Helium Evolution Enters Proposed Farmout Deal With North American Helium

Helium Evolution (TSXV: HEVI) has apparently struck a deal with one of the leading operators within the North American helium space. The company will see an investment from North American Helium, while also working towards conducting a proposed farmout agreement with the company.

As one of the largest firms within the helium space on the continent, North American Helium is one of the most active drillers for the resource in the country, and reportedly has drilled the most wells in North America in search of helium. The company is involved in the exploration, development, production and refining of the gas.

The proposed farmout arrangement with the firm will see North American Helium drill a total of five wells on three blocks of land, which consist of 2.3 million acres in Saskatchewan. Helium Evolution is set to take a 20% working interest in each of these wells drilled on these lands. The wells are expected to be drilled over a period of 24 months, with targets to be identified within the first six months of the arrangement.

Lands to be included in the farmout arrangement reportedly exclude the McCord area, where Helium Evolution is set to begin drilling this month.

Separately, Helium Evolution is set to conduct a best efforts financing for gross proceeds of $8.5 million. Units are believed to be priced at $0.40 each, and contain one common share and one third of a common share purchase warrant, with warrants having an exercise price of $0.70 per share. Warrants also contain an acceleration clause, whereby if the equity trades about $1.20 on a 30 day volume weighted average price basis the firm can accelerate the expiry date of the warrants.

The financing will see North American Helium subscribe for 8.75 million, resulting in a $3.5 million investment. Insiders are to also participate to the tune of $0.5 million, leaving $4.5 million to be sourced via a brokered best efforts financing.

“This Farmout Agreement with North American Helium truly sets us apart, as we are able to work with one of the helium industry’s leading operators, and to welcome them as a strategic equity investor. Having this Farmout Agreement validates our original strategy to acquire sizeable acreage in Saskatchewan in regions featuring a high probability of helium reserves, while the Offering allows HEVI to successfully fund the farmout arrangement with North American Helium and provides substantial financial flexibility to continue executing our overall strategy,” commented CEO Greg Robb.

The financing is currently set to close June 28.

Helium Evolution last traded at $0.47 on the TSX Venture.


Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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