Helix Exploration has conditionally raised £5m in a shares placement on the London Stock Exchange (LSE).
Application will be made to the LSE for the new shares to be traded on the AIM – where Helix has been listed since April last year – which is expected on or around 29th January, with 3,763,333 shares issued at 15p a share.
The fundraise will be used principally to install and equip the PSA Processing Plant and Membrane Unit at Rudyard, fund the drilling of two additional production wells at Rudyard, and fund other exploration and resource definition work across projects and general working capital requirements.
CEO Bo Sears recently said results from Darwin #1 indicate that the anticline at Rudyard “surpasses our expectations” and is larger than previously modelled and could represent the largest producing helium structure in the State of Montana. First production is targeted for Q2.
The project offers proven helium gas up to 1.3% helium flowing to the surface from two adjacent wells and includes three stacked reservoir horizons within two co-joined domed anticlinal structures. Reserves now stand at 355mcf with resources of a southern part containing 280mcf. Peak volumes are 45-50mcf a year and net cash flow is targeted at $115-220m.
Read more: Rudyard project could be ‘largest helium in Montana’
It’s been a busy period for Helix Exploration. The flow test for helium was carried out early December, followed by the $500,000 acquisition of a used Xebec PSA processing plant between Christmas and new year – which cost around 10% of a new one.
“We were able to save a huge amount of money on the most expensive capital item, bringing a project into production,” said Chairman David Minchin.
“We received an updated economic model last week and our analysis showed that we would be better off doing an equity raise – so we pulled the trigger. In London, you don’t get a period when you can suspend when you’re raising so you need to do it quickly. The majority actually came out of existing shareholders, high net worths and long-term supporters of the company, but also from institutions.”
He said it marks a “strong start” for a small company to enter the helium market. “We’re in the heart of the US, the largest helium market in the world, with the most rapidly growing demand. With the onshoring of hi-tech manufacturing, the market is only growing. It’s the right time and right place.”
Once it is into its cashflow, Helix will pursue additional exploration and M&A opportunities, Minchin added.
“There are leases we want to pick up, there are good projects out there – we see ourselves becoming an agglomerator, to be producing not just from one project but a number, which makes us a strategic alternative supply of helium to the US.”
