Thank you, my message was poorly written. Market timing is nearly impossible, but statistically, the next few months are usually the worst, and we are long overdue for a sharp correction, and all of the momentum trades will likely get hit even harder.
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- Thread starter Bird4um
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Thank you, my message was poorly written. Market timing is nearly impossible, but statistically, the next few months are usually the worst, and we are long overdue for a sharp correction, and all of the momentum trades will likely get hit even harder.
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Truer words have never been spoken. Which why short of the obvious (covid, etc), I tend to stay invested with hedges when nec. I'm not good enough to trade in and out aggressively.
Remember it also depends on your age, net worth, sophistication, etc. I am not adding much risk now, and am actually thinking of taking profit in tax deferred accounts in the near future.
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I have an upcoming liquidity event. Will probably move most of it into corp bonds and structured products.
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@Cryptical Envelopment @YUMU
A lot of questions answered in this interview. Including the "consultant" that was added to the board. Jessica Davey, VP of Land.
2021-07-13 | TSXV:DME | Press Release | Desert Mountain Energy Corp
(2021-07-13 | TSXV:DME) Desert Mountain Energy Announces Appointment of Jessica Davey as VP of Land & Board of Directors
https://www.abnnewswire.net/press/en/106120/dme (first 7-8 minutes is fluff you can skip)
NASDAQ listing targeted in the near term
The next 10 wells will be in the vicinity of the existing wells, which extremely minimizes risk.
In the past 60 days, the CEO has REJECTED supply contracts with upfront payments of $300 million and stock placements totaling $710 million.
Desert Mountain no longer needs financing. If there is financing again, it will be clear to shareholders that this is likely to be a for something "really huge". Their words.
I think we'll go another 45-60+ days before wells #1 , #2 , #4 are encased and ready for production.
EXCITING TIMES!!
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FWIW, BOA/ML came out with research yesterday that was generally bullish, but did caution about the negative seasonality from August to October.
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It's a little weird out there for sure, which is one of the reasons I moved a good chunk into the structured products we were messaging about for the time being. Happy to sit back with a good portion of my portfolio getting 9-12% coupons with monthly dist.
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We buying more?@Cryptical Envelopment @YUMU
A lot of questions answered in this interview. Including the "consultant" that was added to the board. Jessica Davey, VP of Land.
2021-07-13 | TSXV:DME | Press Release | Desert Mountain Energy Corp
(2021-07-13 | TSXV:DME) Desert Mountain Energy Announces Appointment of Jessica Davey as VP of Land & Board of Directorsstockhouse.com
https://www.abnnewswire.net/press/en/106120/dme (first 7-8 minutes is fluff you can skip)
NASDAQ listing targeted in the near term
The next 10 wells will be in the vicinity of the existing wells, which extremely minimizes risk.
In the past 60 days, the CEO has REJECTED supply contracts with upfront payments of $300 million and stock placements totaling $710 million.
Desert Mountain no longer needs financing. If there is financing again, it will be clear to shareholders that this is likely to be a for something "really huge". Their words.
I think we'll go another 45-60+ days before wells #1 , #2 , #4 are encased and ready for production.
EXCITING TIMES!!
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I'm buying every chance i can get till they show me significant reason to pause. The economics are too good.
The CEO says in todays interview there are strong indications well 4 contains Helium 3 which is the rarest and most expensive form. How expensive? Well this is all i could find. (these are 2010 prices, helium is multiples higher today)
In 2010 DOE released 14,000 liters per year, at a spot market auction price of $2,000 per liter, $15,000 per gram or $500,000 per troy ounce, over 300 times the price of gold or platinum by weight.
The CEO then made reference to their recent government contractor approval and approval from the US GOVT to receive instant payment on delivery. (both happened during the drilling of well 4).
I really don't want to sound like a shill for the company but it's hard not to be excited lol.
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I have to say, I think you're on to something here, amigo.
I wonder how many options the YouTube host has, though
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I have to say, I think you're on to something here, amigo.
I wonder how many options the YouTube host has, though
Hah, ya it's always softball interviews with these youtube guys so always take it with a grain of salt. I'll put together a list of short/long term risks and unanswered questions for the board to digest so they aren't just getting the fluff.
