Issue link: http://resourceworld.uberflip.com/i/1012424
A U G U S T / S E P T E M B E R 2 0 1 8 www.resourceworld.com 65 OIL & GAS "No one wants to check into the Hotel California, where you can check out but you can never leave," he said. "The money wants to know the exit plan. We want to get big enough that the big guys take you over. Right now there are six big compa- nies that have a lock on global helium, but when we start producing liquid helium they'll [offer to] buy us out." Loeber said he anticipates starting the process in September with the public share offering beginning in January 2019. Allowing for nine months for Crown land acquisition, seismic and more testing, then five months for development drilling and 18 months for facilities work, first produc- tion is expected in about 36 months. The goal is to raise $1 million and use that capital to obtain the land and a better val- uation for the company. Obviously, access to capital is key, with the Capex targeted at approximately $25 million but the payout is projected at just a year if the helium price stays around $200/ MCF, or 1.5 years if it goes as low as $100/ MCF. That's aided by a low cap rate and low-risk approach, plus hundreds of wells available for potential acquisition with production testing at about $250,000 each. "Access to capital is an educational process," he said, "because right now people don't know about this. There are a lot of smart people out there – American Helium [AHE-TSXV], Royal Helium, Desert Mountain Energy [DME-TSXV] and North American Helium – so we're not alone but we've built a compelling company." And that picture may improve when the US, which has supplied 30% of the world's helium supply from its National Helium Reserve at the Cliffside Storage Facility near Amarillo, Texas, which in its heyday contained a billion cubic metres, shuts down the operation next August. That's almost certain to drive prices up, said Loeber, "but our business plan doesn't need rising prices." "The economy of it is compelling and we're good at what we do," he said. As for markets for the product, Loeber said there are unquestionably markets but no spot prices for helium. Everything is done by end user contracts or offtakes, but the prospects look good. "We're very excited by this oppor- tunity and we think people should pay attention," he said. "This could be the new lithium." "This is a chance to invest in a sector that's in its infancy and we think people should take a look at it." n Vance Loeber, President and CEO of First Helium, stands by a gas compressor facility in Alberta adjacent to one of the company's helium wells. Photo courtesy First Helium. Helium is a chemical element with the symbol He and atomic number 2. It is a colourless, odorless, tasteless, non-toxic, inert, monatomic gas, the first in the noble gas group in the periodic table. After hydrogen, helium is the second lightest element.