Desert Mountain Energy Inks Agreements With Helium End-users; Acquires More Acreage

Desert Mountain Energy has completed the required filings to sell processed helium to the US Government and has signed non-disclosure agreements with other end-users.

The helium exploration company on Wednesday (Jan 5) confirmed the news as it announced the acquisition of an additional 40 acres of land for the drilling of development wells.
Robert Rohlfing, CEO of Desert Mountain Energy, said, “The company’s plan has always been to become a vertically integrated helium producer selling directly to end-users.”
“Due to our location, we have the luxury of having 36 end-users within 300 miles of our finishing facility.” “We expect to be adding further end-user contracts and we look forward to building upon those relationships.”
Along with the above deals, Desert Mountain Energy has also entered into an agreement with Drake Well Services, whereby in exchange for pre-payment for drilling services, the company is provided priority use of a top dive rig with a 16,000’ depth capability.

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DME says it has found “significant” helium percentages in Arizona

Desert Mountain Energy (DME) on Wednesday said it has found “significant” helium percentages in two new wells in Arizona, US.

Completing independent gas analysis on both of its exploratory wells, the State 10-1 and State 16-1, DME said the 10-1 well showed helium 7.1321% and the 16-1 well showed helium 4.0904%. In a statement, DME said, “Based on normal accepted industry operation procedures, the company at this time and prior to further engineering and flow testing, would entertain a possible daily flow rate of between 4,100 and 5,600 MCFGPD based on aggregated production from both wells.” “The company has compared these wells to the closest established and documented helium production located approximately 35 miles NE in the Pinta Dome Field.” DME said it is not seeking to publish reserve estimates at this time, in part due to the fact that both wells have been completed in zones where there is currently no nearby production in Arizona from which to conduct accurate long-term reserve analysis. “However, the company will be having an independent review and submit their findings and should the qualified person be unable to report without reservation on reserves data, he shall set out the cause of the reservation and the effect, if known to the qualified reserves evaluator on the reserve data or prospective contingent resources data,” a DME statement continued.

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Could A Helium Shortage Derail The Tech Boom?

Discovered over a century ago, helium was never intended for balloons. It wasn’t supposed to be a party gas. At the height of the Cold War, the United States recognized its strategic nature and started stockpiling it and controlling supply and pricing at a Federal Helium Reserve in Amarillo, Texas.
Three decades later, in the 1990s, the federal government decided that helium could be sold to private entities. Now, reports say those reserves have been depleted, and the reserve is slated for shutdown in September, while the United States is taking over 2 billion cubic feet of helium off the market. For national security, Big Tech, biomedicine and even the space race, the situation may now be nearing critical. And one junior Canadian explorer who recently scooped up highly prospective helium property in both the U.S. state of Montana and the Canadian province of Alberta is hoping to be part of the change for the course our helium trajectory. Avanti Energy Inc. (TSX:AVN.V; US OTC:ARGYF) is aiming for the next big commercial helium discovery, and it’s a small-cap stock that could end up rewarding early-in investors significantly, if successful. And from where we stand, it looks well positioned to take advantage of a critical supply squeeze looming for helium.

Our Tech Future May Depend on Helium

Everything from Big Data, fiber optics and MRIs to astrophysics, space travel and cryogenics relies on helium. There’s no winning the race against China for global tech dominance without helium. There might be no winning the space race, either. Advancements in healthcare could be severely hindered. You probably wouldn’t be able to get an MRI. And perhaps most significantly, at least to the masses in the immediate term. No one would be able to stream TV and movies … or even use a cell phone. Helium is usually found in natural gas reservoirs and mined as a by-product of natural gas.
This noble gas is so valuable because it’s non-combustible, very unreactive, highly stable and so light that Earth’s gravity cannot hold it. Helium is non-toxic and boils at -268 degrees Celsius–near absolute zero, which is the lowest temperature in the universe. No other element can perform the invaluable act of remaining a liquid at such temperatures. That’s what makes helium a noble gas that cannot be replaced. And investors will like the fact that it’s already a hundred times more expensive than natural gas, which sells for around $3 per Mcf. Helium can sell for as much as $400 Mcf, and isn’t traded like a commodity—yet. Now, get ready for what looks to us like the supply squeeze of the century. One that could last decades.
There is no better time for a junior explorer to be launching exploration in prospective helium territory. And it looks like there are no better venues that Alberta—which is already witnessing a helium land rush—and Canada’s Saskatchewan, which is on trend with key areas of Montana.

