Helium Evolution

Overview

Home to the largest helium purification facility in Canada and one of the most highly concentrated helium resources in the world, the province of Saskatchewan is an emerging jurisdiction for helium exploration and production. With its proximity to the US, one of the world’s largest helium consumers, the province is accelerating the development of its helium sector.

Through the Helium Action Plan, launched in 2021, the Saskatchewan government aims to improve its competitiveness and increase investments across the helium value chain: from exploration and production to innovation, processing and exports.

Helium Evolution (TSXV:HEVI) is a Canadian helium exploration and production company focused on developing its helium assets in southern Saskatchewan. It’s leveraging Saskatchewan’s value proposition as a ‘green’ alternative to harvesting helium as a byproduct of natural gas. HEVI owns land rights to approximately 5.6 million acres, representing the largest land package in Canada controlled by a public entity.

HEVI’s land package is located in a helium-rich area and in close proximity to the US market, which is among the largest helium consumers in the world.

HEVI selected southern Saskatchewan for a variety of reasons. First, the decaying uranium in the area’s basement rocks has produced significant helium reserves throughout southern Saskatchewan. Second, Helium Evolution’s target geological formation, known as “The Deadwood”, contains up to 2 percent proven helium content alongside more than 95 percent nitrogen content. Existing geophysical data is readily available and will help Helium Evolution select the best drill targets.

Why does this matter? The presence of nitrogen as the carrier gas allows Helium Evolution to vent the gas in an environmentally friendly manner while also providing cost advantages during the helium extraction and liquefaction processes. Additionally, drilling for helium is similar to extracting conventional natural gas, meaning there’s no need for specialized equipment, and management’s existing oil and gas development expertise can be leveraged. Low-cost vertical drilling is all that’s required for HEVI to begin extraction.

HEVI’s unique competitive advantage comes in the form of a farm-out agreement with and a $3.5-million equity investment by North American Helium (NAH). The farm-out deal enables NAH to drill five development wells on HEVI land, with an option for two additional wells, offering HEVI near-term drilling catalysts that can accelerate cash flow generation without incurring up-front capital costs, all while retaining 99 percent of its land base.

The agreement also provides HEVI, at no cost, NAH’s proprietary seismic recently used to drill three successful and producing NAH wells in the Mankota area, giving HEVI greater insight and valuable data that can be used in identifying future targets.

HEVI’s landholding is adjacent to NAH’s discovery of two helium pools at Mankota and Cadillac. The Mankota Pool is a nitrogen-rich reserve with helium concentrations of 0.94 percent to 1.08 percent.

In November 2023, HEVI made its first joint helium discovery with NAH following the completion of the Deadwood zone and initial testing of the joint well drilled at 2-31-2-8W3 (Joint Well #1). The well underwent a series of tests to confirm flow rates, reservoir boundaries and gas composition, all of which represent important data points to help inform future development plans in the area. Joint Well #1 had helium concentrations of 0.95 percent – more than three times the 0.3 percent level deemed commercially viable – and 96 percent nitrogen. This gas composition is consistent with NAH's producing helium pool 15 kilometers to the north, supporting HEVI's belief that the area offers meaningful potential for commercial helium development.

HEVI is led by an impressive management team with a combined 150 years of resource development experience, including engineering, geological and executive management across the corporate landscape. CEO Greg Robb boasts 35 years of direct experience in Western Canada, where he focused on the acquisition and development of natural resources in the region. Patrick Mills, COO, brings over three decades of executive, managerial and engineering experience in Western Canada. Kristi Kunec, CFO, brings over 15 years of financial experience to HEVI, with a proven track record that includes leading the corporate finance, organizational planning and financial reporting functions for growing resource companies. Furthermore, vice-president John Kanderka has 40 years of directly applicable experience in the energy and mineral sectors, serving as an officer in both public and private entities. The management team is complemented by a strong board of directors, including the former premier of Saskatchewan, Brad Wall.

Company Highlights

• Helium Evolution Incorporated (HEVI) is capitalizing on the untapped potential of Saskatchewan’s helium resource.
• The company has land rights to approximately 5.6 million acres, representing the largest land package held by a public company in North America.
• HEVI made its first helium discovery with 0.95 percent helium concentration at Joint Well #1, confirming an important step along HEVI's journey to achieving scalable helium production.
• HEVI’s Saskatchewan holdings put the company in a natural resource-friendly province with a skilled local workforce and a supportive government.
• HEVI is focused on helium extraction in wells that have nitrogen as the carrier gas, creating an environmentally friendly operation that will also create a cost advantage during the extraction and liquefaction processes.
• HEVI’s land package contains significant helium targets created by radioactive decay; existing exploration data will help the company select drill targets offering higher probabilities of success.
• Enhanced farm-out agreement with North American Helium provides HEVI near-term drilling catalysts that can accelerate cash flow generation without incurring up-front capital costs.
• The company is led by an impressive management team with a combined 150 years of experience in resource development and executive leadership.