Helium One Global Ltd (AIM:HE1, OTCQB:HLOGF) shares soared some 20% higher in Wednesday’s dealings as the closely followed AIM-quoted firm posted its second positive project update in two days.
TEarlier, it announced it has finalised negotiations with the Tanzanian Government for the award of a Mining Licence for its Southern Rukwa helium project.
A new joint venture company, Songwe Helium Ltd, will be established, with 83% owned by Helium One and 17% by the Government.
A day earlier, Helium One reported the completion of its 2025 development drilling programme at its 50%-owned Galactica-Pegasus project in Colorado. All six wells delivered positive results, confirming production potential and near-term monetisation prospects.
In London, on Wednesday, Helium One shares rose 0.17p or 21% to trade at 0.99p, valuing the business at around £60 million. At one point, the shares changed hands as high as 1.05p.
Advancing in Tanzania
"We are delighted to have concluded negotiations and reached agreement with the Tanzanian Government's negotiations team on all documents and associated agreements that are required to complete the formal award of the ML for the southern Rukwa helium project,” said chief executive Lorna Blaisse.
“This is the culmination of several years of intense activity and hard work that has included the drilling of several successful exploration wells, the discovery of helium resources, undertaking an extended well test and the filing of the ML application in September last year.”
Helium One chair James Smith, meanwhile, added: "This is a pivotal period in the company's increasing maturity and growth.
“The last 18 months have seen exceptional progress as we have met a series of challenges with vigour and professionalism.
“Getting to this point would not have been possible without the continued support from the Government of Tanzania, and I would like to take this opportunity to thank them as well as the local communities where we operate, who have helped us and enabled us to deliver this project.”
Patience needed
Panmure Liberum analyst Ashley Kelty described it as “a positive update”, highlighting that the new licence framework allows Helium One to develop substantial helium resources across the acreage in Tanzania.
Kelty cautioned, however, that investors should be patient as “being at the forefront of a new sector just takes time”.
In Wednesday’s note, the analyst added: “The process has taken a bit longer due to the fact that HE1H are trailblazers and the first company looking to commercialise He in Tanzania, and this means that a new regulatory framework has needed to be created.
“While this take longer, it does offer a more favourable situation for HE1H as it has been involved in the negotiations and will have been able to help shape a framework that works well for them.”
Towards production in Colorado
Helium One’s successful programme in Colorado marks the company’s transition toward production and revenue.
"This has been a successful development campaign, with consistently good flow rates and helium concentrations within the expected ranges,” Blaisse said on Tuesday.
The State-9 well flowed naturally during drilling and reached over 360 thousand cubic feet per day. Helium concentrations of up to 1.52% were recorded.
Projected stabilised flow rates range from 400 to 500 Mcfd, with a maximum of 600 Mcfd.
The company plans to move to initial production in the fourth quarter, using the Pinon Canyon Plant, to be installed near the Jackson-31 well.
“We appreciate the efforts of Blue Star in driving this operation, and very much look forward to the next steps in bringing these wells online and targeting first production and cash flow in Q4 this year,” Blaisse said.
She added: “We have a clear development plan in place for the construction of the processing facility, the tying in of the wells and the subsequent testing and commissioning to take us through to first production and are excited about the wider field development potential across the Galactica-Pegasus resource."
Looking ahead, the next steps include finalising plant design, civil works, equipment mobilisation, and well tie-ins.
A second phase will aim to expand helium output and monetise CO2 resources. The joint venture is also developing a marketing strategy to secure offtake partners.
Helium One holds a 50% working interest in the Galactica-Pegasus project, alongside partner Blue Star Helium.