
Meanwhile Helium One has an exciting well. Really amazing with free flow of 4.6% helium gas plus free flow of hydrogen, plus some argon and some hot water to generate electricity. But they just trashed all long term holders with a 2 billion share sale at 0.25 pence. So god knows whether they have to expertise to get the right partnership or off take agreements or government support to move ahead without further destruction of the shareholders. What they did was awful. The well is wonderful. There is a bit of uncertainty about how they handle this moment.
Scott what did you think she was going to use to pay for taking it commercial - buttons?
Noble has a deal all in place (if they prove commerciality) for an industrial gas company to provide a plant and handle everything from there. They will get a lesser price but they will be able to monetize a commercial discovery if they get one. One of their key early investors is Kent Masters, CEO of Albemarle who knows who knows how deals like this are made at certain stage of development of a resource. So does Justyn Wood for that matter. Helium one has got to use their board and executive team to quickly forge a path and communicate it. There are a number of options.
The bigggest mistake CEO has done is she admit, finance needed further after this drilling and everyone aware of that, how big it needed for this to get next commercial level.
Yes and they shafted the private investors to raise very little money. Hope that does not play out the same way this time around. I would rather get a partner or a off take agreement or some financing from Tanzania for a percent of all production going forward, or even a deal with US that is throwing money at potential new helium supply like the Virginia plant of Regeneren in South Africa. Or sell the whole company to a Total/AiLiquide joint venture for 300 million pounds.
276k total trading volume for total of US$ 8280. That in contrast to London where over 1 BILLION shares have traded.
Shares are up about 100% at US$ .0375 (about 3 pence) but you cannot buy any there that I can see. Share price just simmering, following London for most part, and waiting for some clarity on funding of next steps I guess.
Linde has been mentioned and is investing heavily in helium and in green hydrogen.
Total Energies has operations in Tanzania and is partnering with Air Liquide on green hydrogen projects. Air Liquide is a leader in helium gas industry. Total and AirLiquide are investing in LNG plant in Tanzania costing many billions.
US government has increased its loan commitment to Regeneron for the Virginia helium plant in south africa.
Target was Holbrook basin in Arizona which produced primary Helium from Pinto Dome for many years and was touted as the "Saudi Arabia of helium." They drilled some wells and built an expensive processing plant powered by a big solar complex. Then the wells would not flow, they couldn't get permits to do recompletions. The dismantled the plant, bought a marginal natural gas field in New Mexico, moved the plant there, have some natural gas wells with elevated helium levels (still under .5% I think), are trying to extract the helium with their plant and sell the natural gas. The big shift all happened suddenly, it is kind of a weird project, who knows if it will work. Management a bit odd too. They are not on the edge of BK at the moment, but nothing there that appeals to me anyway.
Trolley Dolly: You would be amazed at how many people do not understand that. They are very happy to see a share jump up 50% - after a 50% fall. Many of them could do the calculation if they put pen to paper or entered the numbers into their calculator or spreadsheet. But still they seem to be happy to see that example play out.
ShipweckSheep: You are totally right. But averaging down in a truly desperate situation is a difficult choice. It can be throwing good money after bad - or in the case of massive dilution trying to catch a particularly deadly falling knife. If Lorna does pull a rabbit out of a hat and proves a commercial discovery with this well, then averaging down will prove after the fact to have been a hugely good idea. In fact I did do that in this case, adding over 500,000 shares at or slightly above the placing price for total of about 1500 pounds . But my new basis is US .04 cents and I am still down 84% after today. I almost certainly will not come out even here but I may recover a portion of my losses. A LTH with a sizable position could not be rescued by the placing without a very sizable ante. In my case to reduce my basis to 1 pence I would have had to buy 1.6 million more shares for another 4000 pounds at the exact placing price. If I had done that I would break even if the market cap jumps to US $35 million. As it is I need a market cap of US$ 140 million to break even. That difference was not worth an extra 4000 pounds to me at the time as I was not sure the company would be able to survive. I'm still not positive of that. But a commercial well would make everything look so very much better.
It is very good to have positive news and a rally. But remember the math. If a stock goes down 50%, it has to go up 100% to get back to even. I learned that early in my investing education. But if a stock goes down 95%, then it has to go up 2,000 percent to get to even. That is a huge hurdle and why massive dilution really destroys long term holders and benefits only the ones who buy in with the massive offering of cheap new shares. The majority of shares of He1 now outstanding were purchased at 0.25 pence. That makes it a massive hurdle for anyone who bought in at 5 pence (they are down 95% and have to bounce 2,000 percent to break even) and worse yet for those who bought at 10 pence (they are 97.5% and have to recover 4,000 percent to break even.
At 1 pound the market cap would be 3.4 billion pounds, about half of the projected global helium market in 2030. Cannot happen without a reverse split. 5-10 pence could happen but even that a stretch goal. A buyout price of 3 pence would be a market cap of 105 million and give the majority of holders (who bought in recent placement) a 12 bagger. A buyout price of 5 pence would be market cap of 175 million and would give majority of shareholders (buyers at placement) a 20 fold return. That seems possible if Helium One discovers a huge commercial helium resource. Anyway any potential for LTH who bought in double digits of pence to have huge returns has been dashed. Nonetheless it is ALWAYS nice to see a strong rally based on (hopefully) exploration success and contribution to development of a major new resource industry in Tanzania and the culmination of a long dream. Sure a heck of a lot better than failure and BK and vultures picking at carcass. Congrats to all shareholders (unfortunately to some more than others - those who just bought) and kudos to Lorna and other principals if this second well proves commercial!