Helium One Global, the primary helium explorer in Tanzania, is pleased to announce the Company's audited results for the year ended 30 June 2024.
Summary
· Acquired Epiroc Predator 220 drilling rig and successfully mobilised rig to the Rukwa site to complete Phase II drilling campaign
· Commenced second drilling campaign in Q3 2023
· Completed drilling of Tai-3 well to a total depth ("TD") of 1,448m measured depth ("MD") which provided a valuable dataset enabling a greater understanding of the region and the follow-on Itumbula prospect
· Successfully drilled and completed all wireline logging and drill stem ("DST") testing operations at Itumbula West-1 ("ITW-1") flowing a high concentration of helium and hydrogen to surface
· Total comprehensive loss for the year attributable to the equity holders of the Company of US$11,012,204 (2023: US$2,672,915), mainly as a result of current year impairments of US$5.77 million and exchange differences of US$2.3million
· Net assets as at 30 June 2024 were US$47,471,097 (2023: US$27,204,804)
· At 30 June 2024, the Group's cash position was US$11,647,723 (2023: US$9,600,786)
Post Balance sheet events
· Successfully completed Extended Well Test ("EWT") at ITW-1 flowing a sustained average of 5.5% helium (air corrected) from the fractured Basement and a sustained average of 5.2% helium (air corrected) to surface from the faulted Karoo Group
· Data collated and evaluated by the Company's subsurface team, was integrated into a feasibility study, which was submitted with the Mining Licence ("ML") application, and demonstrates to the Mining Commission of Tanzania the viability of the southern Rukwa Helium Project
· Acquisition of near-term development and production helium and carbon dioxide project by farming into a 50% interest in Blue Star Helium's Galactica-Pegasus project in Colorado, USA
· Company-owned drilling rig, Epiroc 220, remains hot stacked in the southern Rukwa region and remains operationally ready
James Smith, Chairman of Helium One, commented
"This has been a very exciting and significant period for the Company which saw us deliver our Phase II drilling campaign, culminating in the Itumbula discovery and, having submitted the Mining Licence application, we keenly await the response from the Ministry in Tanzania.
We now have a portfolio of two development opportunities in two jurisdictions which the Board expect to progress in the coming year, with a view to delivering considerable news, upside, and revenues to the Company.
We would like to thank all our shareholders as well as all our stakeholders in Tanzania for their continued support and look forward to the year ahead and providing further updates on both of our exciting projects."
Lorna Blaisse, CEO, commented
"This has been a transformational year for the Company. We have carried out our second drilling campaign and made our first discovery in Tanzania, whilst also greatly increasing our knowledge and understanding of the region. In addition to this we acquired our own rig which has provided us with considerable optionality and a potential revenue stream in the future.
Our main focus in the year ahead, once we have received the Mining Licence for which we have applied, will be on advancing the southern Rukwa Helium Project towards development. While our recent acquisition in the US is also expected to progress significantly following the commencement of the drilling programme this quarter with wells and production coming on stream in H1 2025.
We believe that the year ahead promises to be another busy and highly significant time for the Company as we look to further develop and build our portfolio."
Notes to Editors
Helium One Global, the AIM-listed Tanzanian explorer, holds prospecting licences across two distinct project areas, with the potential to become a strategic player in resolving a supply-constrained helium market.
The Rukwa and Eyasi projects are located within rift basins on the margin of the Tanzanian Craton in the north and southwest of the country. These assets lie near surface seeps with helium concentrations ranging up to 10.4% helium by volume. All Helium One's licences are held on a 100% equity basis.
The Company's total acreage in Tanzania is 1,372 km2 and its flagship southern Rukwa Project is located within the southern Rukwa Rift Basin in south-west Tanzania. This project is considered to be entering an appraisal stage following the success of the 2023/24 exploration drilling campaign, which proved a helium discovery at Itumbula West-1 and, following an extended well test, successfully flowed 5.5% helium continually to surface in Q3 2024.
