Not too many trading days left, Desert Mountain Energy

 

Not too many trading days left,Desert Mountain Energy

TSX.V: DME     USOTC: DMEHF

Investors are coming around and becoming focused on key metals, minerals and elements that drive technology and civilization. Family offices, funds, media, and retail investors alike are starting to pay attention to key drivers to the economy. Helium is one of those stories. Commodity plays including precious metals are in the forefront of investors minds; particularly, with the likes of Warren Buffet entering the gold business: a business he has spent his life criticizing. Even the most famous investor must acknowledge this shift in tone, investment strategy and flight to core commodities. These resources are core, foundational ingredients for our future economy. One of many idyllic opportunities is Desert Mountain Energy. It may be the most urgent and immediate ones in my coverage because of the time sensitive nature of their results.

If there is one thing that stresses me out today is not having enough of a position. I am a true believer and it is obvious; I am open about it and I want the big ‘W’!

We all must take a stand on investment decisions, and I am happy to take this position personally. It fits my risk parameters.

I am certainly a fan of this story and let me remind you why I feel strongly about this company.

But….

…..before I tell you why let me just say this: there are only 7 more trading days in August.

There is urgency to this opportunity.  We are expecting results, and analysis from the summer drill program at the Holbrook Basin sometime around month-end or shortly thereafter. The stock is sitting waiting expectantly.

The Commodity:

Helium is critical. I touched on it in the Helium report but essentially a high-tech coolant for technology including data companies like Amazon, Google and nuclear reactors, MRI machines and a myriad of other technologies that drive us forward into the new Reset or shift we are hearing about. Helium plays a key role in this shift.

Three Reasons Why:

The Region

Today it is vital to have US assets, commodities and stockpiles of the resources required to build nations. The Holbrook Basin is considered by many to be “the World’s best address for Helium”, with historic grades ranging from 8% to 10%, and known as “the Saudi Arabia of Helium”. These are astonishing grades – a major drill program success would be somewhere around 2 to the 3 percent!

Management:

Although Irwin Olian has moved aside running the company, he is the founder of Desert Mountain Energy but along the way was a key driver in the success of this company. The technical expertise, experience, drive, and innovation in the field comes from Robert Rohlfing.

President, CEO and Chairman of the Board, Robert Rohlfing has 26 years’ experience in managing successful exploration, drilling, development and production programs for oil & gas and minerals worldwide. In fact, he has drilled over 250 wells in his career, all of which successfully encountered hydrocarbons apart from two. He has developed new drilling innovations, including techniques for tight radius shallow under pressure horizontal wells. I was fortunate to be able to speak with him for over an hour about the future of Desert Mountain Energy and the vision is exciting and let me just say that this is the guy you want in charge of this program. There is a vision for taking this company dramatically forward. Mr. Rohlfing has assured me this is just the first major milestone in a bigger plan.

I want to include a snapshot of a chart that will come into play in the next weeks. The chart below projects estimates of ‘possible gross receipts’ at various levels of potential production according to per diem gas flows and percentage gas flows. These are just theoretical and do not consider a myriad of factors including costs, and/or royalties.

Let’s Talk Grades

What the chart above tells us is that getting 2 or 3% helium with good gas flows and this would be a homerun! We must remember that about 90% of the world’s helium is 1%. Desert Mountain energy does not need to hit 7 or 8%, of course it would be outstanding but even with reasonable grades and flow this first drill program will be an enormous success.

With all these types of projects we must acknowledge that it is speculative in nature. Desert Mountain Energy has endeavored to ‘de-risk’ projects by using state of the art technology, embolden the most experienced and talented teams both in drilling, surveying, and analysis to determine targets and examine results. The team has performed over the past 6 months and the market has acknowledged it.

 

We are close and I wanted to share my enthusiasm and energy with you. Talk to your advisor, talk to your broker, and look at your risk capital wisely and ask these professionals if it is utilized efficiently. Anyone who has an appetite for a quality short term swing at the fence should look at DME.

 

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Securities Disclosure: I, Andrew O’Donnell own this stock and have been remunerated by the company.

 

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