Royal Helium Ltd (TSX-V:RHC, OTCQB:RHCCF) said it has received a Competent Person's Report (CPR) from Calgary, Alberta-based GLJ Limited dated August 19, 2022, which provides an independent resources assessment and evaluation of its material helium assets to date.
Saskatoon-based Royal controls over 1 million acres of prospective helium land across southern Saskatchewan and southeastern Alberta.
The company said the CPR has been compiled in accordance with the guidelines set out in the AIM Note for Mining and Oil and Gas Companies. On August 17, 2022, Royal Helium announced its intention to seek a secondary listing of its shares on the London Stock Exchange's AIM market alongside its current listing on the TSX Venture Exchange, subject to the preparation and acceptance of all the requisite documentation.
Royal said it plans to obtain reports on its Climax conventional, Ogema and Val Marie wells in due course as additional work and testing data is compiled.
In a statement, Royal Helium CEO Andrew Davidson said: "We are pleased to receive this independent third-party evaluation from GLJ Ltd. In addition to being a regulatory requirement as part of the company's proposed listing on AIM, for us it affirms initial resources and economics that substantiates our first off-take sales agreement with a minimum delivery (no maximum) to our off-take partner of approximately 40% of the Steveville plant capacity.”
He added: "As for Nazare, a P50 at 114 meters (m) of pay thickness, 1.298 billion cubic feet of helium is extraordinary considering it is still constrained to 27 square kilometers with limited 3D seismic area.”
Davidson said the company was looking to drill its first horizontal well into Nazare between fourth quarter 2022 and the first quarter of 2023.
“Additionally, we have only explored 6% of the Climax land block with an additional 10 conventional targets in our near-term drill plans," he added.
With stable, rising prices and limited, non-renewable sources for helium, Royal plans to become a leading North American producer of the high-value commodity.
"The best estimate of risked contingent resources - development pending for Steveville has a risked net present value at 10% (before income taxes) of $22,192,000 for the 145 million cubic feet of company interest risked contingent marketable helium resources, which equates to an in-the-ground value of $153 per thousand cubic feet, after accounting for future capital expenditures, including the construction of a Helium Processing Plant and all pipelines, as well as future royalties, operating and maintenance expenses,” said Shayne Neigum, who is the chief operating officer at Royal Helium.
“This risked metric gives Royal the confidence to proceed with the installation of a gathering system and processing infrastructure at Steveville. The metrics provided by the GLJ report are a compelling incentive to accelerate the development of Nazare as well as Climax conventional, Ogema, Val Marie and other land blocks in Saskatchewan and Alberta."
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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