Noble Helium raises $6.1M - we participated
Our helium exploration Investment Noble Helium (ASX:NHE) has successfully received firm commitments to raise $6.1M at 15c in an oversubscribed Placement.
We participated in this placement, and were scaled back - confirming yes, that this was indeed an oversubscribed placement. This is a good sign of the broader appetite of institutional and sophisticated investors to invest in NHE.
New Exec Chairman Shaun Scott (ex Arrow Energy) also put in $100k - we always like it when management puts their own funds into the companies they run.
As per the standard market response, NHE shares came back trading today, and are sitting around the placement price of 15c.
Since our Initial Investment in NHE we’ve not sold a single share and we were happy to add to our position given the progress NHE has made since its IPO in April of this year.
NHE’s helium exploration targets are large - equivalent in value to multiple TCFs of natural gas, due to the premium pricing that helium commands.
We think NHE is about 6-9 months out from a drilling event based on recent announcements and presentations, which we like as an entry point ahead of potential share price uplift and liquidity ahead of drilling.
The shares will be issued in two tranches:
- Tranche 1 will be for 27.4 million shares to raise A$4.1M on 4 November
- Tranche 2 will be for 13.1 million shares to raise A$1.9M and will need shareholder approval at the NHE AGM on 30 November.
Pending that approval, NHE will have a post cap raise cash balance of $10.3M, which we think is a healthy position to advance the following:
- Start buying long lead items for the drilling program (Q3 2023)
- Contract a drilling program management team
- Look at potentially acquiring new helium projects using the Global Helium Atlas
What’s next for NHE? NHE Managing Director Justyn Wood said in the near term the company’s attention is squarely on finishing the 3D seismic survey, which could unlock further capital for NHE via a farm-in process.
We expect there to be significant interest during the farm-in process given the scale of resource being pursued at NHE’s Tanzanian helium project.
