Helium One Global Ltd (AIM:HE1, OTCQB:HLOGF) boss Lorna Blaisse sat down with Proactive's Stephen Gunnion to discuss its most recent £8 million raise, addressing the uses for the cash, how the projects are expected to evolve because of it and some of the shareholder discomfort regarding the pricing structure of the offer.
Stephen Gunnion: So, Lorna, you successfully raised £8 million. Great news. Can you give us a bit more colour on this?
Lorna Blaisse: Yeah, sure. It is really positive news for the company. This £8 million will enable us to move forward into our phase three operation, which is the execution of that all-important extended well test on Itumbula West, to move us into the next phase of development. It was a difficult raise. I appreciate that a lot of shareholders are understandably quite disgruntled for various reasons. It’s quite a complicated process, but we were not in a position to dictate the issue price for the placing. It was always our intention to offer to retail from the outset, but unfortunately, we were precluded from doing this in the process.
We are not comfortable with it, and it was certainly not our original intention. We didn’t want to raise at this level either, but that is what we had to do to get the funding. It’s important to the company that we progress and move on with the next phase of the operation.
Stephen Gunnion: Lorna, what will the £8 million fund primarily?
Lorna Blaisse: The primary focus is on the all-important extended well test for OS, following the success of that well flowing 4.7% concentration of helium to the surface. The purpose of this extended well test is to ultimately prove up commerciality of the prospect and the project. The funding will also go towards the completion of the feasibility study that’s currently underway and will integrate all of the results and ongoing technical subsurface work.
That feasibility study, along with the issue work, will be submitted to the government to enable us to apply for the all-important mining license application post-results, which will enable us to advance into the development phase.
Stephen Gunnion: What’s the extended well test expected to deliver, Lorna?
Lorna Blaisse: The main focus is to effectively demonstrate commerciality. We will be drilling slightly 100 to 150 meters into the fractured basement play, which we believe is the primary play type here. Once we’ve drilled a little bit deeper, we will commence the extended well test itself over several intervals.
The extended well test is done over a period of days and weeks, unlike the usual stem test that was performed in the phase two operation. This will enable us to determine longer-term flow rates, establish commerciality, evaluate helium concentrations, and ultimately, assess reservoir strength and fracture performance.
Stephen Gunnion: What are the next steps then? And what’s your expected timeline for all this?
Lorna Blaisse: The long lead items have been on order for several months now, and some of which we are awaiting mobilization to the site over the next few weeks. We will update the market accordingly. In addition to the long leads, we will mobilize the crew to the site.
We already have the rig there and a very small crew keeping it working over and well-stocked for us. We’ll start mobilizing personnel, expanding the camp again, and focusing on the commencement of the extended well test itself. There is a lot of work going on behind the scenes with the growing subsurface team that we’ve built over the last few months.
There’s a lot of work integrating across multi-discipline teams, resource engineers, development geologists, etc., building detailed subsurface structural models of this fault fracture play. Once we have the results from the extended well test, it will be integrated into the modeling and form the basis of the mining license application. Looking further ahead, we hope to prove up commercialization of the significant helium project in tandem.