The importance of helium is vastly understated despite being the second-most abundant element in the world.
Although mostly associated with balloons, helium has far more uses than inflating balloons and blimps, which include: medical uses, MRI magnets, technology — including high-speed internet and cable — chips for mobile phones and computers, microscopes, airbags and many others.
What’s more, Canada has the fifth-largest helium resource in the world, with most of it located in Saskatchewan. The Canadian province is one of the
only jurisdictions in the world that allows the drilling of helium wells instead of as a by-product of hydrocarbon. This process makes Saskatchewan a more environmentally friendly jurisdiction than many others.
Royal Helium Ltd. (TSXV:RHC, OTC Pink:RHCCF, Forum) is a company focused in the development and exploration of primary helium in Saskatchewan, and is one of the largest helium leaseholders in Canada.
The company holds over 400,000 hectares — or 4,000 square kilometres — of prospective helium lands in the province through a combination of five-year permits and 21-yer leases. Royal Helium is also focused in two areas in Saskatchewan: its Climax Project in the southwest region of the province which has seven well targets; and its Bengough Project in southcentral Saskatchewan with five target wells.
Large helium discovery and production planning
In mid-May,
Royal Helium announced it had made a significant helium discovery at its Climax helium project. A 39 metre contiguous helium bearing zone was discovered at Climax-3 in the basal Deadwood Regolith —a previously known helium bearing sequence.
“The discovery of the Regolith is a major moment for Royal. The sheer scale of this formation and the fact it is consistently helium charged is a significant step in proving long-term and large-scale helium production in Saskatchewan,” Steven Halabura, vice president of exploration for Royal Helium, said in a release.”
Halbura explained that additional development of Regolith could potentially advance Royal Helium from a small explorer to large producer “in the relative near-term.”
As such, highlights of the results include internal estimates of helium-in-place, which are split into two categories.
High: 6 billion cubic feet (bcf) of helium for the prospective area, which is made up of 0.5 bcf of helium per square mile. The high estimate assumes a 0.65 per cent helium gas concentration, net porosity of 8 per cent and an average thickness of 39 metres.
Low: 2.5 bcf of helium for the same area, which is made up of 0.2 bcf of helium per square mile. Additionally, the low estimate includes a 0.55 per cent helium gas concentration, net porosity of 5 per cent and an average reservoir thickness of 20 metres across the area.
In total, these estimates assume a 25 per cent water saturation but aren’t inclusive of any adjustment for recovery factor nor a deduction for unidentified reservoir-level anomalies or plant process losses.
“Entering this drill program, we were targeting conventional helium production, which we have found in Climax -1, Climax -2 and potentially Climax -3,” Andrew Davidson, president and CEO of Royal Helium, said in a a press release. “We are now evaluating the completion methodology of the Regolith which may include horizontal drilling and/or fracture stimulation in order to maximize the productive capacity of this zone."
Sample results from Climax-1 include 0.33-0.39 per cent helium at Souris River, 86.6-95.6 per cent nitrogen at Souris River and Wymark, and 89.8-94.7 per cent carbon dioxide at Waymark.
The company expects that production planning will begin soon at Climax-1, while Royal Helium is currently in discussions with potential processing partners.
Meanwhile operations at Climax-2 were temporarily halted due to break-up. That being said, the Regolith sequence is also present in Climax-2 and still remains untested.
An investment opportunity as helium shortages ease
Although helium has been in low supply, shortages have begun easing thanks to an increase in supply and prices lowering.
Royal Helium is in a solid position to become a major helium supplier in the province of Saskatchewan thanks to permits, leases, and strategic collaborations as it works towards building its helium facility.
What’s more, with its footprint in Saskatchewan — which is one of the largest contributors to Canada’s helium resources — investors can guarantee that as helium becomes more valuable, so, too, will Royal Helium.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.