Member Info for skittish

P9, I don't think it was all BS, although it may appear so in hindsight.

I think things have changed as matters developed. Clearly going for the mineral rig last year to save money was a mistake, as was going for drilling immediately after the 2nd fundraise, following the IPO just a few weeks earlier without doing all the proper preparatory work first.

With hindsight they should have waited, done the prep work then raised and got a decent drill, leading to a discovery.

They got way too carried away, hence the news blackout this year.

I think they have learned, but have to do things cheaply in order to stretch out the $9.7M, without raising cash. Hence all the chopping and changing. And there was to be some more investigative work in Q4, that now looks to have been binned.

If this is correct now is the time for DM and IS to put their hands in their pocket (to the tune of a total of £100K+) and buy a load of shares - I think only that would restore investor confidence at present.

Maybe they will, maybe they won't, but then you have to take a view depending on which alternative arises.

DM did an interview around 1-7-22, and the transcript was published around 5-7-22 - there was a difference between the spoken interview and the transcript. There was only a one word difference but I though it was telling, and on 14-7-22 I posted this -

"PS. - there is a difference between the written transcript and the verbal recorded interview - can anyone spot it?"

No one took me up on the challenge (pity), but in the spoken interview, when DM was asked are you ready to drill in Q3 2022 DM responds "Absolutely, blah, blah etc..." In the written transcript, no doubt okayed by the lawyers, the "Absolutely" is missing, everything else in the interview is the same word, for word, but the lack of "absolutely" makes DM's reply much less certain. It was then I began to doubt. I think he knew then that a 2022 drill was starting to slip away.

The last RNS is fairly anaemic, which is why I think they need enough cash to get through to May/June 2023, as that is when the drill will take place. May work to their advantage if gas/oil prices are much lower then.

But a substantial director share purchase (or not) would be a sign.

Will see how this plays out.

Over and out.

https://www.youtube.com/watch?v=jr0JaXfKj68

Well the RNS was much as I (and a few others) had expected.

Just a few thoughts at this slightly stressful time (FWIW, IMHO,DYOR etc).

Firstly it is always darkest just before dawn.

Secondly, you have to be rational. The share price is likely to fall further, if only for the boredom factor, and some seeking rewards elsewhere.

Thirdly - target date 1/2 2023 could be illusory also. If they pull that off (and they could) they would have to drill between the two rainy seasons, mid November - mid January and mid March to May, or wait for the dry period June to October - although the third year of La Nina in 2023 could extend the dry periods.

So they are now proposing, a mobilization, drill and packing up in the 8 weeks between mid January and mid March - remember, as I've been saying for a while, it is one well only, Tai-3. This is hinted at in the RNS. Risky but maybe achievable - just, if you restrict drilling to 4 weeks or less.

Fourthly financial stress - going into 2023 without a fundraise...They had $9.7M left at the end 2021. Mid 2022 financials not out til February 2023. Winging it - licences cost around $750K pa, $1.5M for 22/23, less $300K saved, results in $8.5M.

Admin and expenses say $500K pa, to mid 23, leaves you with $7.75M. Doing up this rusty rig, say another $1M, leaves $6.75M.

4 months drilling in 2021 cost around $5.5M, so maybe 2 months and you could get away with $4M? So 2.75M spare, but maybe I'm being optimistic.

Nothing in the RNS about being "fully funded" - remember they can't raise cash without a GM to issue new resolutions, so the jury is out on that at the moment, but you would be looking to raise at somewhere between 3p-4p. BUT they ruled out ANY raise for cash at the AGM, and much in today's RNS about "low cost" etc., a sign of financial stress, maybe.

Fifthly - the licences - they've given up nearly 50% by area. But it appears they were nearly all underwater, $50M+ per well to drill there, no one is going after those licences, unless they've had a lobotomy esp. if He1 retains the shoreline. That is why much of Nobles area is rubbish. And renewal of the other licences appears automatic - see previous post.

Sixth - things change. If Ukraine wins the war by Spring 2023, increasingly likely and maybe sooner, and ejects Russia from all territory, including Crimea, then oil and gas imports from Russia are likely to resume, provided Putin has gone, thus reducing prices and stress on drilling services. The West would need to support Russia, lest it disintegrates into its 168 constituent parts, and provide them with cash to do so. Note Azerbaijan attacked Russia's ally Armenia 2 days ago in an all out offensive, reckoning Russia is in no position to do anything about it. Oil/gas/drilling prices could have fallen substantially by early next year.

