Rukwa’s resource is enough to supply the entirety of global demand for 20 years. We’re at least fifty times larger in terms of resource than any other helium company currently listed anywhere in the world
David Minchin, chief executive
What it owns
Helium One is an explorer with a portfolio of helium gas deposits in Tanzania.
Rukwa is the flagship in Helium One’s portfolio. The project spans some 3,590 square kilometres in south western Tanzania.
It is described as the largest known primary helium resource in the world based on >1,000km of seismic data, high resolution gravity surveying, micro-seep and macro-seep analysis.
The company is set to list in London as a drill-ready explorer and it appears to be one to watch for investors seeking some differentiation and exposure to an in-demand natural resource.
What it is doing
Helium One is coming to London’s AIM market in December with an investment opportunity that potentially unlocks an important and in demand natural resource.
A deal to merge with Attis Oil and Gas Limited (LON:AOGL) and a fund raise of at least GBP5mln will set up the company for an exciting phase of activity, with a drill programme potentially kicking off in the first half of 2021.
At first the company intends to drill a programme of three wells at the Rukwa project, its core asset, which is host to some 21 prospects and 4 leads with prospective resource estimates to date pencilled in at 138bn cubic feet.
Successful wells will need to prove and de-risk these resources for a commercial development so this will be a near-term focus and catalyst for investors.
Helium One on Thursday 5 November announced it had entered into an amalgamation agreement with Attis Oil and Gas Limited (LON:AOGL), a cash shell already listed on AIM.
The companies entered into a binding implementation agreement which sets out the terms of a proposed merger, by amalgamation under British Virgin Islands law.
It will see Attis shareholders receive 1 Helium One share for every 236 shares they presently hold. The merger deal terms value Attis at GBP1.76mln and Helium One at GBP6mln.
Alongside the merger, a fundraise is planned, with a minimum of GBP5mln being sought.
It is anticipated that the new company will join the AIM market on December 3.
Helium: Essential and in-demand
Helium is essential in many high-tech applications that are far removed from party balloons.
The inert gas has many uses, not least as an irreplaceable element in vital products such as MRI systems, medical treatments, computer components, fibreoptics, and microscopes.
It is an important natural resource because of its chemical properties – for example it has a low boiling point, and it behaves as a superfluid – but, it has been and continues to be undersupplied across the global marketplace.
Natural sources of helium are rare and locations were the gas is trapped in appropriate geology is rarer.
Alternatively, most commercial Helium production comes as a by-product of natural gas extraction.
The US accounts for about 55% of the world’s supply, followed by Qatar which provides just over 30%, after that Algeria and Australia yield 6% and 3% respectively. Stockpiles exist in US, Russia, Qatar, Algeria, and Iran. Meanwhile, newer and growing supplies are seen in Australia, Canada, and Tanzania.
Open supplies are tight and that presents an attractive backdrop for Helium One.
“Not only is Helium One among the few companies with a globally significant resource seeking to address the current helium supply crisis, it could also become the only company on AIM where investors can get involved with the exciting and expanding helium space,” David Minchin said in a statement.
Opportunity in Tanzania
Soon-to-be-listed Helium One is pursuing the development and continuing exploration of resources in Tanzania.
Helium One currently has some 138bn cubic feet of un-risked helium resources, at the ‘best’ estimates, and the broader resource estimate range is pitched at 30bn to 521bn cubic feet.
The company does, however, see much further running room to increase its helium resources.
At present the company has a portfolio spanning some 4,512 square kilometres, and, its prospect inventory to date comprises 21 prospects.
Efforts are underway to progress funding and a stock market listing, in order to give the company the wherewithal to advance the assets – by confirming resource volumes and by progressing the commercial case for development.
What management says