Helium Evolution Incorporated (TSXV:HEVI)
("
HEVI" or the "
Company" ), a
Canadian-based helium exploration and production company focused on
developing assets in southern Saskatchewan, has entered into an
agreement with North American Helium Inc. (“
NAH”)
with respect to a proposed farmout agreement (the "
Farmout
Agreement"). NAH is a private helium company which is
engaged in the exploration, development, production, refining and
marketing of helium in North America. Concurrently with the
entering into of the Farmout Agreement, the Company intends to
complete (i) a private placement of units
(“
Units”) to NAH for total gross proceeds of $3.5
million (the “
Strategic Investor Private
Placement”), (ii) an insider private placement of Units to
directors, officers and employees of the Company for gross proceeds
of approximately $500,000 (the “
Insider Private
Placement”), and (iii) a brokered commercially reasonable
efforts private placement, with Peters & Co. Limited
(“
Peters & Co.” or the
“
Agent") for up to $4.5 million (the
“
Brokered Offering”, and combined with the
Strategic Investor Private Placement and Insider Private Placement,
the “
Offering”), for combined aggregate gross
proceeds of up to $8.5 million. In connection with the Brokered
Offering, the Company has granted the Agent an option to sell up to
an additional 15% of the Units issued under the Brokered Offering
(up to 1,687,500 Units), exercisable in whole or in part at any
time until 48 hours prior to the time of closing of the Brokered
Offering. The Offering will close on or about June 28, 2022 (the
"
Closing Date").
The Units
Each Unit will consist of one common share of
the Company (a "Common Share") and one third of
one Common Share purchase warrant (each whole warrant, a
“Warrant”). Each Warrant shall entitle the holder
thereof to purchase one Common Share of the Company at a price of
$0.70 at any time on or before the date which is 24 months after
the Closing Date (the “Expiry Date”). If the
30-day volume weighted average trading price of the Common Shares
on the TSX Venture Exchange (the "TSXV") is at or
above $1.20 per share, the Company may accelerate the Expiry Date
by giving notice thereof to the holders of the Warrant, and in such
case the Expiry Date will be the day that is 30 calendar days after
the date on which such notice is given by the Company.
Notwithstanding any of the foregoing, the Expiry Date will be no
less than six months from the Closing Date.
Farmout Agreement with North American
Helium
NAH will drill a total of five wells, incurring
100% of the drill expenditures, on three predetermined blocks of
land in Saskatchewan comprising approximately 2.3 million acres
located west of the third meridian (the “Blocks”).
For each well, NAH shall have earned an 80% operated interest in
the section on which the well was drilled plus nine contiguous
sections of land adjoining to the well, up to a maximum of 32,000
acres. The Farmout Agreement specifically excludes HEVI’s current
drilling focus in the McCord area. The Company will retain a 20%
working interest in the earned lands and each successful well
drilled by NAH (the "HEVI Working Interest").
NAH must notify HEVI of its five drilling
targets within six months following the execution date of the
Farmout Agreement, with a requirement to drill all five wells
within 24 months. NAH must drill one well in each of the three
Blocks, with no more than three wells drilled in any given Block.
HEVI remains on track to spud our first McCord well in June, with
up to six potential targets identified.
“This Farmout Agreement with North American
Helium truly sets us apart, as we are able to work with one of the
helium industry's leading operators, and to welcome them as a
strategic equity investor,” said HEVI CEO, Greg Robb. “Having this
Farmout Agreement validates our original strategy to acquire
sizeable acreage in Saskatchewan in regions featuring a high
probability of helium reserves, while the Offering allows HEVI to
successfully fund the farmout arrangement with North American
Helium and provides substantial financial flexibility to continue
executing our overall strategy.”
Strategic Investor Private
Placement
Pursuant to the Strategic Investor Private
Placement, NAH will subscribe for 8.75 million Units for total
gross proceeds of $3.5 million. In connection with the Strategic
Investor Private Placement, the Company will pay a finder's fee on
terms compliant with the policies of the TSXV.
HEVI and NAH will enter into a standstill
agreement pursuant to which NAH will be subject to certain
standstill restrictions relating to, among other things, the
acquisition of HEVI securities for a 24-month period following
completion of the Offering. In addition, HEVI and NAH have entered
into a pro rata participation and board nomination agreement
pursuant to which NAH will be permitted to maintain its pro rata
undiluted percentage of HEVI Common Shares following completion of
the Offering for a 24-month period. Furthermore, should NAH’s
ownership reach over 10% in the next two years, NAH will have a
right to appoint a nominee to the HEVI board of directors.
