Royal Helium Ltd (TSX-V:RHC, OTCQB:RHCCF) has announced a new partnership with Sparrow Hawk Developments, which is committing to spend $25 million on the Val Marie helium project, in Saskatchewan.
The deal – a participation agreement and letter of intent – envisages the collaboration on a drill program and the construction of a helium purification facility.
It is anticipated that Sparrow Hawk will earn a 57.5% non-operating stake in the joint venture project’s wells and 46% of the processing facility.
"This joint venture represents an exciting next step in Royal's mission to advance the development of its extensive helium resources and bring additional facilities online each year,” Royal Helium chief executive Andrew Davidson said in a statement.
“Of equal importance, this partnership highlights Royal's commitment toward further inclusion of First Nations groups in the resource development activities and the economic growth in the province.”
“This historical partnership with Sparrow Hawk to advance the economic development in the Treaty 4 Territory is an important first step toward these objectives.”
Davidson added: “This important Agreement and LOI ensures First Nations participation at the earliest possible stage for resource development in the province with a shared commitment to economic reconciliation and benefit."
Alex Fallon, Sparrow Hawk chief executive, meanwhile, commented: “This partnership and our planned ownership in helium production plants and of the helium resource itself, is not only a form of economic reconciliation, but it also sets the path for a multimillion-dollar investment to develop Saskatchewan's helium sector and export helium to customers around the globe."
"This is a historic partnership that will provide Sparrow Hawk with ownership in a major critical minerals project and honours the spirit of Treaty 4 which was to share the resources in this land.”
The proposed agreement remains subject to final financial arrangements and securing the customary regulatory approvals.
In Toronto, Royal Helium stock was suspended prior to this morning’s announcement and is due to resume at 10:30 ET.