Market InsightNews

Exploring Saskatchewan’s Rapidly Growing Helium Industry

Declared a critical mineral by the Canadian federal government in 2021, helium is a rare and non-renewable resource has an impressive range of applications.

In the medical sector, for instance, the noble gas helps cool the massive magnets within MRI machines. For the technology industry, it plays a pivotal role in the production of fiber optic cables, microchips and other computer hardware.

These use cases barely scratch the surface. Helium is used in everything from medical research to aerospace and manufacturing. Some have even suggested that, as the world continues to seek cleaner energy alternatives to oil and natural gas, helium could emerge as a top contender.

Helium — a rare yet prevalent resource

There’s just one problem — not for the first time, the world now faces a global helium shortage. The US, which formerly supplied nearly 75 percent of helium worldwide, will be ceasing public sales in September 2022. The ongoing conflict between Russia and Ukraine further threatens supply, with the former being the world’s fourth-largest producer.

These factors have unsurprisingly led to a dramatic price increase for the commodity, causing it to soar from US$280 per thousand cubic feet (mcf) to over US$600 per mcf. As multiple industries, companies and governments scramble to secure new sources for the gas, the price is likely to increase even further.

There’s a certain irony to this whole scenario. Although helium is among the rarest elements on Earth, it’s actually the second most common element in the known universe. The moon, for instance, is said to hold vast reserves of helium-3, a component in sustainable nuclear fusion reactors.

Understanding Saskatchewan’s Helium Action Plan

In 2021, the government of Saskatchewan, Canada, announced the Helium Action Plan. This initiative aims to capture 10 percent of the global helium market by 2030. At the time of the announcement, the province only supplied 1 percent of the world’s helium. The plan includes commitments to growing the entire helium chain, including exploration, production and processing infrastructure.

The Helium Action Plan is projected to create more than 500 permanent positions, while also providing considerable support to the construction and service sectors. Saskatchewan plans to add over 150 dedicated helium wells and construct up to 15 helium purification and liquefaction facilities.

Although it may be home to Canada’s largest helium production facility, this might still appear at first glance to be an overambitious goal. However, there is a great deal currently playing in Saskatchewan’s favour.

First and foremost is the fact that Canada is home to the fifth-largest known reserves of helium in the world, with a significant percentage of that supply concentrated in this prairie province. Its prevalence in Saskatchewan is tied to the fact that helium is found buried deep within oil and gas wells, courtesy of decaying thorium and uranium deposits.

Like its neighbour Alberta, Saskatchewan has traditionally been home to a thriving oil and gas sector. Orphaned and defunct wells, their reserves long since depleted, can be repurposed for helium extraction, given that drilling for helium is an identical process to drilling for natural gas. Not only would this serve to revitalize Saskatchewan’s mining industry, but it also makes the region highly attractive for mining companies.

Lofty plans in Saskatchewan’s helium sector

Currently, the top three helium companies operating in Saskatchewan are private companies North American Helium, Canadian Helium and Weil Group Resources. The three companies produce a combined total of 60 million cubic feet of helium per year. Alongside these market leaders, there are also a number of highly promising exploration companies currently engaging with Saskatchewan’s helium sector.

Global Helium (CSE:HECO,OTC Pink:HECOF) operates a flagship project situated in Saskatchewan’s non-combustible gas fairway. The claims currently cover an area of 668,000 acres. The company will control all phases of drilling and production and has tentative plans to construct and operate a liquefaction facility. It’s currently in the process of acquiring more exploration rights.

Helium Evolution (TSXV:HEVI), which recently began trading on the TSX Venture exchange, is another major contender in Saskatchewan’s helium market. It has the distinction of holding the largest helium land position in North America amongst publicly traded companies, with a total of 5.4 million acres of exploration permits. The land held by Helium Evolution is in close proximity to the recent drilling activity of North American Helium.

To date, Helium Evolution has purchased and shot over 650 kilometers of seismic data and identified several targets for drilling, which is set to begin June 2022.

The takeaway

Helium’s importance to multiple high-tech industries, its potential as a clean fuel source and its overall scarcity could make it a highly promising investment. That there are such rich deposits in Saskatchewan, one of the most attractive mining jurisdictions in the world, only sweetens the deal. Although the province has set an ambitious goal, the potential earnings for investors should this goal be fulfilled are considerable indeed.

This INNSpired article is sponsored by Helium Evolution (TSXV:HEVI). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by Helium Evolutionin order to help investors learn more about the company. Helium Evolution is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.

This INNSpired article was written according to INN editorial standards to educate investors.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Helium Evolution and seek advice from a qualified investment advisor.

Source link

Show More

Related Articles

Leave a Reply

Your email address will not be published.