Countdown to pivotal drilling has begun
Canadian helium company Pulsar Helium Inc (TSXV:PLSR; FRA:Y3K) has succeeded in further expanding the area of mineral rights around its high-grade Topaz helium discovery in Minnesota, USA, by almost 75%. The company now holds mineral rights totaling approximately 24 square kilometers surrounding the historic Topaz helium well, which returned a helium concentration of 10.5%. According to the Company, the lease and license agreement was entered into with a private mineral rights holder. The lease covers privately owned mineral rights totaling 2,840 gross acres (1,049 net acres) spread over 75 parcels. The lease has an initial term of 20 years (renewable up to a maximum of 40 years, subject to terms) with a payment of U$11,000 upon signing and a production royalty of 3%.
The mineral rights are contiguous to Pulsar’s existing parcels and are considered high priority with significant potential for helium accumulations. To date, Pulsar has owned 3,132 acres (net) of mineral rights. Pulsar holds the exclusive right to non-hydrocarbon gases.
Seismic surveys on Topaz project completed
The countdown is on for the appraisal well Pulsar has planned for December 10 of this year. Pulsar has successfully completed seismic surveys in the form of ambient noise tomography (“ANT”) on 183 points. ANT is commonly referred to as passive seismic because the technology uses passive, naturally occurring seismic waves to record data on subsurface features. Analysis of the new data will be available in approximately 4 weeks. It is expected that the ANT survey will further reduce the risk to the proposed well and further improve Pulsar’s understanding of the extent of the resource.
The Jetstream #1 exploratory well on the Topaz helium project is scheduled to commence on December 10, 2023. The well is expected to be drilled to a vertical depth of 2,200 feet (671 meters), with the well location expected to be within 65 feet (20 meters) of the original LOD-6 discovery well, which contained 10.5% helium.
During drilling, a gas chromatograph and mass spectrometer will be on site to measure real-time gas composition measurements, including helium concentration. Permits from federal, state and local government agencies required for drilling operations have been obtained.
The required construction work for the access and drill site is expected to be completed by mid-November. The drilling site is located on private mineral rights for which Pulsar holds an exclusive non-hydrocarbon gas lease. In addition, the company has already agreed to terms for the acquisition of the surface rights.
Bottom line: timing on the stock market is a matter of luck. While experts continue to rate the U.S. helium supply as critical, the issue doesn’t seem to be booming in the market right now. Since its IPO in mid-August 2023, Pulsar Helium has therefore been strictly speaking ignored. In just under two months, shares with an estimated equivalent value of CAD 250,000 have been traded – something that is probably called “trading by appointment”. While the current price (CAD 0.22) is about 30% below the IPO price, this snapshot is of limited value with trading so thin. There is neither a flood of sellers nor enough buyers at the moment. Pulsar is thus in “good company” with other publicly traded helium stocks that have also suffered recently. The crash of Desert Mountain (TSXV:DME) immediately after a CAD 22 million financing (down 90 percent) was particularly bitter and may have left a bad taste in the mouths of helium investors. But investors should not be fooled by the current sentiment: It could be the calm before the storm, because Pulsar is unlike any other helium company on the market! Its historically measured helium grades are many times those of its competitors. In addition, Pulsar is the first mover in Minnesota, USA. Should Pulsar succeed in confirming the peer-reported size, helium content and pressure of its deposit, the company would become an industry superstar overnight. Just one well is expected to be enough to determine whether Pulsar will be able to supply a significant portion of the U.S.’s future helium needs. Pulsar promises to provide the answer to that question probably before the end of this year. If the answer is yes, the current stock market value of CAD 16 million would be history. The countdown has begun – there are only eight weeks until drilling begins.
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