The helium sector continues to generate interest as a result of its critical use in the semiconductor, healthcare, space launch and nuclear energy sectors. Pulsar Helium Inc. (TSXV:PLSR) is a new entrant to the listed helium exploration space and has substantial news flow coming in the short term.
With a new year underway, the Vancouver, B.C.-based company announced the closing of a private placement in mid-January for a total of C$4.25 million and has big plans in the works in the coming months.
Private placement details
In a statement, Pulsar Helium revealed it had issued 18.5 million shares at a price of $0.23 each for the gross proceeds of just over $4.25 million.
The company said it plans to use the funds for the cost of the ongoing exploration programs on its helium projects and for general working capital purposes, which includes appraisal drilling at Pulsar Helium’s flagship Topaz project in Minnesota that has already been drilled and flowed a remarkable 10.5% helium concentration.
Pursuant to Canadian Securities Laws, all securities issued will be subject to a hold period of four months plus one day from the date of issuance which covers the appraisal drill scheduled for February.
As part of the private placement, Pulsar Helium’s strategic investor, ABCrescent acquired 15.5 million shares in the offering, accounting for roughly 16.7 per cent of the company’s outstanding shares.
Additionally, no finder’s fees were paid in connection with the investment by ABCrescent. Both entities also agreed that as long as ABCrescent maintains its investment in Pulsar Helium at or above 10 per cent, it will be entitled to nominate a person as a member of the Board of Directors of the company. Brice Laurent, managing partner of ABCrescent, has joined the Board of Pulsar Helium.
The Topaz Project
Located in Minnesota, the Topaz Project is a new helium discovery in a state where it is also one of the world’s highest-content helium occurrences. To date, it has been drilled and flowed at 10.5 per cent helium, for context, helium concentrations exceeding 0.3 per cent are considered of economic interest. In other words, this is substantial, to say the least.
The company has an exclusive lease with a private mineral rights holder for a 100 per cent working interest in more than 2,089 acres that entails the 2011 helium discovery hole. Pulsar also has an exclusive option to lease an additional 2,092 net acres, which will give the company rights to non-hydrocarbon gases, including without limitation, helium.
The next substantial work program is scheduled to occur in February when an appraisal drill program will commence. The well will be drilled next to the 2011 discovery and include all well tests that would be expected, including pressure and flow testing.
The investment opportunity
There is very little domestic supply of helium, and Pulsar Helium CEO Thomas Abraham-James previously told The Market Herald Canada that exploring for and supplying helium domestically is important because there has been a decade-long helium supply shortage.
In other words, Pulsar Helium is a unique play in the space and, with plenty of catalysts to watch for in the coming months, investors will be keeping their eyes peeled to see how the company delivers.
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