Demand for helium is rising alongside the semiconductor, healthcare and nuclear energy sectors.
Produced from natural gas wells, helium is an odorless, colorless, non-toxic, non-combustible and non-corrosive gas. While it may bring to mind birthday balloons, the element is an important industrial gas due to its cooling properties.
Helium has several critical applications across various industries witnessing market growth, including the manufacturing of semiconductors and electronics, medical imaging and nuclear power generation. An Allied Market Research study estimates that the global market for helium reached US$3.3 billion in 2022 and expects it to rise at a compound annual growth rate of 4.2 percent to hit US$4.9 billion by 2032.
Global helium supply is mainly attributable to production at liquefaction facilities spread across the US, Qatar, Algeria, Russia, Australia, Canada, Poland and China. However, increasing demand for helium as an industrial gas is spurring further exploration and development of helium projects, including in Canada and in the US.
1. Royal Helium (TSXV:RHC)
Market cap: C$66.45 million; share price: C$0.27
Royal Helium is one of the largest helium leaseholders in Canada, controlling more than 1,000,000 acres of prospective helium permits and leases across Southern Saskatchewan and Southeastern Alberta.
In October, Royal Helium completed the commissioning of its Steveville helium purification facility in Alberta and commenced startup of production. The Steveville plant is fed by two of the company’s wholly owned helium wells and has an output capacity of approximately 22,000 thousand cubic feet of 99.99 percent helium per year.
The company is now ramping towards commercial production, at which time it will become Canada’s first publicly listed helium producer. “This is a pivotal moment for Royal Helium and all its stakeholders,” Royal Helium President and CEO Andrew Davidson said in the release.
2. Avanti Helium (TSXV:AVN)
Market cap: C$38.54 million; share price: C$0.415
Avanti Helium’s helium exploration and development assets include approximately 78,000 acres within the Greater Knappen area, which covers land in both Southern Alberta and Northwest Montana, US. It also owns approximately 63,000 acres of prospective helium permits within Southwest Saskatchewan.
Avanti’s Sweetgrass pool project in Montana is on track to achieve helium production in the first half of 2024, the company reported in October. Avanti is working on obtaining a finalized offtake agreement for production at Sweetgrass.
“With cashflow coming into sight, Avanti’s team is steadily advancing toward first production in Greater Knappen,” Avanti CEO Chris Bakker stated. “The pieces are falling into place at a time when access to safe and secure helium supplies remains top of mind for many buyers.”
3. Desert Mountain Energy (TSXV:DME)
Market cap: C$30.24 million; share price: C$0.35
Next up on this list of top Canadian helium stocks is Desert Mountain Energy, which is engaged in the exploration, development and production of helium, hydrogen and noble gas projects in North America.
The company confirmed in late October the delivery of all necessary components for its West Pecos helium processing plant in New Mexico, with operational start-up anticipated for the first half of November. Desert Mountain Energy CEO Robert Rohlfing stated, “(Desert Mountain) is poised to commence operations and looks forward to realizing a positive cash flow from our consolidated revenue-generating assets.”
4. Total Helium (TSXV:TOH)
Market cap: C$15.36 million; share price: C$0.20
Total Helium holds 27,000 acres in the Holbrook Basin of Arizona, US, where its wells produce helium at concentrations of 5 percent to 8 percent. The company has a development plan for over 300 wells, with nine wells currently connected to a 6 mile pipeline and an additional 10 wells at various stages of completion.
The helium gas produced at these wells is transported via the pipeline to Ranger Development’s third-party processing facility and production is then sold to a large industrial gas company via an offtake agreement. This current offtake agreement covers the company’s first 10 wells; production from further wells brought online will be sold on the spot market.
5. Global Helium (CSE:HECO)
Market cap: C$11.7 million; share price: C$0.22
Through a farm-in agreement with Perpetual Energy (TSX:PMT), Global Helium is exploring for helium on an asset covering approximately 369,000 acres in Alberta’s Manyberries helium trend. The company also holds wholly owned permits encompassing more than 1.7 million acres in Saskatchewan’s helium fairway and has recently acquired three assets with proven helium tests in Montana.
In late October, Global Helium announced positive results following its completion and initial testing of the 09-04 helium well in the Beaverhill Lake zone of its farm-in land block. The gas helium composition of this well came in at 1.1 percent; helium concentrations between 0.3 percent to 0.5 percent are deemed commercially viable.
“We are very excited by the results observed to date from our first helium well drilled at 09-04, as the reservoir pressure, flow rates and gas composition directly correlate with management’s expectations, while the high helium concentration represents the hallmark of a material discovery,” commented Global Helium President and CEO Jesse Griffith.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.