Desert Mountain Energy Corp (DMEHF)

[fausthimself]

In this interview from August with DME president Don Mosher, he mentions the first processing facility will be up and running around the start of November. There will be a 90 day optimization period, where initially they will run the plant at the minimum amount of 50 thousand cubic feet and slowly ramp up the volume until it can handle its maximum amount of 10.5 million cubic feet per day of raw gas.

In a prior interview, Don mentioned that if the company were receiving old prices, before the 200% increase this year, and they were selling balloon grade helium (99.99% pure), and if the plant was running at 30% capacity, they would be making a profit (after royalties, taxes, and expenses) of $90,000 per day.

How I like to calculate the potential of this plant is to take the total gas output of 10,500 mcf (thousand cubic feet), multiplying that by the current average helium concentration of about 3%, and then multiplying that by the latest quoted price the company expects to receive, which right now is $2,500/mcf. I’ll then factor in a profit margin of 90%, which Rob has stated earlier is achievable at these prices.

A few factors could change the above formula. The possibility of Well #3 from the Meteor Crater field, the recently drilled Gunnar Dome wildcat, and another offset from the McCauley field also coming online at the onset of production could drastically change the helium concentrations. Eight wells feeding into the plant would probably be closer to 60% capacity than 30% capacity. The price after the optimization period could possibly be much higher than the price quoted by the company previously. DME plans on selling the highest grade (99.9999%) at spot price, which will be carrying a high premium as the helium shortage draws on.


http://www.metalsnews.com/Metals+News/MetalsNews/Dr.+Allen+Alper,+PhD+Economic+Geology+and+Petrology,+Columbia+University,+NYC,+USA/FEATURED1413692/Interview+with+Don+Mosher+President+Desert+Mountain+Energy+Corp+(TSXV+DME+US+OTC+DMEHF+Frankfurt+QM01)+Buil.htm