Appointment of Drilling Contractor

RNS Number : 9410S

Helium One Group Ltd

22 March 2021

 

22^nd March 2021

Helium One Global Ltd

 Appointment of Drilling Contractor

Helium One (AIM: HE1) ("Helium One" or "the Company") is pleased to announce the appointment of Mitchell Drilling Limited as drilling contractor for the Company's maiden three well exploration programme on  its Rukwa Project (100%) in Tanzania.  Mitchell Drilling will mobilise a drill rig from Tanzania which is anticipated to commence work in mid-May.

Highlights

· Drilling targeted to commence in mid-May.

· Accelerated mobilisation with  rig already in country.

·Option for Mitchell Drilling to take payment for 3^rd hole as equity demonstrating commitment and confidence in the project.

·Option to expand exploration programme with 4^th hole, which would also be payable as equity to Mitchell Drilling.

· Identified rig has capability to remain on site for follow-on appraisal drilling, saving cost and time in demobilisation and remobilisation of camp and equipment.

David Minchin, Chief Executive Officer, commented:

"We are delighted to work with Mitchell Drilling as contractor for our maiden exploration drilling campaign.  Mitchell Drilling are highly experienced in gas exploration with all the technical knowledge and expertise required to deliver a safe and successful exploration campaign.

"Mitchell Drilling have indicated that they are willing to take 50% of the contract value in shares, with a commitment to drill the 3^rd hole and optional 4^th hole for equity.  Not only does this demonstrate Mitchell's commitment to the project, but also offers Helium One the potential to expand our exploration programme to include additional targets that may be identified from the current infill seismic campaign.

"Drilling is expected to commence in mid-May, supported by accelerated mobilisation with a drill rig which is already in Tanzania. The rig that Mitchell Drilling are providing is larger than originally contracted and is suitable for drilling of 6¾" appraisal wells. This will allow the Company to move directly from exploration into the appraisal phase, saving considerable time and money in demobilisation and remobilisation costs and allowing Helium One to continue the fast-track development of our globally strategic Rukwa helium project."

Details

Helium One have agreed contract terms with Mitchell Drilling for completion of a three hole exploration programme at its 100% owned Rukwa project in Tanzania.  Mitchell Drilling is a global leader in drilling technologies with over 50 years' experience and 115 rigs globally.

As a demonstration of support for the programme, Mitchell Drilling have agreed to upgrade the drill-rig and supply a larger rig at no additional cost.  The selected rig offers increased capacity, providing additional drilling power to the exploration campaign.  Importantly the rig is capable of drilling a 6¾" diameter hole to 1,200 metres, making it suitable for appraisal drilling subsequent to a discovery.

By moving directly from exploration to appraisal drilling without having to demobilise and remobilise equipment, Helium One will be able to dramatically accelerate the development of the Rukwa Project whilst also reducing associated costs. This will allow the Company to advance rapidly from discovery to resource evaluation.

Under the terms of the agreement, Mitchell Drilling may give notice at any time after the results from the first hole are announced to take payment in equity for the drilling of the third hole in the programme.  The Shares will be valued at a 10% discount to VWAP (volume weighted average price) calculated from commencement of hole one to the date that the equity notice is given.  Additionally, the parties may agree to drill a fourth hole for equity, with shares valued at a 10% discount to VWAP calculated from commencement of hole one to the date that the second equity notice was given.

Helium One and Mitchell Drilling are targeting a date in mid-May for the commencement of drilling activity.  

For further information please visit the Company's website: www.helium-one.com  

Contact

Helium One Global Ltd David Minchin, CEO	[phone]
Beaumont Cornish Ltd (Nominated Adviser) James Biddle Roland Cornish	[phone]
Canaccord Genuity Limited (Joint Broker) Adam James	[phone]
Peterhouse Capital Limited (Joint Broker) Lucy Williams	[phone]
Pello Capital (Retail Broker) Callum Hill	[phone]
Tavistock (Financial PR) Nick Elwes	[phone]

Notes to Editors

Helium One has identified a globally unique, large-scale, high-grade, primary helium project in Tanzania with the potential to become a strategic asset in resolving a supply-constrained market.

Helium One's assets are located within the rift basins on the margin of the Tanzanian Craton. Through Helium One's subsidiary companies Gogota (Tz) Limited, Stahamili (Tz) Limited and Njozi (Tz) Limited, the Company has secured 18 Prospecting Licences covering more than 4,512 km² in three distinct project areas: the Rukwa, Balangida and Eyasi projects. These are located near surface seeps with helium concentrations ranging up to 10.5% He by volume. 

The Rukwa Project is located within the Rukwa Rift Basin covering 3,448km² in south-west Tanzania.  The project is considered to be an advanced exploration project and the company has identified 4 prospects and 21 leads based on historical drilling, reprocessed seismic lines, high resolution gravity survey, and surface seep analyses.

SRK Consulting have reported a 'Best Estimate' Un-risked Prospective Resource of 138 Bcf (2U/P50) for the Company's Rukwa Project, meaning that the project has potentially strategic global implications with the ability to significantly resolve helium supply/demand issues.

All Helium One's licences are held on a 100% equity basis and are in close proximity to the required infrastructure.

Helium One is listed on the AIM market of the London Stock Exchange with the ticker of HE1.

 

END

 

 

MSCFLFLFVDILFIL