The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019.

This announcement may contain certain statements about the future outlook for the Company.  Although the directors believe their expectations are based on reasonable assumptions, any statements about the future outlook may be influenced by factors that could cause actual outcomes and results to be materially different.

27 August 2024

Helium One Global Ltd

("Helium One" or "the Company")

Acquisition of near-term development and production  

helium and carbon dioxide project and fundraise of £6.43 million

Helium One Global (AIM: HE1), the primary helium explorer in Tanzania, announces that the Company has entered into a conditional binding heads of agreement (the "Agreement") pursuant to which Helium One has agreed to acquire a 50% legal and beneficial interest (the "Interest") in ASX listed Blue Star Helium's (ASX: BNL) ("Blue Star") Galactica-Pegasus project in Colorado, USA ("the Galactica Project"), 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 "Acquisition"). 

The Company also announces that it has raised gross proceeds of £6.43 million (approximately US$8.2 million) by a direct subscription (the "Subscription") pursuant to a cash box structure, through the issue of 590,000,000 new ordinary shares of no par value in the capital of the Company ("New Ordinary Shares") at a price of 1.09 pence per Ordinary Share (the "Issue Price") to fund the acquisition. The Subscription is conditional on admission of the New Ordinary Shares to trading on AIM becoming effective.  

Highlights:

·    Conditional acquisition of a 50% interest in Blue Star's Galactica-Pegasus project

·    The Galactica project contains confirmed discovery wells in the region flowing up to 6% helium (average of 3%) as free gas and are well positioned close to existing helium infrastructure

·    The Company's internal gross resource estimates, assuming a P50 Helium concentration of 3%, are 675 million cubic feet

·    Full development programme for the Galactica Project will require the drilling and tie-back of 15 wells, as well as commissioning of the relevant He and CO₂ processing facilities

·    Initial six development well programme planned for Q4 2024 which are expected to be on stream and producing in H1 2025

·    Acquisition is in line with Helium One's strategy to build a diversified helium company

·    Tanzania projects remain the primary focus of the Company with Extended Well Test ("EWT") currently ongoing at Itumbula West-1, a separate announcement providing an update on progress of the EWT has been released by the Company today (27 August 2024)

·    £6.43 million (approximately US$8.2 million) fundraise via a direct subscription with Cynosure Capital PTY Ltd, with Marex Financial acting as the placing agent

Lorna Blaisse, Chief Executive Officer, commented:

"We are very pleased to have entered into this partnership with Blue Star that allows us 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 knowledge to this new play as we advance towards producing assets."

The Acquisition

The Company has entered into the Agreement pursuant to which, the Company has agreed to acquire the Interest in Blue Star's Galactica Project and 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.  Confirmed discovery wells in the region have flowed up to 6% helium (average of 3%) as free gas and are close to existing helium infrastructure. Blue Star drilled the State-16 development well in June 2024 which flowed 1.9% He at 285 Mcfd in addition to 70% CO₂. The Company's internal gross resource estimates, assuming a P50 Helium concentration of 3%, are 675 million cubic feet.

The Acquisition is conditional on a number of conditions being satisfied or waived (if capable of waiver) on or before 31 October 2024, including but not limited to: (i) the parties agreeing and executing definitive agreements, in agreed form, in respect of the Acquisition which will take the form of a farm-in agreement and a joint operating agreement (provided that should the parties fail to enter into the definitive agreements on or before the longstop date and subject to the Company having waived the requirement, the Agreement will be deemed to be the definitive agreement in respect of the Acquisition; and (ii) approval by the Energy and Carbon Management Commission of Colorado of the oil and gas development plan submitted to the CECMC relating to the Galactica Project and known as Galactica-Pegasus OGDP I and having Docket No: 240400088.

Blue Star, through its local operating entity, will continue to act as operator on the project. The Company has also agreed a right of first refusal with Blue Star pursuant to which the Company will be entitled to acquire all other Blue Star helium acreage (other than Blue Star's Serenity prospect) on the same terms as those offered to Blue Star by a third party. Should the Company fail to exercise the right within a certain period, then the right will expire The Agreement also provides for a period of exclusivity from the date of the Agreement until the earlier of the longstop date or the date on which all of the conditions are satisfied which includes customary restrictions on Blue Star.

