RE:RE:RE:Press Release
Thanks, I have been following the primary helium story for a long time. I only wish I had some more upbeat contibutions. I think Millie has a better take at times. There are lots of worries. But what could be real positives after all the challenges. What potential positive stockprice triggers are lurking out there.
1. RHC challenges: the Steveville processing plant cost too much and has underperformed. They do not have enough cash for operations plus debt service plus growth. They cannot efficiently raise capital from the market through secondary share issues at this depressingly low share price. Just can't get enough cash to move the needle and dilution ispunitive to existing share holders.
2. RHC positives: Finances of Steveille plant would improve with hitting projections for helium production and and adding food grade CO2 production (at a cost of a couple of million). Ogema (two wells) and Val Marie (one well) are already drilled. Testing those wells would help. They might find helium levels twice that of Steveville. And good flow rates, especially a Val Marie. They might be able to get a cheaper simpler off take plant funded by an industrial gas supply company. (the NA Helium model). Price received would be less but cost would be less and they could start following their plan of adding additional production areas. They could drill a well at the Forty-MIle prospect in Alberta, where helium levels might be 3 times that of Steveville. Note that all these steps (except the CO2 module) are included in the 2024 development plan which was released on February 28,2024 without any comments since. A potenetial bigger positive stock price trigger would be a farmout of the Nazare project to a company with enough capital to drill some horizontal wells and (if positive) build a much bigger processing plant. RHC could retain a royalty interest, say 10%. This would be an additional source of capital for growth, If the Nazare project was big enough it could be the location for a Saskatchewan liquification plant which could serve all the producers and decrease costs of liquification (currently RHC is trucking to Colorado) and accelerate the development of a meaningful role for the province as a meaningful part of the NA supply chain for helium.
RHC is still a long shot. But my plan is to hold and see how it plays out. I have already lost most of my RHC investment. Options are salvaging what I have left right now, or hoping for a phoenix rising from the ashes scenario. Those seldom happen but not never. Needless to say RHC is not one of my high conviction investments.