Following the success of the extended well test, the Company has now flowed significant quantities of helium to surface and has filed a Mining Licence application with the Mining Commission of the Tanzanian Government.
The Company also owns a 50% working interest in the Galactica-Pegasus helium development project in Las Animas County, Colorado, USA. This project is operated by Blue Star Helium Ltd (ASX: BNL).
Helium One is listed on the AIM market of the London Stock Exchange with the ticker of HE1 and on the OTCQB in the United States with the ticker HLOGF.
Chairman's Statement
I am pleased to present the Annual Report and Financial Statements for the year ended 30 June 2024. The period was an exceptionally busy one for the Company with a two well exploration programme on our Rukwa project which ultimately resulted in the announcement of a confirmed helium discovery.
Following the acquisition of our own drill rig in July 2023, the Company embarked on a two well drilling campaign on the Rukwa project in Tanzania. The team successfully drilled the Tai-3 well in November 2023, encountering elevated helium shows throughout and recovering the first downhole helium samples of helium gas in solution in Tanzania from four different intervals across the Upper and Lower Karoo Group.
The team then moved on to drill the ITW-1 well in January 2024, successfully completing all wireline logging and drill stem testing operations in early February. The results from ITW-1 were very pleasing, flowing a high concentration of helium to surface from Basement, at a measured concentration up to 4.7% helium. A measured helium concentration of 4.7% equates to almost nine thousand times above background levels. Hydrogen also flowed to surface during testing of the Basement, at a concentration of 2.2% hydrogen, over thirty-seven thousand times above background levels
The EWT at ITW-1, which were completed post period end, confirmed a helium discovery having successfully flowing a sustained average of 5.5% helium (air corrected) from the fractured Basement and a sustained average of 5.2% helium (air corrected) to surface from the faulted Karoo Group.
After extensive analysis of all of the data from the operations during the year the team submitted an application for a ML on the southern Rukwa Helium Project in September 2024 and the Company will continue to engage with the Ministry of Minerals and the Mining Commission in Tanzania whist awaiting the award of the ML in order to progress the southern Rukwa Helium Project development further.
As Chairman of Helium One, I am very proud of what we have achieved in Tanzania with a relatively small team of professionals and limited financial resources. It is a testament to the hard work and resilience of Lorna and her team that we have achieved so much and progressed this project to its current status with no end of challenges along the way, so I would like to express my heartfelt thanks to her and the team for everything that they have done.
There have been some changes to the Board during the period and post period end. During the year Ian Stalker and Robin Birchall decided to step down as Directors of the Company. I would like to again thank them both for their invaluable contribution at Helium One.
We were delighted to welcome Graham Jacobs who joined the Board as commercial and Finance Director on 19 September 2023. Graham has been working with the team since January 2022 and was appointed Financial and Commercial Director on 4 August 2023. Graham is an experienced financial and commercial executive with over 30 years of experience in the natural resources sector. He has extensive expertise in the oil and gas industry having held a number of senior positions at Dragon Oil plc, PanOcean Energy, Addax Energy and Oryx Petroleum, and was also Head of Commercial at Tanzanian focussed Orca Energy.
Post period end, Russel Swarts resigned as a Director of the Company to focus on his other interests. Russel has been a key member of the team since prior to the Company's listing on AIM in 2020 and I wish to thank him for his significant contribution both as a Board member and as part of the senior management team and wish him well in his future endeavours.
We very much look forward to progressing the project in Tanzania through to production, whilst also looking to progress the further opportunities we have, both in-country and elsewhere.
We are also entering a very busy period with our joint venture with Blue Star in Colorado where we will shortly commence the drilling of six development wells on the Galactica-Pegasus project. We look forward to providing updates on the progress of the drilling programme in due course.
I would like to thank the Government of Tanzania and the local communities in which we operate for their continued support which has enabled the Company to advance its operations at such a dramatic pace. We look forward to continuing our work with them in what we expect to be an exciting year ahead. Finally, I would like to thank all of our shareholders for their continued commitment and support and look forward to providing further updates from our various projects.
