Helium Evolution Incorporated (TSXV:HEVI)
("
HEVI" or the "
Company"), a
Canadian-based helium exploration and production company focused on
developing assets in southern Saskatchewan, is pleased to announce
that our first helium well, HEI 06-12-006-05W3M
(“
HEI-1”), was spud on June 25, 2022 at the
Company’s 100% owned and operated McCord property in southern
Saskatchewan, described in more detail below. In addition, further
to our news release dated June 9, 2022, the Company has closed our
non–brokered, brokered and strategic investor private placements
raising aggregate gross proceeds of $6,918,200 through the issuance
of 17,295,500 total units (“
Units”) at $0.40 per
Unit.
First Well Spud at McCord
Property
Drilling of HEI-1 is expected to take
approximately 15 days from the spud date to reach total depth of
approximately 2,670 metres targeting the Deadwood formation. The
HEI-1 well location targets a structural high, a geological
characteristic typically associated with high concentrations of
helium, and was selected based on detailed geological and
geophysical seismic interpretation of the Deadwood formation.
Offsetting wells have been drilled in the immediate area by other
operators.
“Spudding our first well at McCord is another
significant milestone for HEVI. The HEI-1 drill represents one of
six locations already identified on the McCord property in our
inaugural 2022 drilling campaign,” said Greg Robb, President &
CEO of HEVI. “Our drilling program is a critical step in
successfully proving up our acreage at McCord and supporting our
broader commercialization plans. As a result of our farmout
agreement, HEVI’s program will be complemented by North American
Helium Inc. ("NAH") drilling five, 100% funded
wells across other land blocks in HEVI’s portfolio, with the view
to validating the prospective nature of our overall helium land
base.”
Once drilling concludes, the HEI-1 well will be
completed over a 14-day period, during which the Company will
conduct flow testing. Preliminary results from the flow test are
anticipated by the end of July, with further wells expected to be
drilled predicated on the success of HEI-1. Since the spring of
2022, HEVI has also been advancing the engineering and design
required for processing facilities while also engaging in
discussions to secure an offtake agreement.
Farmout Agreement with
North American Helium Inc.
As announced on June 9th, the Company has
entered into a farmout agreement with NAH pursuant to which 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
drilled, NAH will earn 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.
In connection with the entering into of the
farmout agreement, HEVI and NAH have entered 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 Offerings (as defined herein). 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.
Private Placement
Pursuant to the Offering, HEVI issued: (i)
8,750,000 Units to NAH for total gross proceeds of $3,500,000 (the
“Strategic Investor Private Placement”); (ii)
3,175,500 Units via a non-brokered private placement for gross
proceeds of $1,270,200 (the “Non-Brokered
Private Placement”); and (iii) 5,370,000 Units via
a brokered private placement with Peters & Co. Limited
(“Peters & Co.” or the
“Agent") acting as sole bookrunner, for gross
proceeds of $2,148,000 (the “Brokered Offering”
and combined with the Strategic Investor Private Placement and
Non-Brokered Private Placement, the
“Offerings”).
Each Unit is comprised of one common share of
HEVI ("Common Share") and one third of one Common
Share purchase warrant (each whole warrant, a
“Warrant”) with each whole Warrant entitling 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
from today (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 Common Share, the Company may accelerate the Expiry Date
by giving notice thereof to the holders of the Warrants, 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 today.
All Common Shares (including any Common Shares
issuable on exercise of the Warrants) and Warrants issued under the
Offerings are subject to a hold period expiring four months and one
day from closing in accordance with applicable securities laws.
Pursuant to the Offerings, a total of 17,295,500
Common Shares and 5,765,152 Warrants were issued to subscribers. In
connection with the Offerings, the Company paid commissions and
finders fees totalling $349,960. In addition, the Company issued
175,000 Warrants to a finder in connection with the Strategic
Investor Private Placement.
The net proceeds of the Offerings will be used
to fund HEVI’s obligations with respect to the HEVI Working
Interest (as defined below), including with respect to drilling and
facilities, the ongoing drilling and development capital
expenditure program of the Company and for general corporate
purposes.
Certain directors and officers of the Company
(the "Related Parties") subscribed for an
aggregate of 2,130,000 Units pursuant to the Non-Brokered Private
Placement, with such subscriptions constituting, in each case, a
"related party transaction" under Multilateral Instrument 61-101 -
Protection of Minority Securityholders in Special Transactions
("MI 61-101"). The Company intends to rely on the
exemptions from the valuation and the minority approval
requirements of MI 61-101 provided for in subsections 5.5(a) and
5.7(1)(a) of MI 61-101, respectively, as the fair market value of
the subject matter of, and the consideration paid in the Offerings,
in relation to the Related Parties, does not represent more than
25% of the Company's market capitalization, as determined in
accordance with MI 61-101. The participation by each of the Related
Parties in the Offerings has been approved by directors of the
Company who are independent with respect to such transactions. The
Company did not file a material change report more than 21 days
before the expected closing of the Offerings, as the details of the
Offerings were not finalized until immediately prior to the closing
and the Company wished to close the transaction as soon as
practicable for sound business reasons.
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 & CEORyan Tomlinson, CFO |
Phone:
1-587-330-2459Email: info@heliumevolution.caWeb: https://www.heliumevolution.ca/ |
|
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 Company's drilling plans, timing for completion of the HEI-1
well, the arrangements with NAH pursuant to 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 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; the Company and NAH may determine to amend the
farmout agreement; 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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