Rome, Helix, and a sneak peak: here's your update

Good morning MINING AIM and welcome to Friday.

I'm going to keep banging the drum for Rome Resources and Helix Exploration for one simple reason: both companies are getting stuff done.

Both launched their IPO/RTO, and then immediately got cracking with exploration. There's no waiting years to fund working capital while they piss about with surface exploration - Rome had done all of this and some preliminary drilling before coming to market, and Helix had already selected Ingomar as its first drilling site.

The benefit is that we will now very soon see if either, both or neither are going to pay off. For what it's worth, I live happily in the 'both' camp, though freely recognise exploration risk exists.

Recognising Rome

Rome Resources continues to trade around RTO price and under the radar - this will change soon. The second drillhole, KBDD006 (in progress at 73m), has intersected a significant tin mineralised, highly weathered alteration zone at the Kalayi Prospect at Bisie North, 100m to the NW of previous drilling.

Tin mineralisation was intersected between 29m and 52m underneath the trench within a dark brown alteration zone with prominent quartz veining and associated cassiterite - and was confirmed by XRF portable analyser readings in several areas of intense alteration (presumed to be weathered chlorite).

For some context, there are two 'colourations' in the core sample of the sedimentary structure:

• obliterated by intense chlorite alteration which has weathered to a dark brown colour 

• white to light grey quartz veining, where there is visible cassiterite (tin oxide) mineralisation

You can only visibly see the tin in the white to light grey core, but it has also been confirmed by XRF in the dark brown core - meaning there is tin in the entire 23m intersection. And the first drillhole was highly encouraging as well.

The next drillhole will be situated where a cassiterite vein was encountered while clearing the drill pad 100m to the NW of KBDD006, while the mobilisation of the second and third diamond drill rigs to site is ongoing and expected to be completed, by either now or early next week.

CEO Paul Barrett enthused 'We are delighted to see such a significant intersection of mineralisation so early in the drilling campaign, confirmed from drillsite analysis as tin-bearing. More importantly, this mineralisation is present from surface and given the management's experience at Alphamin's neighbouring Bisie Tin Project, it is expected to continue to considerable depths. We will continue to build on this success with the forward campaign and look forward very much to informing shareholders of the quantitative assay results when available.'

This second drill core will now be logged and sampled (the third is about to get underway) and samples sent first to the COAL Laboratory in Lubumbashi for sample preparation from which a 100g sample will be sent to ALS in Johannesburg.

I've said this before but will say it again: the same exploration team at Rome discovered the adjacent Bisie tin deposit controlled by Alphamin. 

Rome's strategic advisor Klaus Eckhof founded and Chaired Alphamin.

Alphamin is now worth CAD$1.3 billion.

There will be a storm of assays through Q4, and the target is for a resource estimate by year-end.

Hot-tempered Helix 

Nothing like a really positive RNS to smack a share price down on AIM.

You can't keep a good opportunity down for long though; HEX shares are now changing hands for circa 20p apiece, which regardless of anything else, remains double the IPO price.

There may be some unhappiness among those who bought in the mid-20s - but IPO investors who wanted a quick out will sold aeons ago. 

This price action is classic retail, and reflects the reality that the steepest part of the risk-reward curve is now here; wireline logging is imminent and this will see Helix soar to new heights (or not) in short order.

I don't put much by charts, but it's worth noting that the stock fell to this level on three occasions before: May, June and August, and recovered each time

Once again though, Ingomar was hand-selected by Bo, so if you are going to invest in helium exploration, there is at present nothing better at this market capitalisation. This is another similarity with Rome - subject matter experts picking out prime real estate, and I suspect after Rudyard, Helix may be out hunting for one more.

Let's consider that RNS quickly. Drilling is now complete at Clink #1 well at Ingomar, all the way to 8,030ft, delivered ahead of time and below budget:

• Elevated helium encountered in drilling muds throughout the sedimentary column demonstrates presence of helium within all target horizons. 

