ASX-listed Blue Star Helium has continued to expand its project tenure at its Las Animas helium play in Colorado in the proven high-grade helium fairway adjacent to the historic Model Dome helium field, as the company prepares for a much-anticipated maiden multi-well drilling program.
Perth-based Blue Star, which has been steadily building its strategic land position this year, has just secured leases for a further 6,720 acres to increase its overall lease holdings to 182,000 gross or 127,000 net acres.
The US helium hopeful this week also lifted the combined prospective resources for its high-priority Enterprise and Galileo prospects by 16.5 per cent to 3.497 billion cubic feet of net recoverable helium in the 2U/P50 category. It came after an updated resource assessment carried out by North American-based energy consulting group Sproule.
Sproule is also set to soon deliver an independent review of prospective helium resources for the Pegasus and Galactica prospects, which Blue Star ranks on an equal footing with the high-grade target of Enterprise.
In the wake of the company’s growing acreage position and number of highly ranked helium prospects at Las Animas, it has bitten the bullet and now wants to drill a minimum of three wells and up to five wells in the maiden drilling campaign, versus the originally slated one well at Enterprise. All wells remain subject to drilling permit approvals and surface access agreements, however, Blue Star hopes to be drilling next year.
To that end, in order to help cover the estimated costs of its relatively shallow exploration wells – approximately US$300,000 for a dry hole and US$400,000 for a producing well – Blue Star has rattled the tin by way of a share placement to sophisticated and professional investors to the tune of $6 million. Firm commitments have been received and proceeds from the capital raise are scheduled to come through next week.
Following the issue of the 171.42 million new shares new shares, the company’s capital structure will be increased to 1.233 billion shares.
Blue Star Helium Managing Director, Joanne Kendrick said: “We have an incredibly busy schedule and this placement ensures we are funded to focus on delivering strategic leasing acquisitions and our maiden drilling campaign. The additional leases further advance our overall portfolio of prospects and leads in the Lyons Formation helium play, which has been proven in the area by the historical Model Dome field.”
Model Dome produced helium gas at an incredible grade of 8 per cent and is regarded as one of the US’s top three helium concentration fields.
Helium is a unique industrial gas that is a critical element in cooling superconducting magnets in MRI machines. It is also used for fibre optic cable manufacturing, cooling magnets in supercomputer hard drives and servers, space exploration, semiconductor manufacturing, and rocket propulsion systems to name a few of its many high-tech applications.
It has also been classified as a strategically important commodity by the US Government.
Most of the world’s helium reserves have been accrued as a by-product of the extraction of natural hydrocarbon gas. With an emerging trend in North America towards helium-centric exploration and production outside of hydrocarbon areas, Blue Star is in pole position to reap the benefits of a successful well as an early mover in the pure helium space boasting assets in close vicinity to the helium supply chain.
Is your ASX listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
