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Helium One Global’s operational update and share option award

08:21, 1st July 2024
Vox Markets
Vox Newswire

Aim-listed Helium One Global (HE1) Follow | HE1, the primary helium explorer in Tanzania, has provided an encouraging operational update concerning its Rukwa project. The focus remains on the imminent extended well test (EWT) at the Itumbula West-1 (ITW-1) site. This development is poised to mark a significant milestone for the company as it endeavours to ascertain commercial viability within the helium-rich Rukwa region.

The company’s update highlights substantial progress in preparations for the EWT, set to commence in July. The ITW-1 well, which had previously shown promising helium flow rates, will be deepened to explore additional fault-fracture plays. The readiness of the company-owned rig and the mobilisation of third-party services, including those from renowned firms such as SLB (formerly Schlumberger) and GeoLog International BV, underscore Helium One’s commitment to meticulous operational execution. The acquisition of essential well control equipment and long lead items, alongside the appointment of an experienced drilling crew, reinforces the company’s logistical and technical preparedness. This phase of testing aims to deliver critical data on reservoir performance, flow rates, and helium concentrations, all crucial for formulating a comprehensive feasibility study. These insights will underpin Helium One’s forthcoming application for a Mining Licence, signalling a transition from exploration to potential commercial production.

Helium One’s commitment to rigorous environmental and safety standards is evidenced by the ongoing Environmental and Social Impact Assessment (ESIA) study, conducted by MTL Consulting Ltd. This six-month study, essential for the Mining Licence application, aligns with Tanzanian regulatory requirements and reflects the company’s dedication to sustainable development practices.

The company has also announced the award of 259,000,000 share options to directors and management, recognising their substantial contributions to the project’s advancement. These options, priced at 1p per share, will vest over a two-year period, providing a structured incentive for continued performance.

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Helium One’s latest update paints a picture of a company on the cusp of a potentially transformative phase. The detailed operational readiness and strategic partnerships with industry leaders will no doubt bolster investor confidence. The promising helium flow rates from the initial ITW-1 tests lend credence to the project’s commercial prospects, albeit with the caveat that the forthcoming EWT results will be pivotal in determining true viability.

The market’s focus will undoubtedly be on the results of the extended well test. Should the data affirm commercial helium concentrations and sustainable flow rates, Helium One could well position itself as a key player in the global helium market, which is characterised by growing demand and constrained supply. Investors should temper optimism with a degree of caution, given the inherent risks associated with exploration and the transition to production. The share option awards, while indicative of management’s confidence, also serve to align their interests with those of shareholders, ensuring a committed leadership team navigating this critical juncture.

This update is a promising narrative of potential and preparedness. The forthcoming months will be crucial, as the company seeks to validate its exploration success and transition towards commercial production.

Stock Chart | HE1

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