Royal Helium Ltd (TSX-V:RHC, OTCQB:RHCCF) has reached a major milestone as it progresses to the first commercial sales of purified helium from its Steveville helium purification facility in southeast Alberta.
After completing the commissioning of the facility in October 2023, the company has started loading specialized ISO trailers to fulfil an offtake agreement with a major North American aerospace customer, which has contracted to purchase Steveville facility volumes over the next several years.
In an exclusive interview with Proactive's Steve Darling, CEO Andrew Davidson said Royal Helium has achieved an industry first.
Proactive: You’ve reached the point of commercializing your product. Can you give us an update?
Andrew Davidson: We've been patiently going through this process of bringing the plant online. Over the weekend, we finally got to the point where we are loading purified helium into our sales trailers and getting ready to ship them off to our customers. It’s a pretty big moment for us. It takes it from an idea through to construction through to an actual business. It feels good.
I can imagine. Can you talk a bit about these specialized trailers that you use, just so people understand what the process is; where they're going to go and what they do when they get there?
The trailers we use are purpose-built for helium. All helium companies use a version of the same gaseous trailer. They're built for high-pressure helium sales and they have the ability to store a bit longer than a regular tanker truck would.
We load them at about 3,600 psi — that's the high pressure they go down to. When they leave our site, they actually go to a liquefier in Colorado, where they're converted into liquid and then our customer picks it up right from their door.
Yes, you mentioned that you've got customers, and that's always a positive, but you're also looking at others as well. With the pricing you're at right now, this is quite lucrative to be doing this.
It certainly is. The pricing environment and helium continue to be beneficial for both exploration and production companies. So we're coming to market at a very nice time; our customer has been great to deal with. And we are looking to grow relatively aggressively. As we bring on other plants in the coming 12 to 18 months, those will have more than likely different customers than what we have now.
We have started that process now; contracting out the next proposed volumes that we'll bring to market and that's a whole separate new price negotiation. The results of that I think, are going to be quite beneficial to our shareholders as well because believe it or not, the price is actually continuing to move up from the average of just over US$500 that we're getting now.
Andrew, what do you want people to know about Royal Helium and the state you're at right now, and really where the company can go over the next 18 months?
Right now, we're the first publicly traded helium producer that is purely independent, where we own our facilities 100% and we sell directly to end users. That's something that's, frankly, never been seen before in public markets, as far as we know. The ability to grow and to repeat what we have just accomplished at some scale is very much within our capabilities here with a million acres of ground at various levels of proven and unproven. We can do this again and again and again.
This interview was edited for style and clarity