• Significantly elevated hydrogen in drilling muds of up to 103,000ppm (10.3% H2) demonstrates presence of a hydrogen system within Cambrian strata.

CEO Bo Sears enthused:

'We are delighted to report the safe and successful completion of the drilling of our maiden exploration well at Clink #1 delivered ahead of time and below budget. Drill operations took 11 days from spud to Target Depth, completing well ahead of the 2-3 week guidance provided.

We are highly encouraged by anomalous helium identified in all target strata, indicating that we have elevated levels of helium throughout the sedimentary column. Additionally, the discovery of anomalously high hydrogen shows within Cambrian strata is a welcome development. A number of highly elevated readings up to 103,000ppm (10.3%) suggest a significant level of hydrogen in the lower part of the system. This will need to be fully investigated before any conclusions on economic potential can be drawn.

We are now moving directly onto preparing the well for wireline logging and appraisal via extended flow testing and will keep the market updated as we learn more about the helium and hydrogen system identified in mud-shows at the Ingomar Dome Project.'

One of the errors that companies led by experts tend to make is not explaining an RNS properly to the market, hence the dip after the news. Yes, you can come up with conspiracy theories on whether markets makers dropped the share price to load up on shares, but the bottom line is that people read 'elevated helium' instead of a number and panicked. They also know virtually nothing about hydrogen (in this case, most likely white hydrogen).

Here's a few key things to understand:

• Helium has been found within all four formations (a few weeks ago, you had no real evidence it was in any). You now have four bites at economic viability.

• 10.3% hydrogen at this stage could be economically lucrative and in addition to the helium present.

• The US Inflation Reduction Act allocates a production tax credit of $3/kg if hydrogen production meets 0.45 kg CO2eq/kg H2. At 10.3%, Ingomar would definitely benefit and this is the highest possible PTC.  

• The US views both white hydrogen and helium as strategic gases, so there may be a compelling case for grant funding especially given that Bo has testified before Congress at length in the past, and wrote 'The Disappearing Element.' Incidentally a great read, and well worth it for anyone who doesn't really understand why having Bo on board is so awesome.

• The drill rig is only credited to 8,000 ft, so there is a good chance that the gases extend further.

But from an educational standpoint, it's key to understand why the helium numbers were not present. It's actually quite simple:

The presence of hydrogen makes it difficult to verify ppm helium in the formation, as the typical tests confuse the two gases:

• Gas chromatography - signals overlap

• Mass spectrometry - H ions interfere with He ions

• Thermal conductivity - both have high readings

Wireline logging is needed to get the numbers; though remember that in the Amsden formation where there is no hydrogen, helium can be detected at 50x background level, and in Charles, 130x!. 

Adding a hydrogen component to any plant should be fairly cheap - and wireline logging is happening imminently.

High Priority AI

This is one to keep on your watchlist - it's not mining related but I feel risk-keen investors will appreciate the heads up: Primorus Investments has subscribed for 18.1 million shares in Pri0r1ty AI for £300,460 from the Company's existing cash resources, covering 8.45% of the issued share capital of Pri0r1ty.

This subscription is part of a recent £550,000 fundraise by  Pri0r1ty to fund software roll out. Alteration Earth announced on 27 June 2024 it had  entered non-binding heads of terms to acquire the entire issued share capital of Pri0r1ty - this should go through soon.

CEO and co-founder Daniel Gee noted 'We are delighted to welcome such a well regarded technology investor as Primorus as a shareholder. This investment round supported by Primorus has allowed us to accelerate our go to market strategy and expand our team with a wealth of experience from the SaaS industry. These funds will allow us to become revenue generating and welcome the first customers to Pri0r1ty Advisor, our flagship product. We are excited to onboard waiting list customers and release further product developments ahead of our proposed admission to AIM.'

Pri0r1ty's software seems to use AI to actually help with a real world set of problems.

Keep an eye out.

And enjoy the weekend.

Charles Archer - 30/8/2024