Chief Executive Officers Statement
I am pleased to report on the Group's annual results for the 12 months to 30 June 2024. The period was another incredibly busy and rewarding period for the team as we progressed our Phase II drilling at Rukwa and successfully flowed a high concentration of helium to surface from Basement, at a measured concentration up to 4.7% helium from our exploration well ITW-1.
Flowing helium to surface in such high concentrations was a huge, and very significant, milestone for the Company and, after evaluation of these results, we progressed to an EWT at ITW-1. This confirmed a helium discovery in September 2024 following a sustained helium flow to surface of 5.5% helium (air corrected) from the fractured Basement and a sustained flow of 5.2% helium (air corrected) to surface from the faulted Karoo Group.
This was followed by a comprehensive integration of the results and the completion of our feasibility study for the southern Rukwa Helium Project which was submitted as part of the application for a ML in order to develop and advance the project upon award.
Operational Review
Following the extensive evaluation of rig options during the first half of 2023 and, in order to remain on the critical path to a Q3 2023 spud, the Company successfully completed the acquisition of its Epiroc Predator 220 drilling rig in July 2023 and its subsequent mobilisation down to the Rukwa site. This is an oil and gas type rig capable of drilling to depths of 2,400m. It is broken down into three main components; the rig carrier, substructure and pipe skate. This acquisition was a highly significant achievement for the Company as ownership of the rig provided the opportunity for us to move quickly into the testing phase at ITW-1 without the additional cost of keeping a rig on standby or becoming challenged by mobilising another rig into the country.
In November 2023 the Company announced that the Tai 3 well had successfully reached a total depth of 1,448m MD having encountered weathered crystalline Basement. We were very encouraged by these initial results from Tai 3 and it was extremely positive to see elevated helium shows, up to six times above background, in the Lower Karoo Group and Basement targets as well as the fact that helium shows increased in frequency and quality with depth, as we had anticipated.
The Company completed drilling and wireline operations at the Tai-3 well, which included logging, downhole pressure tests and sampling, despite a number of unexpected operational challenges. The Company was able to successfully run logging tools down to 1,430m MD and acquired downhole fluid samples from four different zones in the Lower and Upper Karoo Group. Petrophysical analysis of the downhole logs demonstrated little to no zones of interest for sampling in the Lake Beds or Nsungwe Formation.
The wireline logs demonstrated a series of good quality, stacked reservoir intervals in both the Upper and Lower Karoo Group intervals. In particular, in the deeper Lower Karoo Group section which had not previously been drilled in the Rukwa Rift Basin with initial petrophysical analysis demonstrating a series of well-developed good quality reservoir sands. These sands range from 2-20m thick, an average 17% porosity and 0.44 net to gross, interbedded with shale prone seals. These reservoir-seal pairs, combined with their proximity to the Basement helium source, made this interval a very interesting primary target zone.
The Upper Karoo Group section also demonstrated an increased shale content, and more thinly bedded reservoir intervals. The overlying, younger Lake Beds Formation was dominated by sandstones and shales, with minor amounts of limestone. Initial petrophysical analysis of wireline logs over the Lake Beds Formation demonstrated good to excellent quality reservoir sands (average 24% porosity and 0.61 net to gross) interbedded with thin claystones and limestones.
The downhole sampling programme successfully recovered helium samples from four different intervals in the Lower and Upper Karoo Group. Although, no free gas samples were obtained, there was evidence of helium gas in solution when the samples were transferred at surface, and pressure-volume-temperature analyses were performed. These samples yielded helium up to 8,320 parts per million helium, with the highest values encountered close to a small, faulted zone in the Lower Karoo Group. It is noted that helium shows increased whilst drilling into the Basement fracture zone until losses were encountered and drilling operations were halted.
