As a current investor in RLT, I am excited about the impending news and progress that will bedelivered to shareholders by the BOD over the next two to three months. All indications provide for exponential growth within two to three years and beyond. Despite the global effect of covid across all sectors of industry, the BOD has been able to navigateand execute their robust business plan ahead of schedule which as a shareholder, is highly commendable.
Our concentrations of Helium have reached as high as 12% in December 2019 and more recently two of our wells returned readings of over 3.4%. The average helium concentrations from major global producers are in the range of 0.5%.
This puts Renergen at a significant advantage in “economies of scale” in the production and overall production costs in comparison to other global suppliers and Renergen is well placed to become a major global player in the Helium space.
The BOD of Renergen, led by Steffano Marani, must be applauded for progressing the Company to the soon to be completed phase one of the plant which is anticipated to come online at Q4,2021 All this with a MC of $250 million having a joint share register totaling only 117 million shares.
The USA has always been the major supplier of Helium however my research indicates to methat the Hugoton Gas Field in Texas may be depleted within 14-18 months which will invariably create a vacuum in the USA helium reserves.
The US through OPIC provided Renergen with a loan of 40 million USD to ensurethat the phase one plant would be completed. I have also noted that there has been considerable interest from China. Out of all the small explorers and even large why is China & America involved with Renergen is a question i find asking myself, having the two biggest powerhouse countries that control the globe share a common interest in our little small cap company Renergen is quite the interesting thing to figure out.
The current business plan provides for phase 2 of Virginia to come online at around the same time that the Hugoton Gas field potentially goes offline. Whilst this may be coincidental, it poses the question, “what strategic advantage would Renergen have if it was to halt production of helium and potentially create a worldwide shortage of the resource?This is pure speculation on my behalf of course.
Personally, it has been a frustrating experience watching the day to day volatility of our SP.Our tight share register is welcomed by most investors however our lack of liquidity has created a soft target for day traders and bots. I have shared this view with many of the top 20 shareholders of whom I have constant dialog with. Primarily, the top 20 shareholders have either increased their holding or have exited the stock altogether, taking their profits.
It is my belief that one shareholder who has neither increased or decreased their holding buthas a degree of influence amongst smaller shareholders of Renergen may be the instigator and a manipulator of the bot trading we have experienced in the past. I am well aware of who this shareholder is.
Renergen holds the only onshore license to supply South Africa with LNG.Whilst this forum seems to be “helium centric”, the potential for this resource cannot be overlooked. Logistics within South Africa will soon move towards a cleaner LNG, away from diesel which is currently dominant. Whilst their is little to no scope in the exportation of LNG globally, Renergen will be at the forefront of the transition of diesel to LNG fuel for logistics and there is potential to supply future power stations that will need to be addressed by the South African government. Any competition in regards to LNG domestic companies in South Africa are 8-12 years away from receiving a license to supply.Renergen has a monopoly on local LNG supply.
My research also tells me that globally, there are 2 Companies that control the Helium market, Linde and Air liquide, Followed by 6 companies who work as middlemen.Recently, Renergen signed a 10 year contract dealing direct with the end user, a transactionthat is extremely rare in this space as the majority of end users would approach the 2 Companies mentioned and not the producer. One would think and speculate that the “producer to end user agreements” provides for a greater benefit for both parties and that Renergen would be open to many many more of these agreements providing substantially improved financial outcomes to both parties.
Then there is CryoVacc and global cold storage logistics, The opportunities and potential for Renergen is quite staggering. Take into account that the according to research Covid is sticking around for the next 10-15 years where vaccines and multiple updated vaccines will need to be taken as the virus mutates. The cold storage market size was valued in 2020 as a $210.49Billion USD industry. We are slowly getting a grip on the transportation of the covid vaccine and i believe CryoVacc can provide solutions to many more avenues of cold transport. Assuming we take 1% of the market annually the figure would be exponential$2.1Billion USD. This is speculation but it is in regard to the future "potential" market a product so unique and is patented can do to an ever growing industry. Please take into consideration that covid vaccine temperature logistics is failing at the rate of 80%!!
Around the $3.50 mark Renergen will be ready to be listed on the ASX300 once it gets updated this will put us in the position to be indexed and targeted by companies like Morgan Stanley and Super Funds, Please refer to a post by Launched in the Chart thread in regards to TA and SP direction as my opinion on that post is heavily aligned.
Here are some numbers that have been thrown around:
Helium:797,000 mcf produced per yearUSD $198,864,000 revenue from this based on USD249/mcf
LNG:6,200,000 GJ produced per yearUSD $132,500,000 revenue based on ~USD21/GJ forward pricing
Assuming we raise another $100mil at around $4, we'll end up with about 160mil shares issueindustry average P/E ratio of 12.5x gives market cap of about $2.2bil MC, $13.67 SP!
In the coming weeks we are expecting announcements and progress on the following: Annual Report - Released Go READ IT!! Well - C3P0 Well - P010 Well - P012 Well - R2D2 CryoVacc Update Concentration Reports on the above wells Pre-Feasibility Study
Id like to thank you all for the time on this lengthy read on the back of the research that i have done and the credit to the team that i have who also helped me put this together they know who they are! THANK YOUTEAM!
DISCLAIMER: This is all my personal research, networking and speculation please don't take this as financial advice as i am not a licensed professional! Nor what i am saying may or may not be completely accurate so please do your own research!
Kind Regards to all, Good Luck All Holders!!
RLT Price at posting:
$2.16 Sentiment: None Disclosure: Held
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