Topaz Will Make a Significant Contribution to Global Helium Production
Elon Musk likes to be publicly photographed wearing his ‘Occupy Mars’ T-shirt. However, his short-term goal is more likely ‘Occupy Orbit’. With Starlink, the tech billionaire is in the process of installing a global network of satellites and occupying the leading role in future global communication infrastructure, preferably with X as the ‘World MAGAphone’. The global ‘Race to Space’ is in full swing, as evidenced not least by the rapid development of stocks in the space logistics sector, such as Rocket Lab (NASD: RKLB), ASTS SpaceMobile (NASD: ASTS) or Intuitive Machines (NASD: LUNR).
Since the beginning of the year alone (i.e., from January 1 to January 13, 2025), 5 rockets have already been launched into orbit worldwide, and the intervals between launches are becoming shorter. Musk has announced that he wants to launch 10 rockets into the sky per day by 2027. But just as AI requires much additional electricity and is even contributing to a renaissance of nuclear power, rocket launches need a raw material that is becoming increasingly scarce in the US: the noble gas helium.
There is no substitute for this inert gas when it comes to pushing rocket fuel from tanks into engines. It is estimated that helium worth $1 million is consumed per launch. This may seem little in itself, but it adds up. It can be said with certainty that rocket launches are the area where helium demand is growing fastest worldwide. The problem is that this additional demand competes with other technical applications where helium is also indispensable, such as MRI technology in medicine and the production of semiconductor chips or in science. The consensus among leading experts who met at the annual Helium Super-Summit in Houston, Texas at the end of last year was that the US will become a net importer of helium in the coming years, after being the largest exporter for decades. Whether to allow this foreseeable increasing dependence on Qatar or even Russia is ultimately a political question. But one can be sure that the US (and SpaceX) would welcome if a new significant helium source were found in their own country.
New Helium Discovery in Minnesota of All Places
Source: Pulsar Helium
As luck would have it, this very case may have just occurred – and in a place that no expert had on their radar. The new helium discovery was made in Minnesota of all places, where unlike Texas or Arizona, there is no oil or gas industry at all. On its Topaz project, the Canadian-British helium company Pulsar Helium (TSXV: PLSR; LON: PLSR; FRA: Y3K) had already announced a significant discovery with world-class helium contents of 14.5 percent about a year ago. Unfortunately, after overcoming the 500-meter thick cap rock, the first drill hole had only penetrated about 170 meters into the actual helium-bearing target rock, while geological measurement data suggested that the helium-bearing layers could extend more than five times deeper. Until now, this was only a conjecture, but now Pulsar has also proven this geological thesis.
Much to the chagrin of its shareholders, the company took almost a full year for the follow-up drilling to Jetstream #1 with the deepened borehole. But the first new results are all the more promising. The existing borehole was deepened from 670 meters (2,200 feet) to 1,550 meters (5,100 feet). It is now certain that further strong helium layers exist down to the bottom of the borehole. The entire helium zone now has a vertical extent of about 1,000 meters, instead of only 170 meters as before. In the coming weeks, Pulsar plans to determine the exact helium contents through precise measurements and measure the gas pressure in a long-lasting flow test.
Ongoing Financing Round for New Expansion Drilling
Encouraged by the new success, Pulsar has announced plans to drill a second borehole ‘Jetstream #2’ with the same target depth a few hundred meters from Jetstream #1. The company aims to secure the necessary financing for this in an ongoing equity round of $7.5 million with investors from the US. According to a recent press release, two million USD from this round have already been received, with subscribers committing to a one-year holding period.
CEO Thomas Abraham James is already drawing a confident conclusion: ‘The deepening of the Jetstream #1 well was a resounding success that exceeded our expectations and strengthened our confidence in the potential of the Topaz project. The expanded reservoir height and encouraging helium values are a testament to the quality of our geological model and the competence of our team. As we progress with Jetstream #2 and additional testing, we are increasingly optimistic that the project can make a significant contribution to the global helium supply chain. This success not only confirms our exploration strategy but also positions Pulsar Helium as a key player in meeting the critical demand for helium in various high-tech industries.’
The CEO has likely carefully considered his bold prediction that the ‘Topaz project will make a significant contribution to global helium production in the future.’ To understand why this confident stance might be justified, we want to address some basic facts about the underestimated topic of helium, which should help to better assess the significance of the discovery in Minnesota (and for Minnesota). To anticipate: Our thesis is that Minnesota could become the pivotal point for future helium supply to American industry through this discovery. This has reasons that can only be understood if one elaborates a bit further.
Let’s start with the sun: Every second, about 600 million tons of hydrogen fuse into 596 million tons of helium, and the mass difference of 4 million tons is released as energy, ensuring that ‘the sun shines.’
The conditions on Earth are diametrically different. On our metal planet, there are only tiny traces of helium (due to lack of fusion). However, helium is constantly being formed over very long geological time periods through the decay of heavy, radioactive elements, especially uranium and thorium. Science calls this process alpha decay, and the released alpha particles are nothing other than helium nuclei with two protons and two neutrons. From this fact, important general conclusions can be drawn for helium exploration: First, there must be a radioactive source where alpha decay occurs. Second, it is advantageous if the helium can concentrate over the longest possible periods and does not escape to the surface, for example, through tectonic events (earthquakes). Basically, one can say: The older and more undisturbed a helium deposit is, the better.
Even 0.04% Helium Content is Profitable
However, most helium is produced as a by-product of natural gas production and subsequently separated. For Qatar, even 0.04% helium content is enough to be one of the leading exporters of helium. This low concentration is sufficient because large amounts of natural gas are liquefied into LNG. However, the corresponding plants are very capital-intensive. In the USA, Texas and Arizona are currently (still) leading in helium production. The helium concentrations here are higher than in Qatar, but the deposits are much smaller. For almost 100 years, the USA had a strategic helium reserve in Texas. This reserve, actually just a former natural gas reservoir filled with 60% raw helium, has not existed for several years. Since then, the USA has been living in a kind of ‘helium ad hoc economy’ with correspondingly more volatile prices.
With this knowledge, the new helium find by Pulsar in Minnesota appears in a different light. The discovery not only comes at an opportune moment, but its significance lies primarily in the fact that it doesn’t fit the known pattern. It is a primary helium discovery without fossil natural gas. This is due to the completely different geology in Minnesota. The US state hosts some of the oldest rocks on Earth after Greenland and Australia. On the Topaz project, this old and impenetrable cap rock is, as mentioned, 500 meters thick. This cap has apparently prevented the gas formed underneath (more precisely, a mixture of helium and CO2) from escaping. At the same time, the geologically extremely long periods provide perfect conditions for the high helium concentrations that Pulsar has measured so far.
Now that high helium concentrations and high pressure have been confirmed vertically over a 1,000-meter section in Jetstream #1, this discovery categorically differs from natural gas-helium deposits, for example in Texas, where target zones formed through sedimentary processes related to the deposition of fossil plant remains. There, helium concentrations are significantly lower. The helium deposits in Minnesota have no sedimentary origin and could therefore be of a completely different caliber. Pulsar Helium now wants to drill a second borehole a few hundred meters away from Jetstream #1. At the latest when Jetstream #2 confirms the geological assumptions in a similar way to the first borehole, even skeptics should recognize the uniqueness of the helium discovery in Minnesota. Already now, when asked if Minnesota could become the Saudi Arabia for helium, the Pulsar CEO has a quick-witted answer ready: ‘Saudi Arabia wishes to be the Minnesota of Helium’.
We will continue to closely follow further news from Pulsar Helium on its Topaz project. Perhaps someday the space investment community will also recognize the significance of this topic.
