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Royal Helium Ltd (RHC)

TSXV
Currency in CAD
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0.0750
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RHC Comments

I'm hopeful. The recent addition of Brent Ziegler as Helium Technical Lead to advisory board is a welcome IMO - bringing a wealth of extensive experience that will drive RHC expansion into production and sales. Furthermore, I'm optimistic regarding their offtake agreements and expanded helium resources from discovery.
They're definitely starting to show progress toward production with the addition of David T. Young and the recent closing/utilization of the $17.5M debt facility. Lot's of potential here now.
We can all see the great potential for RHC at this time and the speculation and excitement around the imminent production at Steveville is palpable. As they move closer to actual production I can anticipate even more growth as additional investors take notice, not to mention the inevitable news of more offtake agreements.
RHC's secured funding to build their flagship production facility in southern Alberta, they've aggressively drilled 1M+ acres of properties across Saskatchewan and Alberta with initial production at this facility is slated for Q2 2023 and is expected to produce in the range of 10-15M cubic feet/day at 99.999% helium purity.
I think the latest appointment adding Brian Weston to the RHC advisory board is a pretty big deal, he was the former VP of Encana (now Ovintiv) and has 40+ yrs experience in the oil/gas industry. His experience and involvement in some of the largest gas/liquid plays in Alberta (like Motney and Duvernay) are practically invaluable as RHC continues developing their helium portfolio across Western North America..
Royal Helium secured CAD $15M credit facility with the BDC and CWB for production facilities in Alberta. CWB also provided CAD $2.5M operating loan. Debt facilities expected to close in Feb. Remaining conditions waived for CAD $5.5M from bought deal private placement of convertible debenture units. The Steveville plant is fully funded for Q2 2023 production.
The plant is under construction and is funded meaning there's only a short amount of time before we see it go online.
Development is going smoothly, once they have the cash in hand they'll start to bring a larger focus onto production to start generating some revenue!
I’ve noticed it’s been a bit quiet on the RHC front lately, but this gave me an opportunity to digest more of the recent updates around the company’s financing.. With the provision of a US$20M 3-year credit facility this will mean the processing facility production constructions are fully funded enabling their Steveville plant to begin helium deliveries to their off-take partners by April 2023. This plant will produce 10-15M cubic feet/day with purity levels of 99.999% helium.
Royal Helium CEO Andrew Davidson joins the BNN Bloomberg segment “Saskatchewan appears to be the only place in the world to drill pure helium” to discuss the company’s unique positioning in the province with their 1M+ acres of helium development land. Recent financing raising $15M will fully fund their plans for the next year at least, accelerating project development, additional drilling and expanding their project footprint.
Royal Helium is on-track to construct the first and only helium processing plant in Alberta, already with an exclusive 3-year offtake agreement with a major North American space launch company. This direct producer offtake agreement is setting a new course in the helium market, cutting out the middleman, and creating more pricing transparency in the known murky spot helium pricing. Andrew Davidson, RHC CEO is quoted:“More than likely we’ll be the first to actually disclose pricing because we’ll be in production by Q2 2023 and as a public company, we do have to disclose obviously revenues and volumes, so it’s going to be pretty easy to figure out.”
Up until this point, the helium market was dominated by industrial gas companies buying from producers, processing it and selling to end users with contracts filled with NDAs where players can’t share pricing information amongst themselves or even with consumers. However, RHC is aiming to change things up starting with their 3-year offtake agreement with the unnamed, major North American space exploration company as a means to cut out the ‘middleman’ , a practice happening more and more, shaking up the industry.
Royal Helium’s closing of the over-allotment option equates to more funding accelerating the engineering and construction of their Steveville Helium plant - a plant with operating throughput in the range of 10-15M cubic feet/day producing a purity level 99.999% helium - the minimum delivery for RHC’s first multi-year fixed price sales agreement represents ~40% of this plant’s capacity.
Royal Helium announced closing an over-allotment option for more funding toward construction of the Steveville Helium plant. Hannam & Partners reckons Royal will generate C$12.8M of revenues in 2023, rising to C$19.1M the year after. The operating costs are so low that 2024 underlying earnings (EBITDA) would be just over C$17M, according to the research house, or C$9.1M at the pre-tax level. With Royal Helium less than six months away from first production, at which point business will be largely de-risked.