One well only, Tai-3, the discovery well - it that doesn't work, well...

https://ibankcoin.com/flyblog/2022/09/10/major-shift-ukraine-war-favor-nato-means-stocks/#sthash.Ibmxsyf0.dpbs

I do think the licence matter is a red herring.

The CPR states at page 78 "There are currently no mandatory relinquishment requirements on the Licences at renewal."

So provided He1 complies with the terms it appears that they will be automatically renewed - the terms are pretty straightforward, apart from various administrative matters, He1 has to spend not less that $100 per annum per square km within the licence. I'm sure they have done that. It isn't a high bar.

In the AD He1 set aside $740K for "Licence Fees" - it is not clear what exactly this covers, but presumably it is all the rents and renewal fees over the next several years, or at least applying to the schedule of Prospecting Licences set out in the AD.

And the licences appear not necessarily renewed prior to the renewal date for instance at the time of the AD dated 13-11-2020 licence PL10723/2015 expiring 25-10-2019 was still awaiting renewal, and I'm sure had it not been renewed we would have heard about it.

The rig I'm sure is a more difficult problem, no news as yet, but as I've said previously phrases in the last RNS such as "There are no major failures identified to date" unnerved me, and set the bar so low as to leave me wondering if the rig would indeed be ready for 2022. I'm normally sanguine about such matters, but time is running down rapidly (if it hasn't already run out) if they are to drill and be packed up before the rains - it is all a question of risk.

As for inflation, and it driving interest rates up, thus the market down, that has been driven partly by the end of the pandemic, but mainly by high gas and oil prices resulting from the Russian invasion of Ukraine, and Russia subsequently cutting off the gas to Europe.

That has been the main recent driver.

Drowned out by news of the death of HM The Queen is the collapse of the Russian Army in Ukraine in recent days.

In a brilliant strategic move, for months Ukraine suggested an attack would come in southern Ukraine, Russia as a result transferred large numbers of troops there, they were then blasted by MLRS and are now largely trapped, and Ukraine has now attacked the weakened Russian lines in the north.

Ukraine appears in some areas to be advancing at around 50km per day, completely overrunning all Russian defences, with what is left of the Russian Army is in full retreat. Some are asking why would Ukraine stop its advance at the Russian border, albeit the US would insist?

If Russia retreats from all of Ukraine and its pre 2014 borders, would Putin survive and would the cheap gas then flow again, thus reducing inflation to its earlier 2% target? Maybe - No and Yes.

That would restore a bullish stock market, and a rising tide lifts all vessels, even He1.

"There are decades where nothing happens; and there are weeks where decades happen"

--Vladimir Ilyich Lenin.

Now expecting a drill in May 2023, but got the firepower to deal with that.

DYOR, All IMHO, etc

As of 4 days ago there was no change at the Tai-1 site, another image should be beamed down later today.

Secured rig, but for May 2023.

As I was typing I hadn't noticed that they were tanking as well...

Mmm, maybe they are out of time, or just a few getting very jittery.

When I said halving I meant from around 7-8p, so maybe we are partly on the way there now.

End of the month, or maybe before will be the moment of truth.

AP,

Whilst they may still pull off a drill in 2022 it is beginning to look unlikely.

On my previous theorised timeline of some time ago with a mid September for mobilization, to be packed up by the end of November, with a two week contingency before the rains, moving and drilling at a fast pace - well, we are almost there, and that timeline does not allow for any delays or difficulties, which I think in reality would be inevitable.

So it looks like a drill in May 2023, if everything is set up in advance, we could spud the end of May/beginning of June, with a result by the end of that month.

As to the cash position can the company make it that far?

$9.7M left at the end of 2021, so you need to get over 18 months mileage out of that money, and a drill.

Since the beginning of 2022 the company has actually done very little except for trying to get the drill ready, nearly all the previous expenses relating to interpretation and seismic appear to be accounted for in the 2021 accounts.

Admin expenses in the final 6 months of 2021 were $1.8M - so 18 month at that rate (to get to end June 2022) would cost $5.4M, together with the costs of drilling likely to break that bank.

But of the $1.8M, nearly $800K were a share option expense, which is really an accounting matter, compensated elsewhere in the books, actual salaries and wages were $227K, professional and consulting fees (some, possibly much related to the drill and seismic interpretation) were $578K. Strip much of the latter out and the He1 could be running on as little as circa $500K every 6 months.