The presence of these helium-enriched fluids migrating through the basin along fractures and fault zones is likely to allow the helium to migrate from the deeper Basement source rock. As a result of this increased understanding of the regional characteristic, the Company made the decision to run 7" casing and suspend the Tai-3 well, so the Company can return and deepen the well at a later date.
Armed with the results from the Tai-1 and Tai-3 wells, the Company then moved on to the Itumbula prospect with drilling commencing on 6 January 2024. The Company successfully completed all wireline logging and drill stem testing ("DST") operations at ITW-1 in early February flowing a high concentration of helium to surface from Basement, at a measured concentration up to 4.7% helium which equates to almost nine thousand times above background levels. Hydrogen also flowed to surface during basement testing, at a concentration of 2.2% hydrogen, which is over thirty-seven thousand times above background levels
We were delighted with the findings from ITW-1 and the results from the DST clearly confirmed the presence of a producing helium province in the Rukwa Rift Basin. The learnings from the Tai-3 well provided invaluable additional subsurface information as to how the helium system works. By applying these findings, we adjusted our well location on the Itumbula prospect pre-drill, which certainly yielded the results we were hoping for and justified that decision.
We then moved to the EWT at ITW-1 which commenced in July 2024, post period end. The EWT was completed in early September 2024 and we were very pleased to confirm a helium discovery with the ITW-1 well successfully flowing a sustained average of 5.5% helium (air corrected) from the fractured Basement and a sustained average of 5.2% helium (air corrected) to surface from the faulted Karoo Group.
Economic and subsurface modelling by the Company demonstrates positive economics with artificial lift, and what is anticipated to be in the region of twenty to thirty development wells in the production phase. The data collated and evaluated by the Company's subsurface team, was integrated into a feasibility study, which was submitted with the ML application, and demonstrates to the Mining Commission of Tanzania the viability of the southern Rukwa Helium Project.
Acquisition of Near-Term Development and Production Helium and Carbon Dioxide Project
Post period end, we announced on 31 October 2024 that the Company executed definitive agreements to acquire a 50% legal and beneficial interest in Blue Star's Galactica-Pegasus project in Colorado, USA as well as a similar interest in the leases associated with 246 km2 (61,000 gross acres) of acreage in the proven helium fairway of Las Animas County, southern Colorado.
The full development programme for the Galactica Project will require the drilling and tie-back of 15 wells, as well as commissioning of the relevant helium and CO2 processing equipment. The initial programme will require the drilling of six development wells and is commencing in Q4 2024. Once these are complete, it is forecast that the sale of helium and CO2 from these initial wells, will generate sufficient cash to fund the drilling and tie-back of the remaining nine wells as the project is close to existing helium processing facilities, associated infrastructure and downstream users.
The initial wells are expected to be on stream and producing in H1 2025 and an independent third-party competent person's report indicates that an average of approximately US$2 million per annum will accrue to the Company over a period of five years. However, these estimates represent only sales from the production of helium, and the Company believes that the sale of associated CO2 into the local market, could increase this by up to 50%.
We are very pleased to have entered into this partnership with Blue Star enabling the Company to build an expanding global footprint in the helium sector at such a pivotal time. Our projects in Tanzania remain our primary focus, but this development opportunity enables the Company to potentially secure near-term cash flow to aid with progressing our Tanzanian asset. We now have a portfolio of two potential near term revenue projects in our portfolio.
We very much look forward to working with Blue Star in this new partnership and aim to draw on our learnings from another proven helium play in order to extend our expertise to this new play as we advance towards production.
Licence Area Evaluation
A number of Prospecting Licences ("PL's") held by the Company reached the end of their second and final renewal term and automatically lapsed on 17th September 2024, except for those in southern Rukwa which are now under application for a ML. By allowing these to lapse at the end of the final exploration term, the Company will save US$177,600 per year in annual license fees.
