Royal Helium Ltd (TSX-V:RHC, OTCQB:RHCCF) told investors it has started loading purified helium into specialized ISO trailers at its Steveville helium purification facility in southeast Alberta, marking the start of commercial sales.
The company's share rose 9.1% to C$0.30 by late Tuesday morning in Toronto.
In a statement, the company said volumes from the first facility will go towards fulfilling an offtake agreement with a major North American aerospace customer, which has contracted to purchase Steveville facility volumes over the next several years.
It noted that the offtake agreements it has established over the past two years deliver volumes at an average price that exceeds US$500 per thousand cubic feet (mcf). Given the increasing demand for purified helium combined with the current geopolitical backdrop further constraining the supply of key resources, Royal Helium said it expects a robust pricing environment for the foreseeable future.
The company said it plans to add several additional purification facilities in 2024, using the operating cash flow it generates from its high-margin production activities, and is in talks with several parties interested in establishing offtake agreements relating to its forthcoming facilities.
"As we prepare our flagship delivery, the company is proud to be entering into this new and exciting phase of our business, making Royal Helium one of the leading, active suppliers of purified helium directly to end-users,” Royal Helium president and CEO Andrew Davidson commented.
Royal Helium's 100%-owned state-of-the-art purification facility at Steveville was purpose-built to recover 99.999% helium while setting the highest standards for environmental efficiencies and to produce an exceptionally low carbon footprint.
The Steveville plant will benefit from carbon credits generated under the Technology Innovation and Emissions Reduction System (TIER system) in Alberta. As these carbon credits are monetized, they can provide the company with a material additional cash flow stream.
Royal Helium is an exploration, production, and infrastructure company with a primary focus on the development and production of helium and associated gases.
~Updated with share price movement~
Contact the author at stephen.gunnion@proactiveinvestors.com