Hi FootmaxI don't entirely disagree with you, however I think...

Hi Footmax

I don't entirely disagree with you, however I think the more significant factor yesterday was probably an announcement released by the exploration venture Noble Helium ('Marriott Rig mobilising for North Rukwa', 02/08/2023)

The aforementioned announcement resulted in almost a 4% rise in the NHE share price, on the back of strong volume.

I'd bet that some of the selling yesterday was on account of traders selling BNL to buy NHE.

One thing to bear in mind is that the ASX helium universe is really very small. There are only six or seven companies with helium exposure, and some of these companies have little interest in developing their helium assets anyway.

The only serious ASX helium players are Blue Star, Grand Gulf, Noble and Renergen. Of these four, Noble is the one I like the least.

I think I know why traders (and I am sure they are mostly traders) are running into Noble Helium. They perceive it as being an 'AVZ Minerals' analogue.

In the mid-years of last decade, I remember running the ruler over AVZ. At the time it was trading at just 0.01c, or thereabouts.

I was astounded when the stock surged over the next couple of years, rising above 0.25c in 2018, before eventually running out of puff.

But there was an even more incredible rise to come: the AVZ share price eventually punched through the $1.00 mark in early 2022.

Of course, shortly afterwards AVZ shares were suspended, and shareholders of this stock have been in limbo ever since.

That example illustrates why I don't like Noble Helium. To be fair, Tanzania, where Noble is focusing its efforts, is a more stable environment than the Congo.

But at the end of the day, NHE is an uber-speculative stock. Tanzania just has no track record with respect to helium.

That isn't the only problem with Noble Helium, by the way.

Location is of primacy when assessing the viability of any commodity project.

However, this is of still greater importance with respect to helium projects, because the gas is notoriously difficult to contain and transport. Eventually, the gas just seeps away.

So the ideal location for a helium project is somewhere that is not-too distant from the major centres of industry.

Does Tanzania fit the bill? No.

In terms of location, the best helium projects are those in North America. This region has got the trifecta going for it: major potential for helium, a proven track record with respect to helium production, and it also boasts a major helium-hungry industrial hub in Silicon Valley.

So with this in mind, let's take a step back. What is the market cap of Noble Helium? At time of writing, around $80 million dollars.

What about Blue Star? $44 million.

In light of the substantial size of the Blue Star acreage position and the high HE grades of their projects, do you really think this makes sense? I'll let you, the reader, be the judge of that.

By the way, those posts about the supposed imminent capital raising strike me as a little odd.

The worriers could be right, maybe there will be a raising. So what exactly is the concern here?

Reading though the posts and joining the dots, it seems that the posters are bothered by the fact that in order to transist into a helium producer, Blue Star will need to raise a few million dollars at a slightly lower share price (the suggestion seems to be that 0.025c, or thereabouts, will be the offer price).

That would result in a total increase in shares outstanding of maybe 10%, and after this, the company would seemingly be on the way to becoming a producer.

Is this seriously something worth getting agitated over? A small capital rasising to kick start production so that the company can generate $$$ over the long run?.

And bear in mind, we have no real evidence that a capital raising will be necessary anyway: Blue Star could, for example, just sell down some of their extensive acreage position if they really needed cash.

I'd almost forgotten how much nonsense there is on Hotcopper. When I read some of the stuff that is posted here every day, I can't help but think of the phrase 'First World problems'.