This development project targets the Permian-aged Lyon Sandstone reservoir fairway sealed by the overlying Blaine Formation anhydrite. Regional well test data indicates good to excellent reservoir properties, with helium primarily being sourced from the deeply weathered fractured, granitic basement. The He is trapped in structural closures developed during Late Palaeozoic rifting, and the CO₂ has been introduced into the system from later stage Tertiary volcanic intrusions.  

This is a strategic move which allows the Company to diversify its portfolio, both operationally and geographically, and follows an extensive review of several potential asset acquisition targets over the past 12 months, in North America and elsewhere. Whilst the Tanzania asset remains the primary focus, the Company believes that this represents a unique opportunity and required swift action by the Board following completion of all relevant due diligence.

The Company believes that this will be the first step in developing a diversified and wider operating asset base, one that will lead to greater growth opportunities and provide an accelerated income stream and near-term attributable reserves that will benefit shareholders and stakeholders.

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 He and CO₂ processing equipment. The initial programme, which has been funded by the capital raise, will require the drilling of six development wells which are planned for Q4 2024. Once these are complete, it is forecast that the sale of He and CO₂ from these initial wells, will generate sufficient cash to fund the drilling and tie-back 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%.  

The Subscription

The Subscription was made with a single institutional investor, Cynosure Capital PTY Ltd, with Marex Financial acting as the placing agent, and will enable the Company to meet the financial obligations under the Agreement which will result in the Company acquiring the Interest. Subject to the conditions in the Agreement having been satisfied or waived (if capable of waiver), the net proceeds of the Subscription will be applied in respect of the Acquisition as follows:

·    US$1.5 million in respect of past costs incurred by Blue Star on the Galactica Project;

·    100% of the costs in respect of six wells capped at US$450,000 per well;

·   up to US$2.55 million in in respect of the Company's 50% participating interest share of the tie-back, installation andprocessing expenditures required for the development of the Galactica Project;

·  the balance of US$1.18 million in respect of associated fees, legal costs and working capital and development contingencies.

The New Ordinary Shares represent 9.99% of the Company's enlarged share capital after the issue of the New Ordinary Shares. The Issue Price represents a discount of approximately 37 per cent. to the closing price of 1.74 pence per Ordinary Share on 23 August 2024, being the last business day prior to the announcement of the fundraise.

Admission and Total Voting Rights

Application has been made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will become effective and that dealings in the New Ordinary Shares will commence at 8.00 a.m. on 30 August 2024. The New Ordinary Shares will be issued as fully paid and will rank pari passu in all respects with the Company's existing Ordinary Shares.

Upon Admission, the Company's issued ordinary share capital will consist of 5,905,710,763 Ordinary Shares with one voting right each. The Company does not hold any Ordinary Shares in treasury. Therefore, the total number of Ordinary Shares and voting rights in the Company following Admission will be 5,905,710,763. With effect from Admission, this figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company.

For further information please visit the Company's website: www.helium-one.com   

Contact

Notes to Editors

Helium One Global, the AIM-listed Tanzanian explorer, holds prospecting licences across three distinct project areas, with the potential to become a strategic player in resolving a supply-constrained helium market.

The Rukwa, Balangida, and Eyasi projects are located within rift basins on the margin of the Tanzanian Craton in the north and southwest of the country. The assets lie near surface seeps with helium concentrations ranging up to 10.6% helium by volume. All Helium One's licences are held on a 100% equity basis.

The Company's flagship southern Rukwa Project is located within the Rukwa Rift Basin covering 1,900km² in south-west Tanzania.  This project is considered to be entering an appraisal stage following the success of the 2023/24 drilling campaign, which has proved an established helium system where the Itumbula West-1 exploration well successfully flowed 4.7% helium to surface in Q1 2024. Additional follow-on leads and prospects are defined by subsurface database including multispectral satellite spectroscopy, airborne gravity gradiometry, 2D seismic data, and QEMSCAN analysis.

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.