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Helium One: what to expect from this popular junior miner in 2023

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Helium One Global [LON:HE1] remains one of the most popular junior miners on the AIM market. Investors in the stock are getting excited as the helium explorer plans to start further drilling in Tanzania in Q1 of next year.

The company is targeting helium reservoirs that are sitting 1300 metres under the African country which could potentially be a find large enough to re-define the global market for helium. The company is targeting potential reservoirs at Rukwa in the New Year, which according to broker Liberum, could provide 350,000 mcf of helium per year. This would translate into an EBITDA of $94m.

Stock rallying in wake of placement

The stock is in the process of rallying again as we approach the Christmas break. Shares have been pretty volatile and at time of writing were priced at just over the 7p mark. They are up just over 5% on the 12 month picture. BUT the stock has given up much of its value since April when it was trading at over 11p.

There was a bit of a dampener earlier this month when Helium One announced a fund raise was going to be expanded to £9.9m. This was based on significant investor demand, the company stated (it carries a well above average number of retail investors on its shareholder register). The shares were issued at 5p, which was a 26% discount to the mid-market price at 12 December, although they seem to be trading in the money now.

The capital raised through the fund raising is going to be used to progress the company’s Phase II drill program at Tai. According to CEO David Minchin, “A discovery made at Tai will help to unlock the value of our entire portfolio and help grow the company into a strategic player in developing a new supply in this high value, high demand, high tech commodity.”


When we met Minchin earlier this year, the availability of appropriate drill kit in Africa and the need to ship parts from North America were vexing him – and shareholders – who were impatient for more substantial exploration activity to proceed.

Bigger than expected fund raises can have the effect of causing some investors to sell out, which seems to have been the case with Helium One.

Potentially market-defining helium opportunity

But lets not forget the potentially massive opportunity here. According to sources in Tanzania, the unrisked Prospective Recoverable Helium Resource in the region of the primary project at Rukwa stands at 138bn bcf according to local geological experts, making it the largest known primary helium deposit in the world.  This has the potential to significantly alleviate global shortages in the gas that is used in the medical diagnosis sector among others.

Shortages have also been exacerbated as the war in Ukraine has compromised supplies coming out of Russia.  The current global market for bulk liquid helium is estimated at $2.7bn. The unit price per dollar has risen by over 135% in the last three years.

With the share price now well down on where it was in Q1, Helium One does look more interesting as a higher risk, junior mining bet than it did. Obviously there will be plenty of focus on the drill results in the New Year. Local intelligence from geologists in Tanzania broadly supports the findings from Helium One. This is a stock that could really pop if the drill results are anything to be expected.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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