With mounting prices and surging demand, helium shows great promise for investors, particularly in Saskatchewan, where the provincial government plans to secure 10 percent of the global market by 2030.
Declared a critical mineral by the Canadian federal government in 2021, this rare and non-renewable resource has an impressive range of applications. In the medical sector, for instance, the noble gas is an essential component in the cooling of massive magnets within MRI machines. For the technology industry, it plays a pivotal role in the production of fiber-optic cables, semiconductor chips, and other computer hardware.
These are only a few of the many fields which require helium for their continued success. 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 in pursuit of reduced and zero-emissions targets, 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 United States, which formerly supplied nearly 75 percent of helium worldwide, exited the market in 2021 due to ongoing failures at the country’s primary production facility. 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 U$280 per million cubic feet (Mmcf) to over U$600 per Mmcf. As multiple industries, companies, and governments scramble to secure new sources for the element, we can likely expect the price 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 prevalent element in the known universe. Space contains vast quantities of helium, with the moon believed to hold vast reserves of helium-three, a component in sustainable nuclear fusion reactors.
Understanding Saskatchewan's Helium Action Plan
In 2021, the government of Saskatchewan 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 one 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. Yet 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. In part, this is tied to where helium is most commonly found. Namely, it’s 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 and is home to one of the most highly concentrated helium resources in the world. Unlike most other global jurisdictions where helium must be captured as a by-product of natural gas production, operators can drill for helium itself, a process that is identical to drilling for natural gas but with lower environmental impact.
Lofty plans in Saskatchewan’s helium sector
Currently, the most established helium company operating in Saskatchewan is North American Helium but there are other companies as well, including Canadian Helium and Weil Group Resources. The three companies produce a combined total of 60 million cubic feet of helium per year. In addition, there are a number of highly-promising exploration companies currently engaging with Saskatchewan's helium sector.
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 has identified several targets for drilling, which is set to begin in June 2022.
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's importance to multiple high-tech industries, its potential as a clean fuel source, and its overall scarcity, make it a highly promising investment. That there are such rich deposits in Saskatchewan, one of the most attractive fiscal and regulatory jurisdictions in the world, only further 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.
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