Fast-Paced Acquisitions

Avanti Energy Inc. (TSX: AVN.V; US OTC: ARGYF) took decisive action in the second quarter of this year, with four major acquisition moves we think are significant. First, it acquired the license for over 6,000 acres from the Government of Alberta in highly prospective helium territory. Next, it scooped up another ~2,500 acres in Alberta. Those projects–Knappen and Aden–show helium up to 2% and helium-trapping structures. Shortly afterwards, Avanti moved on over 60,000 acres in northern Montana, on territory that is said to be on-trend with both Saskatchewan’s helium prospects and Alberta’s. In mid-April, Avanti moved to acquire the helium license rights to a 12,000-acre land package in Montana. According to reports, that deal should close soon. In June, Avanti announced intentions to purchase the helium license rights for ~50,000 more acres in Montana. The deal is still being finalized, but initial data shows multiple formations (similar to the Aden project) and data from surrounding wells makes this one even more promising in our perspective: That data showed 1.5%-2.2% helium in the Cambrian and 0.7%-1.7% helium in the Devonian. Again, with high nitrogen levels (up to 96%). Back in Alberta, at Avanti’s Knappen project, data shows helium concentrations up to 2.18%, with nitrogen up to 98%. Additionally, data shows deep structural features for trapping helium. (Keep in mind that in Alberta, reports say 1% helium is considered a very good concentration.) At the Aden project, also in Alberta, similar results and helium concentrations have been shown in multiple zones. For Alberta, it’s great news because the province is reinventing itself: It’s not only going to be about dirty oilsands in the future. The future is critical gas supplies, and Alberta could become a major global hub for helium. Experienced Explorers Who’ve Been Part Of This Before. The key figures behind Avanti Energy Inc. (TSX: AVN.V; US OTC: ARGYF) are experienced in exploration. And they know discovery, too. Several team members were involved in giant Encana’s natural gas discovery in Canada’s Montney shale—a play that ended up producing around 300,000 boe/d over 15 years. One of those key figures is Chris Bakker, Avanti’s CEO who has over 20 years of O&G experience, including with Encana. His expertise in acquisitions, exploration and production has already been tested in the past.

Are Insiders Going All-In on Avanti?

Reports show that insiders have been buying up this stock, and we think that’s always a good sign. It’s now on analyst radar, too. Recently, Beacon Securities Limited initiated coverage on Avanti, stating that with the new ~50,000 acres in Montana, Avanti could have “a contiguous land block that may support several years of drilling”. Beacon also noted that “if successful, numerous development wells would follow with production in H2/22 once facilities are configured and installed”. But in our view this one could move fast. On July 12th, following a detailed geophysical review of seismic data, Avanti Energy Inc. (TSXV: AVN) (US OTC PINK: ARGYF) identified three potential drilling locations on its Aden property and says it will now be moving forward with its planned Q3/Q4 drilling program. Not only did the team’s geophysical review of seismic data confirm a four-way structural close with over 75 meters of relief, ideal for trapping helium, Avanti said it would target multiple horizons showing up to ~95% nitrogen and ~2% helium from multiple adjacent wells and previously abandoned wells on the property. Not only is Avanti moving fast, but we think the land rush in Alberta is taking on proportions appropriate for a looming helium shortage that could make or break our tech dominance, and much, much more.

