The Sky’s the limit for Helium One
“…The main thing that stands out about Helium One is just the scale of the resource, and because of the very high helium content, the very, very attractive economics…”
Alex Brooks is one of the UK’s pre-eminent analysts on all things cannabis and his scientific curiosity has been equally piqued by the industrial gas helium.
In his role as senior analyst at Canaccord Genuity, he admits that before embarking on research for explorer Helium One Global, he wasn’t aware about the depth of applications that are required for helium. He now has encyclopaedic knowledge of the gas and its uses from MRI scanners, fibre optics, hard drives, specialist welding, rocketry, to a lesser extent airships; and helium is now being proposed for a new generation of fusion reactors coming out of Japan. It’s no wonder Brooks describes helium as “chronically undersupplied.”
After an oversubscribed fundraise in November and AIM market debut in December, Helium One Global gave investors the opportunity to be part of the Rukwa project in Tanzania, said to be the largest known primary helium resource in the world.
Brooks adds an element of intrigue when he says the helium reservoirs in Tanzania have been a well known secret for several years, but due to a ‘lurid’ political and commercial upset which stopped international investment in the area, the gas couldn’t be extracted.
This upset pre-dated Helium One’s entry into Tanzania, and Brooks anticipates the development at Rukwa won’t be complicated as it enters its maiden drilling programme. Brooks summarises his modelling. ” Phase 1 development of Rukwa would cost approximately $80 million. The result of that is something that will generate helium with a value annually north of $100 million.”
He’s impressed with company management too. “Ultimately investment is a trust exercise and in all our interactions with the team at Helium One, they have been very impressive, very professional and actually very realistic about what this asset and what this development is able to deliver.”
Brooks stresses that the main challenge for any company, not just Helium One is what he calls the ‘ultimate offtake arrangement.’ In Helium One’s case they’ll need it, if they do succeed in producing 350 million cubic feet a year, which is 5% of the global helium market which could translate into 18 months of global growth.
Listen to Alex talk to Sarah Lowther about how the flowering of technical innovation is increasing demand for previously ‘minor’ metals and gases and products which today could be ‘very big and interesting markets,’ what intelligence #HE1 investors can expect in the near term and which companies Helium One needs to make peace with.
In his conversation with Sarah above, Alex mentions Lorna Blaisse, the stellar geologist Helium One has just recruited. Watch Lorna speak in this video with Proactive UK’s Katie Pilbeam.
Follow Canaccord Genuity on Twitter – @CGWM_UK
For regular video updates on Helium One’s progress at Rukwa follow it on @Heliumone1
The author was remunerated but does not hold shares in the company