If under some unknown deal you are shelling out a couple of $M upgrading and recommissioning a slightly battered drill rig, then just maybe you can stretch out the funds to last you over that 18 months and get a single well drilled as well.

Drilling the 2 wells in 2021 cost around $5M, so if you've done a deal on the rig, you could have enough to get you over the line, with a couple of $100K left to spare.

Of course, maybe I'm looking at things with rose tinted glasses, but I think DM and IS have done their calculations and believe that even with a mid 2023 drill they can get over the line without raising more funds. But next accounts aren't due to 2-2023, so we won't know what the true position is until then, and even then it will be out of date.

With a RNS of a delay to May 2023 the shares could halve short term, whilst all the short termers exit. Derampers would also play to the crowd. 9 months is an eternity to some.

But if you reckon DM and IS have done their calculations correctly, and know what they are about, then that could be an amazing opportunity.

I suspect we'll know by the end of the month.

All IMHO,DYOR etc...

Yes, TTS.

I think the attitude to DM and IS in not wanting to, and appearing to do everything they can to avoid, issuing new shares for cash to fund the drill is telling. Hence the jumping through many hoops, and taking a lot of flack, getting an old rig into working order.

They have around 30M shares and options between them and if they truly believe that they had a "discovery" in 2021, why would you want that diluted heavily to fund an unnecessary 3-4 well drilling campaign.

The only people who would really benefit are the city sharks putting say £10M new money in at 3p-4p, when (in the theorised view of DM and IS) it is an odds on cert. that Tai-3 will be the discovery well.

The additional wells funded by the £10M would be unnecessary, as it would be Tai-3 which would give you the discovery, and the other wells would therefore be superfluous for discovery purposes, but the end result would be that they would have diluted their 30M share windfall.

Provided they have enough cash then a single drill campaign, whether it be in 2022 or Spring 2023, is the way to go.

I expect even if the drill is delayed until 2023, they would initially just go for Tai-3 at that stage.

After that everyone can raise at much higher prices to fund a full campaign in Autumn 2023 or whenever.

That Noble, who appear less advanced, are willing to give away a large chunk of their interests to fund the drilling, whereas IS and DM are not is telling IMHO.

And He1's acreage is vastly easier to drill anyway, being mostly on dry land as opposed to underwater.

Awaiting the RNS, but could be a while yet.

Yes, looks like there is a bridge at Kasamba heading NW instead of SE to Mbeya,, but looks like a journey of at least 300-400km through the mountains, but you'd still have to get your heavy equipment out, and it looks like a trek.

Lets see what the next RNS brings.

ITV - but it is a question of risk.

The rains may likely be delayed, or they could be on time.

Get it wrong and the company is finished - would a competent CEO take that risk?

Yes, they do need renewing.

I would expect that they would be renewed, provided He1 can show they are making progress, even if it is not as fast as some shareholders would wish. Everyone wishes it would be quicker.

But if the licences were not renewed, after He1 has carried out quite a bit of work, then I think it would send the wrong signal to investors generally.

And I think the Tanzanian Government wants to be friendly to miners generally, if it can be, as illustrated by this article.

https://www.miningreview.com/base-metals/tanzania-a-new-dawn/

Of more concern maybe would be the costs of renewal, bearing in mind money is tight. That $9M or so at the end of last year is having to go a long way, but DM appears resolute in not issuing more shares.

Hopefully that, and a positive bank balance will survive the winter and the rains...

AP is exactly right.

I don't post often these days, as the last RNS was something of a disappointment (more on that later), but if you believe you had a "discovery" at Tai in 2021 why would you drill anywhere else, especially when everywhere else has had less seismic and other attention.

Remember the "#discovery" tweet which was quickly taken down last summer - if DM truly believed he had a discovery, he wouldn't drill anywhere else, and he certainly wouldn't take a "scatter gun" approach to drilling other prospects which have barely been evaluated.

I haven't posted much recently as the last RNS, 2-8-22, some 5 weeks ago now disappointed me.

Phrases such as "There are no major failures identified to date" set a pretty low bar (couldn't get much lower) for what might be considered to be a success. It was also the only RNS which didn't specify a target date for drilling - I know it contained the words "planned 2022 drilling campaign" (only once mind)- but that phrase is actually meaningless when the body of the RNS contains no target date - when those RNS's previous to it have included such.

