Building the Future of North American Helium What makes helium so valuable? First of all, it’s non-renewable as the gas is so light it vents straight into the atmosphere, it’s also hard to source and is commonly found as a byproduct of natural gas, and it’s used in a number of industries such as manufacturing, cryogenics, and aerospace. With looming shortages and high spot prices, it has never been a more profitable time to be in the industry.
https://www.blm.gov/programs/energy-and-minerals/helium/about-helium#:~:text=Helium%20is%20a%20non%2Drenewable,0.3%20percent%20and%202.7%20percent).
Most publicly traded companies that produce helium are still in the exploration stage, however, one company is still valued as an explorer and has recently entered into production. Since closing the JV acquisition at the Pinta South property, $TOH.V is ready to begin scaling revenue and generating cash flows.
- Entitled to 20% interest in 2 currently producing wells with 50% interest 8 more currently underway to be connected to a helium processing plant with plans to have 20 operational by the end of H1 2023.
- They have a relationship with one of the world's largest companies, Linde, with a $500/Mcf off-take agreement for the first 10 wells.
- Not only are they going to produce, they also hold an interest in storing helium which will give them a competitive advantage against companies who won’t have the ability to supply helium on demand.
- Cash flows could potentially reach up to $52M by 2025, and with the upside in spot pricing due to the growing shortage, this could become even higher.
Check out this recent interview to learn more: https://thedeepdive.ca/total-helium-tackling-the-helium-shortage-with-robert-price/
Considering the rapidly growing cash flows/off-take agreement, strong management team/low-cost strategy, and current valuation being only $32M (lower than some companies that haven’t even reached production), there’s a lot of upside considering the potential to build over 150 wells with grades of around 5-8% helium.
Posted on behalf of Total Helium Ltd.