The Resource Industry Is Booming

As demand for energy continues to explode in a post-pandemic China, CNOOC Limited (NYSE:CEO, TSX:CNU) will likely be one of the biggest winners in this boom. It’s the country’s most significant producer of offshore crude oil and natural gas and may well be one of the most controversial oil stocks for investors on the market. A label that has nothing to do with its operations, however. Just last month, U.S. regulators announced their intention to de-list Chinese companies from the New York Stock Exchange, going back on their announcement just a few days later. The sustained negative press surrounding Chinese companies, however, has put CNOOC in an uncomfortable position for investors. While many analysts see the company as significantly undervalued, it is still struggling to gain traction in U.S. markets. Lithium Americas Corp. (NYSE:LAC, TSX:LAC) is one of North America’s most important and successful pure-play lithium companies. With two world-class lithium projects in Argentina and Nevada, Lithium Americas is well-positioned to ride the wave of growing lithium demand in the years to come. It’s already raised nearly a billion dollars in equity and debt, showing that investors have a ton of interest in the company’s ambitious plans, and it will likely continue its promising growth and expansion for years to come. It’s not ignoring the growing demand from investors for responsible and sustainable mining, either. In fact, one of its primary goals is to create a positive impact on society and the environment through its projects. This includes cleaner mining tech, strong workplace safety practices, a range of opportunities for employees, and strong relationships with local governments to ensure that not only are its employees being taken care of, but locals as well. Lithium Americas’ efforts have paid off in the market, as well. While many companies across multiple industries struggled last year, Lithium Americas’ stock soared. In February last year, the company’s stock price was sitting at just $5.26, while today it is at $13.32, representing a more than 100% return for investors who bought in just a year ago. Turquoise Hill Resources Ltd. (NYSE:TRQ, TSX:TRQ) is a key player in Canada’s resource and mineral industry. It is a major producer of coal and zinc, two resources with distinctly different futures. While headlines are already touting the end of coal, zinc is a mineral that will play a key role in the future of energy for years and years to come. In addition to its zinc operations, Turquoise Hill is also a significant producer of Uranium. Uranium is a key material in the production of nuclear energy, which many analysts are suggesting could be a major component in the global transition to cleaner energy. While the mineral has not seen significant price action in recent years, there are a number of new projects set to come online across the globe in the medium term, which could be a boon to Turquoise Hill, especially as alternative energies gain traction in the marketplace. Teck Resources (NYSE:TECK, TSX:TECK) could be one of the best-diversified miners out there, with a broad portfolio of Copper, Zinc, Energy, Gold, Silver and Molybdenum assets. It’s even involved in the oil scene! With its free cash flow and a lower volatility outlook for base metals in combination with a growing push for copper and zinc to create batteries, Teck could emerge as one of the year’s most exciting miners. Though Teck has not quite returned to its January highs, it has seen a promising rebound since April lows. In addition to its positive trajectory, the company has seen a fair amount of insider buying, which tells shareholders that the management team is serious about continuing to add shareholder value. In addition to insider buying, Teck has been added to a number of hedge fund portfolios as well, suggesting that not only do insiders believe in the company, but also the smart money that’s really driving the markets. Celestica (NYSE:CLS, TSX:CLS), like Magna, is a key company in the lithium boom due to is role as one of the top manufacturers of electronics in the Americas. Celestica’s wide range of products includes but is not limited to communications solutions, enterprise and cloud services, aerospace and defense products, renewable energy and enough health technology. Thanks to its exposure to the renewable energy market, Celestica’s future is tied hand-in-hand with the green energy boom that’s sweeping the world at the moment. It helps build smart and efficient products that integrate the latest in power generation, conversion and management technology to deliver smarter, more efficient grid and off-grid applications for the world’s leading energy equipment manufacturers and developers. Like the rest of the market, Celestica fell victim to the massive selloff sparked by the global COVID-19 pandemic, seeing its share price fall into the $2 range in March 2020. Since then, however, the stock price has soared by nearly 400% to its current trading price of $8.11. As the world races towards a greener future, however, the upside potential for Celestica could be even higher.

By. James Burgess

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Helium: Fuelling the Future?

What is Helium? HELIUM, deriving from the Greek word ‘Helios’, Ήλιος’, meaning ‘Sun’, and with the elementary symbol ‘He’ (in the elements periodic table) is a colourless, odourless gaseous element. Helium is considered one of the noble gases; how could it not be? It is the element of the Sun itself!

Helium has a peculiar and very interesting fact attached to it: it is the only element discovered out of Earth before it was discovered on our planet. It was eventually discovered and isolated around 1895 by Sir William Ramsay, a British chemist, who recovered it from a uranium-bearing mineral. It was concluded that it can usually be found in places where deposits of natural gas exist. The real difficulty lies with the fact that separation and extraction of helium from other gasses is a bit complicated. The element has some unique qualities. Being non-combustible, helium is preferred to hydrogen as the lifting gas in lighter-than-air itself. Helium possesses 92% of the lifting power of hydrogen, although it bears double the weight of hydrogen. Liquid helium boils at approximately -268.93 Centigrade (4.2 Kelvin) and will not freeze at atmospheric pressure conditions. Solid helium will form when pressures above 20 times atmospheric are provided. Liquid helium, due to its extremely low boiling point, can be used in cryogenic systems when temperatures below the boiling point of nitrogen are required. The way to cool down objects is to submerge them in liquid helium or liquid nitrogen. Liquid helium and nitrogen are usually stored in vacuum insulated flasks (we commonly know these containers as ‘thermos’), officially called ‘Dewars’, named after their inventor, Sir James Dewar. Liquid helium is probably the coldest fluid that exists in nature. That being said, the unwanted substances that lie within liquid helium, or ‘impurities’, will be in a frozen, solid condition which makes it relatively simple to eliminate and get ‘optically clean’ liquid. Within the cryogenics scientific community, they distinguish the different kinds of helium. The main distinction is between the two naturally occurring isotopes, Helium 3 and Helium 4. Helium 4 makes up over 99% of the natural Helium, therefore this is the Helium we refer to when we do not specify the isotope. Helium 3 (He3) is in fact the rarer isotope, and boils at 3.2 Kelvin, one degree less than Helium 4. Both isotopes can be cooled to below their boiling temperatures by regulating pressure, reaching points below atmospheric pressure. Liquid helium, behaves like water boiling at lower temperatures if pressure is lower.