Use of Proceeds of the
Offering
The Offering is integral to funding the
Company's obligations with respect to the HEVI Working Interest and
as such the Company will be relying on the 'part and parcel
pricing' exemption allowed by the TSXV with respect to the pricing
of the Offering. The net proceeds of the Offering will be used to
fund HEVI’s obligations with respect to the HEVI Working Interest,
including with respect to drilling and facilities, the ongoing
drilling and development capital expenditure program of the Company
and for general corporate purposes.
Other Terms and Conditions
The Offering is subject to certain conditions
including, but not limited to, the receipt of all necessary
regulatory and other approvals including the approval of the
TSXV.
The Common Shares, Warrants and any Common
Shares issued upon exercise of the Warrants will be subject to a
four month and one day hold period under applicable Canadian
securities laws from the Closing Date.
About Helium Evolution
Incorporated
Helium Evolution is a Canadian-based helium
exploration and production company holding the largest helium land
rights position in North America among publicly-traded companies,
focused on developing assets in southern Saskatchewan. The Company
has over five million acres of land under permit near proven
discoveries of economic helium concentrations which will support
scaling the exploration and development efforts across its land
base. HEVI’s management and board are executing a differentiated
strategy to become a leading supplier of sustainably-produced
helium for the growing global helium market, offering a compelling
opportunity for investors.
For further information, please
contact:
Greg Robb, President &
CEO |
Phone: 1-587-330-2459
Email:
info@heliumevolution.caWeb: https://www.heliumevolution.ca/ |
Ryan Tomlinson, CFO |
|
|
Cindy Gray, Investor
Relations |
info@5qir.com | 403-705-5076 |
Statement Regarding Forward-Looking
Information
This news release contains statements that
constitute "forward-looking statements." Such forward looking
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results, performance or achievements,
or developments in the industry to differ materially from the
anticipated results, performance or achievements expressed or
implied by such forward-looking statements. Forward looking
statements are statements that are not historical facts and are
generally, but not always, identified by the words "expects,"
"plans," "anticipates," "believes," "intends," "estimates,"
"projects," "potential" and similar expressions, or that events or
conditions "will," "would," "may," "could" or "should" occur.
Forward-looking statements in this document
include statements regarding the Company's expectations regarding
the commencement of drilling by the Company, the closing of the
transactions disclosed in the press release, including the
completion of the Offering (including the approval of the TSXV with
respect thereto) and the entering into of the Farmout Agreement,
the use of proceeds from the Offering and other statements that are
not historical facts. By their nature, forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause our actual results, performance or
achievements, or other future events, to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors and
risks include, among others: the TSXV may refuse to grant approval
of the Offering; the transactions described in this press release
may not close; the Company may reallocate the proceeds of the
Offering for reasons that management believes are in the Company's
best interests; the Company may choose to defer, accelerate or
abandon its drilling plans; new laws or regulations and/or
unforeseen events could adversely affect the Company’s business and
results of operations; stock markets have experienced volatility
that often has been unrelated to the performance of companies and
such volatility may adversely affect the price of the Company's
securities regardless of its operating performance risks generally
associated with the exploration for and production of resources;
the uncertainty of estimates and projections relating to expenses;
constraint in the availability of services; commodity price and
exchange rate fluctuations; the current COVID-19 pandemic; adverse
weather or break-up conditions; and uncertainties resulting from
potential delays or changes in plans with respect to exploration or
development projects or capital expenditures.
When relying on forward-looking statements and
information to make decisions, investors and others should
carefully consider the foregoing factors and risks and other
uncertainties and potential events. The Company has assumed
that the material factors referred to in the previous paragraphs
will not cause such forward-looking statements and information to
differ materially from actual results or events. However, the
list of these factors is not exhaustive and is subject to change
and there can be no assurance that such assumptions will reflect
the actual outcome of such items or factors. The reader is
cautioned not to place undue reliance on any forward-looking
information. Such information, although considered reasonable by
management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated.
Forward-looking statements contained in this press release are
expressly qualified by this cautionary statement. The
forward-looking statements contained in this press release are made
as of the date of this press release. The Company does not intend,
and expressly disclaims any intention or obligation to, update or
revise any forward-looking statements whether as a result of new
information, future events or otherwise, except as required by
law.
This press release is not for distribution to
U.S. news services or for dissemination in the United States. This
press release does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities in the United
States. The securities have not been and will not be registered
under the United States Securities Act of 1933, as amended (the
"U.S. Securities Act") or any state securities laws and may not be
offered or sold within the United States or to U.S. Persons unless
registered under the U.S. Securities Act and applicable state
securities laws or an exemption from such registration is
available.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
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