 ITK1, the HEX stock should be changing hands at 45p - 55p AT THE MINIMUM, and based on its recent delivery of key milestones.
However, its large retail investor base means that, the January 2025 capital raise, that saw the issue of 29.5m new shares, was always going to generate an extended 'churn period' as 'flippers' exit. This has, in turn, placed downward pressure on the HEX stock.
However, according to Level III data, the 9-week stock churn levelled off towards the backend of last week, indicating the possible exit of 'flippers'.
Importantly though, and excluding Bo and Oberon's circa 13% holding, LONGS are now in control of the HEX stock. So I expect to see a gradual firming up of the share price over the coming week, and regardless of the flow test results (Charles Formation) which I expect will outperform expectations.
In the meantime, I fully concur with the previously shared note below:
A Worthy Pick-and-Shovel Play
Helix Exploration (AIM: HEX) is poised to emerge as one of the fastest-growing pure-play helium exploration companies on the London market, achieving rapid progress from its initial public offering (IPO) in April 2024, to the anticipated commencement of first gas production by the second half of 2025.
This accelerated development timeline is a first for an AIM-listed junior explorer, and underscores the company’s surgical and headstrong execution.
Under the leadership of CEO Bo Sears and his team, Helix has consistently delivered on its key objectives, some of which have piqued the interest of mid-tier players in the helium space like the successful drilling of the Clink #1 well in Q3 2024.
The well revealed gas samples containing 2.5% helium, marking the highest helium concentration recorded in the state of Montana and highlighting the project’s significant helium potential. Additionally, gas samples indicated a 55.2% hydrogen concentration, potentially representing the first large-scale geological hydrogen discovery in the United States.
This was swiftly followed by the Darwin #1 drill in Q4 2024. The well uncovered a 236-foot gas column, producing 2.75 million cubic feet of gas per day with a helium concentration of 1.1%—well above the commercially viable threshold of 0.5%.
A subsequent capital raise in January 2025 secured £5 million in funding to accelerate the monetisation of the company’s Rudyard asset in Hill County, Montana, keeping the project on track for first gas production in the second half of 2025.
Yet, the company’s share price appears to be somewhat lethargic after such a phenomenal performance. And more so when you consider a recent independent valuation of the Rudyard asset that placed it at £61.5 million ($77.9 million) based on proven reserves alone.
However, when contingent resources are included, the valuation nearly doubles to £114 million. At an 8% discount rate, this equates to approximately 75p per share—a 400% premium over the current share price of 15p.
CEO Bo Sears recognises the pricing disconnect on show; “We have a commodity of extremely high value. And coupled with that, we have just unlocked a tremendous amount of value at Rudyard, and our reserves’ value now dwarfs our current market cap by several multiples.”
Given these developments, the company appears significantly undervalued, particularly as it approaches a critical inflection point driven by its proximity to production. In financial terms, this inflection point represents a phase of transformative growth, akin to the most pronounced shift on a differential curve.
In the meantime, it’s worth noting that, Ingomar Dome, the 16,512-acre site, strategically selected by Sears, is estimated to hold a prospective resource of 2.3 billion cubic feet of gas, with an NPV of £240 million ($304 million).
And all that against the backdrop of the current global helium demand, which is projected to grow at 6.7% (CAGR) from US$4.5bn in 2025 to US$7.5bn by 2035. This will be chiefly driven by semiconductor manufacturing, medical imaging, and other high-tech applications. This makes Helix a worthy pick-and-shovel play in the AI and new tech boom, particularly given its current valuation and growth prospects.
AIMHO |
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