But there is also the curious case of Helium 2, an extremely unstable – and still very interesting – isotope. In order to explain its strange behaviour, scientists established the two-fluid model. Helium 2 is depicted as a combination of two fluids: normal helium and superfluid helium. At temperatures just below the lambda point, the temperature at which normal fluid helium makes the transition to superfluid helium, the mixture is almost entirely normal. While temperatures are dropping, more and more of the substance becomes superfluid.

Here are some of the very interesting properties of the superfluid helium:

It carries no thermal energy, which means no entropy;
It has no viscosity, no thickness, and therefore is can be deformed instantly (flow through gaps, for example);
It naturally ‘seeks’ heat, which converts the superfluid to normal. The flow of superfluid into any heated area will cool that area and restore the uniform mixture of normal and superfluid.

Helium: Fuelling the Future?

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How To Invest in Helium as The Price Heads Higher And Higher

Helium gas is a highly versatile commodity in short supply. The bull market is far from over: we have had the aperitifs, but the dancing is still to come, says Dominic Frisby

Every few years a bull market comes along in a niche, but strategically important commodity. I’ve seen it in cobalt, lithium, graphite, phosphate, uranium, rare-earth metals and many others. Get the timing right and you can make a great deal of money. The story is almost always the same. Years of underinvestment has led to a shortage of supply of the commodity. Government stockpiles are exhausted. And now, suddenly, the commodity is essential to some new technology. Cue bull market. The trick is to identify tomorrow’s commodity today. With this in mind, I have, for a couple of years now been beating the drum about helium. I first recommended it on these pages in late 2018. Now the party is getting started. We have had the aperitifs – but the dancing is still to come. Helium has a multitude of uses beyond the one we all know it for: balloons. It is inert and has the lowest boiling point of any element. That is why it is used as a coolant for nuclear reactors and magnetic resonance imaging (MRI) machines. It is also a suitable refrigerant in cryogenics research. It is mostly used in digital technology, however, notably in high-capacity hard drives in data centres (helium-filled drives boost capacity by 50% as the gas takes up less space than air) and also in the production of barcode readers, computer chips, semiconductors, LCD panels and fibre-optic cables. Qatar and the US are the top producers, but supply is in decline. Roughly 20% of global demand was met by the US selling off its national reserves. With those reserves now gone, how will the demand be met?

Copycats are coming to market

Since I highlighted the topic my preferred helium play has been Canadian micro cap Desert Mountain Energy (Vancouver: DME); it was trading around C$0.20 in 2018. It’s done astonishingly well and today sits at all-time highs around C$4.50. It has made what appears to be a major discovery in Arizona (still unconfirmed) and is getting ready to move into production later this year. What was a micro cap now has a market value of around C$300m. In phase two of a bull market, copycats emerge. The fundamentals for helium investment are strong and they will remain strong until the explorers turn any discoveries they make into actual production, but there are now several ways to bet on the gas. We still have phase three of the bull market – the mania – to come. I still like Desert Mountain Energy as a way to play this. If production goes to plan (there’s that word “if” again) then this could be a billion-dollar company. We should see plenty of news flow in the coming weeks. We know its latest drilling has encountered helium. We are waiting to find out how much. Not far behind in terms of market value is London-listed Helium One Global (Aim: HE1), which I have also mentioned in MoneyWeek before. It has done very well too, going from 4p when it listed late last year to 27p last month; it has since fallen back to around 22p, giving it a market cap of £135m. The group’s assets are promising, but the location, Tanzania, is not as convenient for Silicon Valley as Desert Mountain Energy’s Arizona. North America accounts for 60% of global demand for helium. Looking further down the chain at some spicy smaller stocks that could rocket, we now have plenty of options. Many of them listed only in the last few months, mostly in Canada, so to play this you will need a broker who deals in Canadian and, to a lesser extent, Australian stocks. We have: First Helium (Vancouver: HELI), Avanti Energy (Vancouver: AVN), Royal Helium (Vancouver: RHC), Blue Star Helium (Sydney: BNL), Global Helium Corp (Toronto: HECO), Helium Ventures (London’s Acquis Stock Exchange: HEV) and Imperial Helium (Vancouver: IHC), which describes itself as private on its website, even though it has been trading on Canada’s TSX Venture Exchange since May.

The pick of the new bunch

Imperial Helium, with a market value of C$27m including C$13m in cash, is my choice: progress on the ground appears to be better than it is with the website. Imperial has “spudded” the first of two appraisal wells it plans to drill at its Steveville property in southeastern Alberta on schedule. That is to say, drilling has begun. It will now continue to a depth of 2,000 metres, followed by testing, and we should see the results in August. The aim is to confirm helium concentrations first discovered in 1940. Imperial has also started road construction at the property, which lends credence to its stated goal that it will be producing and selling helium by next year to sell into “ready markets partnering with commercial gas buyers”. I own shares in the group.

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