apologies for re - posting, please ignore the previous thread...a few technical issues..
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Given the outstanding success of the recent drill campaign (5 out of 6) at Virginia and the potential of Evander, it is obvious that we are due for a significant reserve upgrade.
The link below directs to the MST Access research report from July 2020, on the Renergen Limited website.
https://www.renergen.co.za/helium-resource-update-shows-renergens-huge-potential/
The report inferred a long term target of AUD $5.00 by assuming 25% of the 1C Contingent Resources of Helium. The 1C figure is only 7.95Bcf, 25% of 7.98 provides a Contingent Helium reserve of 1.98 BCF.
Hence, 1.98 BCF of Helium will provide a long term target of $5.00
Although both the LNG and the Cryovacc projects will also produce significant revenue, the focus for the purpose of this exercise is on Helium.
If we assume that the drilling campaign will comfortably produce Proven Resource estimates as below, it is possible to deduce a long term target..
| Proven Resources | BCF (Billion Cubic Feet) | Recovery % | Reserves Contribution |
|---|
| 1 | 1P | 10 | 90% | 9 BCF |
|---|
| 2 | 2P | 20 | 50% | 10 BCF |
|---|
| 3 | 3P | 40 | 10% | 4 BCF |
|---|
This would produce a total estimated 1P resource of 23 BCF.
By referencing the targets deduced from both the Edison and MST Access reports, we can assume the following:
i.23 BCF / 1.98 BCF x AUD $5.00
ii.11.616 BCF x $5.00
iii.Long term SP Target = AUD $58.08
Although this is over simplistic and does not consider other factors such as share dilution, change in Helium Spot price etc, the long-term target does not take into consideration revenue generated by both LNG sales (reserves are also expected to increase significantly) and the Cryovacc cold storage and logistics system. Both the LNG and Cryovacc projects have the potential to produce revenue that would justify stand-alone spin offs.As we are all aware, many mining explorers and other small caps are significantly overvalued on ridiculous multiples that will all be severely impacted should there be a market pullback. Renergen on the other hand is significantly undervalued given the following upcoming catalysts:1.Phase 1 operational – October 2021
a.Helium production targets of 250-350kg / day
2.Significant Reserves upgrades – coming months. Upgrades from both Virginia and Evander!!
3.Cryo-Vacc revenue – will be materially significant at end of fy22 and reported in the 2022 Annual Report.
4.Phase 2 project funding – will be announced in coming months
5. An additional 150 wells to be drilled in the coming 12-18 months
6.Phase 2 operational – Q4 2023
a.Helium production targets of 5 tons per day
b.25 year mine life
c.USD $53/kg = $265K per day in revenue for Helium alone.
Without a doubt, the most undervalued and suppressed stock on the ASX...Given the impending global shortage of helium and its importance across numerous verticals including defence, space travel / exploration, it is very easy to identify the manipulator and suppressor of the share price...you only have to look at the top 5 holdings in the ASX registry to identify who has the most to gain..