As for Noble, and whatever they may be doing, it is worth noting that something around 90% of their licence area is underwater, another 5% is on a precipitous slope, and about 5% is readily accessible. Heritage stated in 2013, when they were prospecting for oil around Rukwa, that the cost of drilling a single well in Lake Rukwa itself would be $50M+, so whatever Noble may be doing I know whose acreage and prospects I would prefer.

In previous posts, from May onwards cautioned against expecting any real news prior to the end of August (not that anyone was listening), but now in September time is very short for a Q4 drill and pack up before the rains.

It is all a question of risk, rains are mid December onwards, so you need to be packed up end of November. Start packing mid November, 4 weeks drill then spud mid October, means mobilization mid September. Tai-1 took 8 weeks to drill, with 6 weeks mobilisation, so the above timeline assumes everything done at a very rapid pace, with no mistakes, and no contingency.

Risky if you want success, and you can't take the risk of overrunning.

But it isn't just a question of it being a bit wet and muddy, if you take the risk of going into the rainy season.

This is an image of the Tai-1 locality.

https://www.flickr.com/photos/194934344@N06/52335108767/in/dateposted/

You can see Tai-1 and the E-W road along which all the supplies come from Mbeya 80 km away. See the river it crosses, and the bridge?

Well you can't see the bridge, cos there ain't no bridge. It is simply a ford.

Come the rains, and the river in full flow Rukwa (and Tai) are cut off, unless you want to take a 1000km+ detour back to Mbeya.

Not only is all your equipment stranded, so are all your men.

Continued/-...

Continued/...

So they are almost out of time, but maybe not out of money, and whilst I don't know how much $ they have left, they may still be able to drill in 2023, without a funding.

Remember one drill only is required, something I seem to have been repeating for a number of months, but again seems to fall on deaf ears (see previous posts as to why it is only one drill).

I suspect expenses have been well cut back, all the hangers on and new staff with fancy titles will be able to put something flash on their CV's, but I suspect they are called upon as need and at present they aren't needed, so cost nothing.

But if you are a company (say Company "A") with a bit of an old rusty rig, unused for many years, in some way out town in the back end of East Africa, then you are a company with a worthless asset. You may not have the money to do it up, or maybe not the inclination.

But if another company (say Company "B") comes along and says we'll put in a $1M or so, we will do up you rig, if we can have it for say 6/12 months for free, then Company B gets a rig for "free" albeit with risk, and Company A will have a asset worth something in around 12 months.

Throw around a few million shares, which you are authorised to issue, but not for cash, and you could have yourself a deal.

But Company B has to go to a lot of trouble to get themselves a rig that is in working order - but it is cheap, maybe even free, but possibly subject to delays.

It can get you over the line, but maybe not in exactly the timeframe you had originally wished.

Patient folk like Aim shareholders are, will understand.

Play the long game.

Assuming the gas is there in commercial quantities in the first place, of course.

"#discovery"

I await the next RNS with interest.

Dai, any authority to disapply only lasts until the next AGM, so after the last AGM there is no authority to disapply those rights.

They chose to tie their own hands, whatever the reason for that may be.

Very few shareholders voted at the last AGM, a small percentage of the total, so they could easily have got the disapplication vote passed if they had proposed it.

So they obviously have a plan, but whether everything is going according to plan we will no doubt find out in the next 5 weeks or so.

Dai, KO is exactly right about pre emption rights - which I've been saying actually for quite a few months, since the AGM, which nonetheless is ignored by those trying to promote placing worries.

UK company law imposes pre emption rights on companies, but He1 is not subject to UK company law as it is registered in the BVI.

BVI company law allows a company to issue if unlimited numbers of shares without reference to existing shareholders, allowing them to be diluted ad infinitum, and ultimately, possibly be ejected from the company. That is one of the ways in which oligarchs in Russia gained control of some of their assets.

No UK investor would invest in such a company so, He1 had to incorporate pre emption rights in their memorandum and articles - so no new shares for cash, unless first to existing holders.

At the last AGM there was no disapplication of pre emption rights - so they still can't issue shares for cash, unless first to existing holders, unless they call another GM.

But they can issue up to 200M shares other than for cash, ie. for services, whether it be for drilling services, rig rental etc., suspect that is how they will square the financial circle, that and the really unusual process they are using for acquiring the drilling rig.