Royal Helium CEO Andrew Davidson is interviewed on IG UK discussing their path to London IPO (happening in November) with a goal to raise $20M & maiden production plans for early '23 - FYI RHC has also recently announced award of construction contract for their Steveville Helium recovery plant build. Clip on YouTube titled: Canadian-listed Royal Helium nears London IPO
Sharing the replay for the September 29 webinar hosted by RHC. Great session here with lots of great content here and timestamped. Definitely worth catching up with the latest including project updates, new resource assessments following discoveries of lithium, and a thorough overview of near-term activity and key catalysts including initial production schedules throughout F’23. YouTube video titled: Royal Helium (RHC) CEO Andrew Davidson Update: Steveville, Climax, Nazare, Val Marie, Ogema
Tons of promising news coming from RHC lately noting the announcement of lithium discoveries at Climax-1 and 2, now making them potentially one of the largest lithium projects in Western Canada and the significant helium supply contract with an unnamed major NA Space launch company. Good opportunity to learn more as they’re hosting a CEO presentation and Q&A on September 29 to discuss the latest developments. Register to attend online by googling the event details: Royal Helium (RHC) - Thu, Sep 29 at 4:15 PM ET / 1:15 PM PT
RHC follows up with its recent lithium discovery that positions them as owners of one of the largest lithium projects in Western Canada. Just announced further discoveries of lithium in brine at Climax-2 sampling up to 81.3 Mg/L! Significant news that couldn’t be timed better amidst wild lithium prices… Based on the surveys, it’s believed that this discovery may be an extension to the original pool found at Climax-1 and more importantly may extend well beyond current 3D coverage - this area will be expanded and tested in upcoming programs.
Royal Helium reports results from its recently held annual general/special shareholders meeting. To sum, all matters presented for shareholders approval were overwhelmingly approved. The future looks bright for Royal as they continue a strong transition from helium explorer to a fully integrated helium explorer, producer and seller.
Royal Helium CEO Andrew Davidson discusses the recently struck deal between RHC and a major North American space launch firm. With initial deliveries commencing in 2023 accounting for ~40-50% of helium production numbers. Significant catalyst for a major re-rating event in store, moving forward with not only a plan, but a major contract. Video on YouTube titled: Royal Helium's Huge Helium Deal Powers Rockets Going To Space
Royal Helium strikes deal with major space launch firm - with initial deliveries commencing in 2023. This initial contract will account for ~40-50% of initial helium production numbers and the contract does not specify a maximum as the helium needs are extreme. Any guesses on who the major space launch firm is? My thoughts might be SpaceX as they have been recently awarded a $1.4B contract from NASA meaning major helium needs
Royal Helium announces a long-term supply agreement with a major North American space launch company. Major catalyst with the contract accounting for ~40-50% of initial helium production at the two production plants constructed by RHC (in Steveville followed by Climax) with no maximum specified. This agreement will commence in 2023.
Royal Helium recently announced sampling 84.9 mg/l lithium in brine underlying the Climax helium project in Saskatchewan. This news and RHC’s announced intentions to advance a lithium brine project alongside their ongoing helium development “combined with flow rates in the range of 1.85 MMCF per day equivalent, Climax is set to not only become a cash-generative helium play, but also now presents potential additional value to stakeholders with a lithium exploration and development project” says RHC CEO Andrew Davidson
Royal Helium now provides lithium value in a helium play - this follows the recent discovery of sample results at Climax including 84.9 mg/l lithium found in the underlying brine within the zone. RHC announced intentions to acquire lithium mineral rights per notice to the Province of Saskatchewan to advance a lithium brine project concurrent to continued helium development.
Royal Helium announces they’ve sampled up to 84.9 mg/L lithium in brine from their Climax Helium project in Saskatchewan. As a result of this discovery, RHC intends to advance a lithium brine project alongside Climax’s ongoing helium development as the only party who can be granted rights over the area and now holding potentially the largest lithium exploration project in Western Canada. This is a great news discovery driving more shareholder value given the growing demand and price of lithium.
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