Helium One Global Ltd's (AIM:HE1, OTCQB:HLOGF) latest test of its Tanzania well feels like a "big step towards demonstration of commerciality", said Panmure Liberum in a note.
Itumbula West-1 (ITW-1) flowed at a maximum rate of 2,701 barrels per day, equating to 834 standard cubic feet per day (scf/d) of helium.
The company’s internal modelling suggests the rate could increase to 6,176 scf/d using artificial lift in future production phases.
ITW-1 yielded helium from two key intervals: the fractured basement interval, which yielded an average of 5.5% helium, and the faulted Karoo Group, which produced 5.2% helium, both corrected for air.
Maximum helium concentrations of 6.7% and 7.9% were recorded from the Basement and Karoo intervals, respectively.
"The results are very encouraging, and de-risk the potential of the Itumbula area and we feel this is a big step towards demonstration of commerciality," said Panmure Liberum.
The boutique investment bank reiterated its 'buy' advice and 3.4p a share price target. In early afternoon trading, the stock was up 5% to 1.16p.
It has maintained its forecasts, noting that development milestones could trigger a share re-rating.
P-L sees no issues with the Tanzania mining licence application, aside from timing. Investors are expected to focus on the recent US acquisition, which presents an opportunity for early production and revenue, P-L added.