RE: DM Video11 Jul 2021 14:18
Hi Noob,
“the drill has daily rates”.
I am not sure about that as there are no details to the absolute drilling costs. It maybe a per drill cost. Mitchell’s have enough experience to price the drill with a likely add on contingency bandwidth. DM as the customer would want to know the min and max cost upfront.
What we do know is that they have the option to take payment of the third & fourth wells in equity. As shares would have to be issued that needs to be a known amount in advance of the drill.
The price will be at a 10% discount of the VWAP from 14th June (drill start date) to when they decide to take the option. So if we have a successful first or second hole then you can be pretty sure Mitchell’s will take that option which leads me to believe it’s not a day rate at least in the sense of daily rates.
“The only questions remains around why the proposed testing at 400m was decided against.”
I agree, as others have pointed out. There is no need to test at 400m. Everything is geared to protect the integrity of the well and save time. There is no benefit in crossing i’s and dotting t’s on a time consuming RNS which will have no bearing on the end result.
DM set our minds at ease with the mud video. One of the objectives was to explain to the market that “the geolog truck houses the chromatograph and mass spectrometer which provides constant real time analysis of Helium in mud”. He showed us how that was fed by the degasser. A new accurate technology.
So he has told us he knows the numbers. However, irrespective of those numbers he would still likely push on to TD. This is because of those indicative stacked horizons in the seismics that made TAI a ‘must drill”.
Wether it’s a duster or a discovery they would want the data.
Imo there could still be more changes to the program. All depends on results. DM is paid to be flexible. At least he communicates with the market. We just gotta trust him!
I am really hoping for a discovery. If we find commercial Helium I will be averaging up here over the campaign as that’s when the other factors kick in like strategic resource, Helium price etc and I think we have an edge over the market atm of understanding the potential which won’t be in the SP for a while thereafter.
Usual caveats
Trek
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