Royal Helium Ltd (TSX-V:RHC, OTCQB:RHCCF) told investors it has completed the commissioning of its Steveville helium purification facility and has commenced the start-up of the southeast Alberta facility.
Describing it as a “pivotal moment” for the company and its shareholders, president and CEO Andrew Davidson said following a successful start-up, Royal will begin ramping up towards full commercial production, making it the first publicly listed helium producer operating in Canada.
The company's shares traded 17% higher at C$0.34 shortly before midday in Toronto.
“Only a few short years after we first began drilling our helium wells and 12 months of design, fabrication, and construction of the Steveville plant, we are now pleased to announce start-up following the successful completion of the assembly and commissioning phases,” Davidson added.
The company noted that the Steveville plant is engineered to process 15 million cubic feet per day of raw gas fed by two of the 100%-owned helium wells at Steveville with an output capacity of approximately 22,000 mcf (thousand cubic feet) of 99.999% helium per year.
Additionally, it said the production capacity of the facility fully delivers on the three-year purchase commitments from the company’s two offtake partner agreements in the major North American aerospace and space launch industries at an average price of USD $538 per mcf helium (C$730/mcf).
The facility has an ultra-low operating cost due to it being self-powered by fuel gas co-produced from the two helium wells, it added.
Royal said the Steveville plant will materially benefit from carbon credits, generated under the Technology Innovation and Emissions Reduction System (TIER system) in Alberta. As these carbon credits are monetized it will have the ability to provide shareholders with a material additional cash flow stream.
~Updates with share price movement~
Contact the author at stephen.gunnion@proactiveinvestors.com