Royal Helium Ltd. is a publicly traded company on the TSX Venture exchange (symbol RHC.v), that is focused on the exploration and development of primary helium in southern Saskatchewan.
Royal Helium is currently one of the largest helium leaseholders in Canada with land that was methodically evaluated for helium potential for over two years and has been vetted by helium experts, professional geologists and engineers.
| Close Price | 0.50 |
| 52 wk Range Low | 0.28 |
| 52 wk Range High | 0.92 |
| MCAP (m) | $66.14 |
| EV (m) | $52.27 |
| Index: Public | TSXV |
| Financial YE | 31-Dec |
| Currency | CAD |
Business Activity
Mining E&P
Key metrics
| Gross debt (m) | $0.10 |
| Cash (m) | $13.87 |
| Net Debt (Cash) (m) | -$13.77 |
| Net Operating Cash (m) | -$2.13 |
| Revenue (m) | N/A |
| Net Income (loss) (m) | -$4.94 |
Key ratios
| (Net Cash) /Shareholder Equity % | -20.82% |
Mining Sector Research
TSXV Market Index
Analyst Team
+44 20 7419 7928
mining@acfequityresearch.com
Royal Helium Ltd (TSXV:RHC, OTCQB:RHCCF) is a Canada-based helium exploration company with ~1m acres of helium-rich land under lease or permit in the Saskatchewan region. Helium (He) is used in healthcare, technology, transportation, fibre optics and semiconductors because of its high thermal conductivity and non-reactive properties.
Saskatchewan is a known helium producing region, with multiple wells in production and it is a strategic location for continued exploration and development. Saskatchewan has a unique geology and gas trapping structure – helium is produced closer to its source (the Precambrian basis) providing RHC with competitive advantage. Increased demand / tightened supply of He is also a value driver.
➢ Investor competition for He projects may drive down RHC WACC
➢ Climax-4 drilling program delivers high helium shows
➢ On track for Climax production – additional 2 licenses under review
➢ Cash & CE 3Q21A C$13.9m – financing secured for drilling
RHC (lighter line) TSXV market vs price relative
RHC is a Canadian (Saskatchewan) helium (He) explorer in a vetted region – demand drivers healthcare, technology and transportation, investor search and competition for renewable / sustainable projects (serving to lower the RHC’s WACC over time). The government of Saskatchewan in Nov 2021 Helium Action Plan (HAP) stated it aims to supply 10% of global demand by 2030. The HAP will grow the entire He value chain including export infrastructure.
Presence in the vetted Saskatchewan region – Royal Helium is one of the largest helium lease and permit holders in Canada.
Helium industry fundamentals robust – The current industry dynamic remains favorable for new entrants.
Russian supply is now unlikely to materialize for the foreseeable future because of the isolation effects of the Russia / Ukraine war.
Production by RHC is on the horizon – Royal Helium is close to getting well production up and running with the Climax-4 well completions program underway (total drilled depth of 2,701 meters).
Financing secured for Climax project – The bought-deal equity financing (34.5m units issued) in Jun 2021 generated ~C$17.3m gross proceeds.
➢ Production start at Climax
➢ Strongly underpinned helium prices
➢Diminishing helium resources
➢ Demand for fiber optics and electronics
➢ Demand for heliox mixtures in healthcare (asthma treatment)
➢Demand from space exploration
Operational Strategy
Royal Helium’s strategy primarily revolves around advancing its exploration and drilling program in its current Saskatchewan locations. RHS has two objectives: 1) advancing its Climax helium project to begin production and 2) growing its helium resources through continued drilling and exploring.
Operational delivery on the current priorities:
Climax – Advancing the project – The company has drilled the Climax-4 well to a total depth of 2,701 meters and the production plan is underway.
Omega – is the first helium-specific drilling program in the southeastern Saskatchewan region. Test results indicate some of the highest helium shows in the province.
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Zak Mir has 30 years financial markets experience and understands credible influencing across digital channels in order to drive stock liquidity. He is an accomplished author.
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