Royal Helium Ltd (TSX-V:RHC, OTCQB:RHCCF) announced to raise $6 million for a drilling program at the 40 Mile project in Alberta and development work in Saskatchewan.
The helium-focused company said it would issue to the underwriters on a bought deal basis 66,667,000 units at $0.09 per unit.
Each unit will comprise a share and a share purchase warrant, with each warrant entitling the holder to purchase a share for $0.12 for three years from the offering’s closing date.
Royal Helium said it has granted the underwriters an option to increase the offering by up to 15% to cover over-allotments and for market stabilization purposes.
Research Capital Corporation will act as lead underwriter and sole bookrunner on behalf of a syndicate of underwriters.
The offering is expected to close on or about May 1, 2024.
The funds raised will be used by the company for new high-impact drilling at the 40 Mile project in southern Alberta, development through the Saskatchewan helium corridor, completion and testing of an existing discovery at the Ogema project, working capital and general corporate purposes.
At the Ogema project, drilling in 2021 returned helium concentration test results of 0.6% to 0.7%.
Royal Helium now intends to complete and test the newly acquired rights to the Ordovician Red River formation within the wellbore to support a production and plant decision, once final testing of both concentration and flow rate have been completed.
It highlighted that, since its Steveville helium purification facility in Alberta came online in December 2023, Royal Helium has delivered nine trailers of high-purity helium to its customer in the aerospace and defence industry.
It said it continues to ramp up its throughput volumes and increase the number of helium trailers leaving the plant gate. It expects to reach optimal run rate capacity volume over the coming months.