Quantum Helium Ltd (AIM:QHE) has raised £5 million in an institutional placing, giving the AIM-listed group fresh capital to push ahead with development work at its Sagebrush and Coyote Wash helium projects in the US.
The company is issuing 16.67 billion new shares at 0.03p each in the conditional placing, which it said was backed by institutional investors that had approached the company amid rising interest in its helium portfolio and the strategic appeal of domestic US supply.
Quantum said the cash will fund development planning and engineering at Sagebrush, permitting and drill-ready work at the wholly owned Coyote Wash asset, plus infrastructure design, technical studies and working capital.
Carl Dumbrell, Quantum chair, said the firm will now have "the strongest financial position it has ever been in".
"This is a very strong outcome for the company, and we are pleased to have secured the support of a number of high-quality institutional investors who recognised the strength of our asset base and the opportunity we are developing," he added.
The raise lands as Quantum advances its extended production test at Sagebrush-1, which it said is continuing in line with expectations and is already funded from existing cash.
The next step is the perforation and testing of the first of two Leadville Formation zones, with the Lower Leadville due to be tested first. The programme is designed to assess flow rates and confirm historical helium concentrations, including the previously reported 2.76% helium, as the company works toward converting resources into reserves.
Quantum, meanwhile, promised a number of operational updates in the coming weeks as testing continues at Sagebrush-1.
"We are particularly excited about the upcoming perforation of the Lower Leadville Formation, which is expected to provide critical data on helium concentrations and flow rates. This will build on the historic results and further strengthen our understanding of the reservoir," said chief executive Howard McLaughlin.
"With this successful placing, we are now fully funded to execute our broader work programme across both Sagebrush and Coyote Wash. We have a number of important and exciting milestones ahead, and remain confident in the outcome of the extended production test."