Helium One Global Ltd (AIM:HE1, OTCQB:HLOGF) has secured a £10 million investment from three institutional backers and formally received its mining licence for the Southern Rukwa helium project in Tanzania, paving the way for the development of two potentially significant sources of helium.
The AIM-listed company, which also holds a 50% interest in the Galactica-Pegasus project in Colorado, said the new funding will support planned testing at Southern Rukwa later this year and help bring its US operation to first gas and cash flow by the fourth quarter.
Alongside the institutional raise, Helium One is planning a further £1 million retail offer to give existing shareholders the opportunity to participate.
The £10 million investment, arranged by Marex Financial, comes in the form of an advance that may be converted into shares at the discretion of the investors, based on a set discount to the company’s share price.
Any unconverted balance will be repayable in 12 months, either in cash, shares or a combination of both.
Chairman James Smith said the raise was “an important step” that would help move both helium projects towards production and cash generation.
Chief executive Lorna Blaisse added that the licence award and new funds marked a key milestone for development at the Itumbula West discovery in Southern Rukwa.
With the 480km² mining licence now granted and joint venture company Songwe Helium, Helium One plans to begin further testing in the fourth quarter.
This will involve re-entering the ITW-1 well using an electric submersible pump to create artificial lift and increase gas flow.
The aim is to better understand the helium content in key rock formations and support final development planning, including a processing plant.
Regulatory agreements for Southern Rukwa are still being finalised, with a formal signing date yet to be confirmed. The Tanzanian government has already agreed to take a 17% free carried interest in the project.
Meanwhile, the Colorado-based Galactica-Pegasus project, operated by Blue Star Helium, is also set to benefit from the raise, with first gas targeted for later this year.