The Company has fully relinquished its expired PL's on the eastern side of Lake Rukwa totalling 233 km2, where the area is deemed of limited prospectivity as well as being too difficult to access and or offshore on the lake. In addition, following a partial relinquishment of 125 km2 earlier this year, after a comprehensive gravity-magnetics study, the Balangida Rift Basin PL totalling 134 km2 has now also expired.
The remaining PLs which reached their final exploration renewal term on 17th September 2024 are two PLs in the eastern Eyasi Rift Basin. These PLs are located in an area deemed to offer little to no prospectivity and total a combined area of 807 km2.
Whilst these PLs have reached the end of their exploration period, the Company continues to review all geological regions of Tanzania for helium potential and remains opportunistic for future PL applications.
Fundraising
In September 2023, the Company raised gross proceeds of £6.8 million before expenses (approximately US$8.7 million) through the issue of 113,333,333 new ordinary shares at a price of 6 pence per share. The funds raised were for the Company's drilling, licensing fees and additional working capital.
In December 2023, the Company raised gross proceeds of £6.1 million (approximately US$7.7 million) through the issue of 2,420,842,500 new ordinary shares at a price of 0.25 pence per share. These funds were essential to enable us to complete the drilling of ITW-1 well.
In February 2024, the Company raised gross proceeds of £4.7 million (approximately US$5.92 million) through the issue of 313,333,333 new ordinary shares at a price of 1.5p per share. This raise provided the Company with sufficient working capital to progress its planning for the next stage of the work programme in Tanzania.
In June 2024, the Company raised gross proceeds of £8.0 million (approximately US$10.2 million) through the issue of 1,600,000,000 new ordinary shares at a price of 0.50 pence per ordinary share. These funds were to enable us to fulfil the deepening of ITW-1 and the execution of the EWT.
In August 2024, post period end, the Company raised gross proceeds of £6.43 million (approximately US$8.2 million) through the issue of 590,000,000 new ordinary shares at a price of 1.09 pence per share (the "Issue Price") to fund the acquisition of the 50% interest in the Galactica Pegasus project.
Financial Results for the Year Ended 30 June 2024
The Group recorded a total comprehensive loss attributable to the equity holders of the Company of US$11,012,204, an increase compared with US$2,672,915 for the year to 30 June 2023 mainly as a result of current year impairments of US$5.77 million and exchange differences of US$2.3million.
The Group's net assets as at 30 June 2024 were US$47,471,097 compared to US$27,204,804 at 30 June 2023. The increase is due to the drilling activities that occurred during the year. At 30 June 2024, the Group's cash position was US$11,647,723 (30 June 2023: US$9,600,786).
Outlook
Helium remains an irreplaceable technology commodity in a very dynamic market, sensitive to demand supply and geopolitics and the Board believes that Helium One has a portfolio that has the potential to help meet the increasing demand for helium. The year ahead promises to be another busy and very significant period for the Company as we aim to secure our ML across the southern Rukwa Helium Project in Tanzania and work towards production, and thus revenue for the Company, in the USA.
Following the submission of the ML application, the Company will continue to engage with the Minister of Minerals and the Mining Commission in Tanzania whilst awaiting the award of the ML before progressing the southern Rukwa Helium Project development further.
The Company-owned drilling rig, Epiroc 220, remains hot stacked in the southern Rukwa region and is operationally ready.
The Company continues to review the remaining PLs it holds in Tanzania, particularly off the back of the learnings from the success in southern Rukwa.
Our partnership with Blue Star is a milestone for the Company. We now own a 50% stake in the Galactica-Pegasus project in Colorado, USA and are moving ahead to the commencement of the 2024 drilling campaign on the Galactica-Pegasus development, with the initial wells expected to be on stream and producing in H1 2025.
I would like to take this opportunity to thank all our staff who have again worked so hard this year as well as the local communities and the Government ministries that have continued to work with us and have enabled us to continue to drive our programme forward. Lastly, I would also like to thank all of our shareholders for their continued support and look forward to providing further updates as we progress our projects further.