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For the DME peeps @Cryptical Envelopment @YUMU @Bird4um
| Price Variables | My thoughts |
| Helium price volatility | I expect some large price swings as helium becomes a brand new market, however most of this business will likely be sold on contract basis and de risked. There are no hedging mechanisms I'm aware of. |
| Success rate of wells. | 4 for 4 on wildcats is impressive, the next 10 wells will be built around those prospect wells. I like our short term odds. Certainly we'll hit rough patch at some point. |
| Dividends | DME has said dividends are definitely in the future plans, there are no real pure helium plays to compare it to, but gas companies generally pay 2-5% range. |
| Revenue Multiples | I've seen relative industry peers in the gas field priced at an average of 3x-7x. FWIW |
| Risks/Negatives | My thoughts |
| Environmental/EPA risks? | DME has been explicit about their commitment to the environment by using air drills, and renewable energy for for the production facility. However the city of flagstaff has had an injunction on well 3 for 6 months because they thought they were "fracking" . All signs point to a local municipality overreacting before gathering the facts. |
| Permitting issues? | It worries me I don't see any permits for future wells filed for on the public database, however these databases aren't properly maintained so there is certainly a lag to be accounted for. DME has always filed for permits a few months before before drilling in the past. I expect they would need to be a little more prudent or transparent in this area. |
| Will local competitors buy up land next to their leases? | There is a shell corporation that holds some adjacent land, dead end on research there. DME has mentioned quite a few times the prefer private land and will likely avoid public land leases. Right now there is no imminent threat. |
| Share dilution | They are a little loose with options as mentioned before. There is one more lockup that expires Q1 of 2022 after that only options exist. They are in a great cash position and at this time the threat of any significant unforeseen dilution is negligible. |
| This market is moving from Govt control to privatization, what unforeseen risks are there if any? | This is new territory here, i can't even come up with similar situation for a commodity. I think we will see some wild swings in prices in the next few years till the market gains it's footing. It's hard to imagine a sustained price decline as demand surges and the national reserve is exhausted. |
| There is a "gold rush" of helium explorers entering the market. Can DME stay ahead of the competition? | LOCATION LOCATION LOCATION. I won't go too deep in the logistics portion here as I've already posted about it before but the CEO has been adamant that there is enough demand locally to consume all of their production. I know of explorations for helium going on in Montana , Canada, Russia, and Tanzania. As far as I'm aware none have significant verified results yet, early Canadian indications came back at less than 1% HE. Neither the Canada or Montana operations have plans to vertically integrate and intend on selling raw product which gives DME a huge leg up on AISC and margins. Every helium company on my watchlist has a supreme amount of debt. |
| Well #3 is still suspended by the Flagstaff city council for enviro concerns. | This isn't a major concern of mine, DME isn't fracking they should be able to win this dispute. I am surprised it's drawn on this long but that's local government for you. |
| The CEO's daughter is on the board of directors | She's qualified. I just thought it should be mentioned. |
| Dr. Kelli Ward on board of directors | She's a political operative and leader of the GOP Arizona party responsible for the voting audit. She could be a great asset but could also easily be a targeted liability. |
| MRI Helium capture | I've seen some newer MRI machines are being built with helium recapture devices. They don't capture everything but long term if it's widely adopted could pull some demand offline. |
| International competitors | There are tales of massive helium fields in Russia and Tanzania. I don't view them as a direct threat to DME due to logistical complexities but certainly they could have an effect on global pricing. Neither of those countries are known for being truthful or reliable when it comes to commodities so my concern level is low. |
| Selling the company | Hey, it could happen. |
| **** i haven't thought of | DYOR lol. |
| Potential Growth Opportunities | My thoughts |
| Additional land leases/wells | Pure speculation here, but they've added acres previously so it's not out of the question. |
| Additional processing capability | If they continue to hit at a high rate and the reserves come back better than expected they may need to redesign their processing plant or consider a second plant. If they do find HE3 i'm not sure the facility they have planned is equipped to separate it, something to watch. The consumer of course is likely already setup for this and would buy HE3 with HE4 to separate themselves. |
| TSM/INTEL Phoenix AZ operations coming online in 2024 | This brings online even more demand for the higher % helium grades, increasing MCF price. |
| Helium 3 | It's so rare and expensive multiple countries have drafted plans to try an mine it from the moon. That's really all that needs said. |
| Research Further | |
| Typical Volume of high grade helium consumption at semiconductor facilities. | |
| Look at global revenue multiples for helium only processors if there are any. | |
| Calculate MCF life expectancy on initial wells when available and extrapolate, add to pricing model. | |
| What other public or private helium processors exist in North America? (not explorers) What is their AISC cost. | |
| Unanswered Questions | |
| Processing facility timeline needs an update. I expect a delay of earlier Q4 2021 projections. | |
| Timeline for the next 10 wells? | |
| What type of expedited drilling timeline can we expect when the processing facility goes online? | |
| What hurdles are there for NASDAQ listing? |
| What percentage of helium does DME expect to sell at "crude" level pricing? |
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SweetAndSour
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BRPHF under 14 is looking like a nice spot to add some more....
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I did.
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ALTS:
I like LUNA, CELO, and LINK right here right now. LTH's.
6.69, 2.54, 15.93
I like LUNA, CELO, and LINK right here right now. LTH's.
6.69, 2.54, 15.93
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I am happy to own a small part of it.
Keep in mind it has a very small float (easy to drive down... and up).
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Ya, I just tied up too much capital in the common. I like the setup heading into earnings.I am happy to own a small part of it.
Keep in mind it has a very small float (easy to drive down... and up).
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