(Image via Desert Mountain Energy Corp.)
One of the hottest commodities for investors right now is helium. Demand has increased exponentially in recent years while supplies have steadily decreased.
It is valued for more than just filling balloons. Thanks to being seven times lighter than air and far less reactive than hydrogen, this gas’ use can be found in MRI machines, fibre optic cables for internet and TV, computer chips and hardware, vehicle airbags, and more … its uses are incredibly varied, but the lightest element in the universe is also the second most rare freely occurring gas in our atmosphere.
What this means is that now is the prime time for companies engaged in the exploration and production in helium. With demand and price points so high, those who are engaged in extracting this non-renewable gas are sitting on a resource that would increase in value over time.
One of the top sources of helium is Northeastern Arizona’s Holbrook Basin. According to a recent report titled
“Feasibility of New Helium Well Development in the Holbrook Basin, Arizona” published in May 2021 by Colorado School of Mines Graduate Geologist Jacob Smith, the 8-10% helium concentrations in older fields within the basin were some of the highest recorded in the world.
(Figure 1. Regional map showing the location of the Holbrook Basin and areas where significant helium concentrations have been encountered in Northeast Arizona. A) Tohache Wash Field, B) Dineh-bi-Keyah Field, C) Pinta Dome Field, D) Navajo Springs Field, E) St. Johns-Springerville area (Rauzi & Fellows, 2003).)
There is a lot of exploration potential in the Holbrook Basin, with gas samples from the Pinta Dome’s Coconino Sandstone show that the likely source of helium is radioactive decay in shallow crustal basement rocks.
One Company that has access to much of the Holbrook Basin outside the Pinta Dome region is
Desert Mountain Energy Corp. (TSX-V: DME, OTCQX: DMEHF, Forum).
Headquartered in Vancouver, British Columbia, Desert Mountain Energy is an exploratory resource Company engaged in the exploration and development of helium properties in the Southwestern United States. Currently, the Company is advancing its Flagship Tier 1 Helium Project in Arizona’s Holbrook Basin, an area with great potential for untapped helium deposits, potentially the highest-grade helium properties, and productive rare earth gas properties.
The Pinta Dome was where historic production was mainly focused, as well as Navajo Springs, and East Navajo Springs fields. With structural mapping occurring along with stratigraphic knowledge gained from previous drilling in the area, the best places for exploration and new wells can be discovered with even greater clarity.
Desert Mountain Energy completed
two new wells in the Holbrook Basin in 2020 and significant helium deposits were found in both wells.
Gas analysis from one slate showed concentrations of 7.1321% helium, 77.0837% nitrogen, 4.0183% CO
2, and 2.6512% methane and other minor gases. Another slate’s analysis showed concentrations of 4.0904% helium, 90.2742% nitrogen, 0.0063% CO
2, and 3.5535% methane and other minor gases.
The Company is working to see these two new wells producing in late 2021 at its helium-separation plant in Navajo County, Arizona. Once construction is complete, the processing plant will use a combination of pressure swing adsorption and membrane technology to refine helium produced from the wells. The refining process is simplified by the low percentage of natural gas associated with the helium.
DME’s Chairman and Chief Executive Officer, Robert Rohlfing explained in Smith’s report that while the total cost of the helium-separation plant is proprietary, construction of the plant is projected to save the Company more than $7.5 million (USD) compared with other processing options.
The Company followed this up with drilling at its third well in Arizona in
December 2020, set to be drilled to a total depth of approximately 620 metres. This well is located approximately 112 km west of the first two wells and is intended to prove up several significant geological structures in the western portion of the basin.
Smith’s report also noted that refining helium at the plant will reduce transport costs and increase the value of the produced helium by providing industry with a more highly concentrated product. The Company is planning further helium exploration in the Holbrook Basin if production is successful.
(Desert Mountain Energy Corp. stock chart – June 2020 to June 2021. Click to enlarge.)
Desert Mountain Energy has seen a sizeable jump in its share price since drilling its two successful helium exploration wells last year. In that time, its stock price has rallied more than 1,000% with a 178% increase year-to-date. This surge in value is a clear reference that the team leading this Company is on the right track with its exploration work and is delivering results with high stock value as well as high grades of helium.
In
late May 2021, DME announced that it had completed forced conversion of 2 series of 2 year, $2 warrants attached to the Company's October 2020, $1.60 unit financing:
- $2.00 warrants exercised totaled 8,103,062 realizing $16,206,124
- Shares currently outstanding 70,260,909
- Warrants outstanding 4,082,266
- Options outstanding 6,467,500
- Fully diluted shares, warrants and options 80,810,675
- Total Cash currently in the treasury $29,270,078.81
Desert Mountain Energy Corp. is planning on building a vertically integrated helium producer and the Company is currently drilling at
Well #4. There will be a lot of further news to cover from this Company, stay tuned to Stockhouse for future editorial coming soon.
For more on this Company’s operations, visit
desertmountainenergy.com.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.