I haven't posted much recently, and the last RNS unnerved me a little. A few more days and we'll be in what I would call "extra time" otherwise known as September.

Haven't sold any, but have plenty of fire power which ever way the cookie crumbles; the gas is there it is simply a matter of getting it out in commercial quantities.

Not much to ask ;-)

PRIM has staged something of a slight recovery from a very low level recently.

Mr Samworth was appointed a director of ALTE on 20-7-2022.

It appears that he was appointed a director of Dominvs Group around 11-7-2022 -

https://www.propertyweek.com/news/dominvs-group-appoints-former-cbre-boss-samworth-to-board/5121249.article

Nothing at Companies House as yet -

https://find-and-update.company-information.service.gov.uk/company/07746921/filing-history

The family running that company are worth around £500M -

https://en.wikipedia.org/wiki/Sukhpal_Singh_Ahluwalia

ALTE appears, possibly well connected .

No linkage of course, but possibly well connected.

T321, if you look at the top of the column which has the figure of 0.098987 in it is titled "price paid per share". So as PRIM can convert at a fixed price, that appears to be the fixed price they are paying for all the BMN shares, irrespective of the price in the market.

If they are then selling the shares, at the present market price they are making a loss as the current market price is 6.10p.

However the latest accounts dated 10-6-22 showed that PRIM had converted 4,157,637 BMN shares (the same number as presently on the PRIM website) so it would appear that the conversions have ceased for the moment, and indeed actually date from April 2022.

On 26-4-22 I posted on here -

"The conversions so far are

6-4-22 - 2,069,063 for £204,810 = 9.89p (agreed price)
26-4-22 - 2,088,582 for £206,742 = 9.89p

On 6-4-22 the BMN price was between 11.5p and 13.1p so had they sold that day they would have made a tidy profit. Did they sell? I'm not aware but volume on 6-4-22 was quite high by recent standards. Would be more difficult to make a quick turn today, price currently 9.8p - 10.0p, but I would guess the decision depends on whether they "need" the cash."

So it looks like PRIM likely made a decent profit on the first conversion, maybe a small profit on the second, but now the BMN price has slipped significantly below the conversion price the conversions and sales have ceased, PRIM hoping for better times.

It is also worth noting that the p/e ratio of the S&P Metals and Mining index is 5, which is a 25+ year low, and equal to the low during the Great Recession and financial crisis of 2008.

In 2003, 2011 and 2017 that p/e was above 30.

Given the current market conditions and geopolitical matters then PRIM's timing for the BMN investment and others may not have been the best, however the S&P 500 M&M index p/e ratio can show wild swings over a period of less than 12 months, so what appear duff investments now, could be tomorrows spectacular winners.

It is all a matter of timing, and this may partly explain PRIM's present day crackers share price.

Well I think that might be due to PRIM being a small company, with fairly illiquid shares, operating in a macro environment where there is a large war in Europe, the potential for war in Asia, the US economy possibly contracting, and interest rates going up.

As I said it is now that the foundations of fortunes can be made.

Whether that is with PRIM is another matter, but they do have some interesting investments, and are possibly very cheap.

News I think at the end of August, at best.

I had alluded to the fact that things would go much slower than most anticipated in previous posts, but end of August gives plenty of time to drill that one hole at Tai. Could even be later, but beyond end September would be pushing it.

Theorizing over an earlier raise and multi drilling campaign is I think missing an essential point.

Apart from likely dilution @ 5p if you are drilling multiple holes in virgin territory are your chances of success greatly improved if your best and most understood target by far, Tai, comes up a duster?

I think not.

If Tai is a duster then all bets are off whether you are able to drill another couple of holes or not, as it would throw the whole project and the assumptions underlying it and the geology into doubt - that is - maybe - the helium has all escaped to the atmosphere, or isn't commercially extractable.

If Tai is a success, then the company (and Mr Minchin & Co) has it made - so why bother with anywhere else.

As to the other matter, licences, permits etc, I'll leave that up to the company.

As to the rig, if it has been stood idle for the past 7 years (and we don't know that it has), getting anything back for it would be a win for the owner. The company can still issue some of those those 200M shares in return for the use of the rig for a few months, they are only precluded from issuing shares for cash (unless offered to all, pro rata), not precluded from issuing for past or future services, rental etc.

We will see what happens...

Chill if it is sunny where you are, not here though...