Helium One LON:HE1 the AIM-listed, African-focused helium exploration company’s shares are moving in the right direction. Opening the week (1st July) at 0.7795p, which is up 218% this year so far.
Nevertheless, Helium One’s share have a fair bit of ground to make up. This time last year HE1 shares were changing hands at 5.8p, 86% ahead where it began the week. And three years ago, they were 25p. However, Helium One has been topping the charts consistently over the year.
- Could EngageXR be a good option for investors in 2025?
- TruFin rebounds from Lloyds Bank contract loss
- Quadrise shares up over 300% in two-months
So what’s changed? At the end of 2022 The Armchair Trader highlighted that Helium One was sitting on the cusp of a significant global helium deposit in Tanzania. Since then, the explorer has made significant progress at its 100% operated Rukwa project and is in position to extend its well test at Itumbula West-1.
Helium One rig set for drilling
All the pieces are in place, with Helium One’s own rig on site champing at the bit to get drilling, and the company having acquired well control equipment to complement the drilling rig. It is hoped that the new well will be spudded this month.
Lorna Blaisse, Helium One’s CEO said in a statement: “As we fast approach the next operational phase, we are on track to commence the crucial EWT operations at Itumbula West-1 in July. This is a very exciting time for the company as the test will enable us to determine commercial flow rates, reservoir performance and helium concentrations over a longer period. The results of this EWT will enable us to better determine resource estimates and fully evaluate the potential of this new fault-fracture helium play we have at Itumbula.”
4.7% helium-to-surface flow
Interest in the company – a long-term favourite of smaller investors – started to heat up as the explorer managed to flow 4.7% helium-to-surface from the ITW-1 exploration well in February, proving that the company’s previous announcement was not just hot air.
The new drilling programme will re-enter the cased and suspended well, deepening it and testing more fractures in the fractured basement helium deposit. The drilling programme will take from four-to-six weeks to complete.
The programme will evaluate the reservoir’s performance, assess commercial flow rates and concentrations of helium over longer time periods. This will be achieved with an on-site field laboratory.
Application to switch from prospecting to mining
If all the data checks out, Helium One will submit an application to the Tanzanian regulator to switch its prospecting licence to a mining licence and go into development-to-production.
Last month the explorer raised GBP8m in a placement undertaken by Liberum Capital and Zeus Capital with Axis Capital Markets the placing agent, issuing 1,600,000,000 new ordinary shares at a price of 0.50 pence per share and a subscription. Funds will be used to conduct the extended well test at Itumbula West-1 that will pave the way for its mining application and development of Rukwa.
Helium One’s recent share price ramp reflects growing optimism around its Tanzanian helium project. The upcoming extended well test at Itumbula West-1, coupled with the recent fundraising, positions the company for a pivotal moment. If successful, the well test could pave the way for a mining license and development, potentially making Helium One a key player in the global helium market.
Despite the longer-term fall in share price we believe that Helium One still offers an intriguing prospect with the global interest in helium intensifying and the company being first-mover in the country.
