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Helium Exploration & Development Company Offers ‘Key Advantages’

July 12, 2021  |   by   Kyle Hookey
News Media

In a June 1 research note, analyst Phil Skolnick reported that Eight Capital initiated coverage on Imperial Helium Corp. (IHC:TSX.V) with a Buy rating and a CA$1 per share target. The current share price is CA$0.34.

The investment firm is bullish on Imperial Helium, Skolnick noted, because it has numerous advantages that help derisk its development plan and position it for success.

Imperial Helium is an exploration and development company focused on past producing assets in Alberta and British Columbia. Through an extensive, four-year analysis of about 650,000 drilled wells in those two provinces, it identified key helium targets and amassed a sizable database, Skolnick relayed.

“Imperial’s analysis is truly proprietary,” wrote Skolnick.

He explained that the company has a lower-risk, twofold strategy. One part is exploration. The other is securing and re-drilling assets in areas of previous helium discoveries, starting with the Steveville in southern Alberta.

“We expect Imperial Helium to continue to seek further helium project development opportunities,” Skolnick commented.

Imperial’s two land lease packages in Alberta, which encompass Steveville, span 95 square miles and contain an estimated 1.1 billion cubic feet of recoverable helium. The well bores on the property show an average helium concentration of 0.63%.

The British Columbia-based company plans to produce 99.999% pure helium using pressure swing absorption technology, Skolnick added. This approach will allow it to garner a premium price for its helium and, potentially, to monetize other gases like nitrogen.

As for a timeline, indicated Skolnick, Imperial intends to start producing and generating cash from up to three wells by Q4/22. It then would commence development construction in late 2023/early 2024 and achieve peak production of 40 million cubic feet of raw gas per day a year later.

Skolnick highlighted that Eight Capital’s financial calculations on Imperial indicate strong free cash flow, with payout taking place 2.75 years after first production, and a 62% full cycle internal rate of return.

“The potential economics of Imperial’s expected development plan look attractive,” Skolnick wrote.

In addition to production, Imperial aims to build a centralized helium separation and purification hub in Alberta, which would allow other gas producers to make money off of the helium they vent into the air.

Also, Skolnick highlighted that Imperial has strategic alliances in place with various companies: “A key to IHC’s expected success is that it has created strategic alliances with various players that have expertise in all areas of a fully integrated helium business: Cronin Capital, Petrel Robertson, ON2 Solutions and Uniper Trading.”

Skolnick noted, too, that Imperial is advantaged with a strong management team and board of directors, composed of individuals with extensive relevant experience and expertise. For instance, CEO David Johnson has experience in Canadian exploration and production (35 years’ worth) and in business development, operations, geoscience research and the technical aspects of exploration and production. The list of companies he has worked for include Shell Canada, ExxonMobil, Husky Energy, Kuwait Oil Co. and KUFPEC.

Editor’s Note: On July 5, Imperial Helium announced the spud of initial well at the Steveville property.

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Imperial Helium. Click here for important disclosures about sponsor fees.
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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Imperial Helium, a company mentioned in this article.

Disclosures from Eight Capital, Imperial Helium Corp., June 1, 2021

Conflicts of Interest: Eight Capital has written procedures designed to identify and manage potential conflicts of interest that arise in connection with its research and other businesses. The compensation of each Research Analyst/Associate involved in the preparation of this research report is based competitively upon several criteria, including performance assessment criteria, the quality of research and the value of the services they provide to clients of Eight Capital. The Research Analyst compensation pool includes revenues from several sources, including sales, trading and investment banking. Research analysts and associates do not receive compensation based upon revenues from specific investment banking transactions.

Eight Capital generally restricts any research analyst/associate and any member of his or her household from executing trades in the securities of a company that such research analyst covers, with limited exception.

Research Analyst Certification
Each Research Analyst and/or Associate who is involved in the preparation of this research report hereby certifies that:
• the views and recommendations expressed herein accurately reflect his/her personal views about any and all of the securities or issuers that are the subject matter of this research report;
• his/her compensation is not and will not be directly related to the specific recommendations or views expressed by the Research Analyst in this research report;
• they have not affected a trade in a security of any class of the issuer whether directly or indirectly through derivatives within the 30-day period prior to the publication of this research report;
• they have not distributed or discussed this Research Report to/with the issuer, investment banking at Eight Capital or any other third party except for the sole purpose of verifying factual information; and
• they are unaware of any other potential conflicts of interest.

The Research Analyst involved in the preparation of this research report does not have any authority whatsoever (actual, implied or apparent) to act on behalf of any issuer mentioned in this research report.

Company Specific Disclosures
Eight Capital and/or its affiliated companies have provided investment banking services to Imperial Helium Corp. in the past 12 months.

IIROC Rule 3400 Disclosures: A link (here) is provided in all research reports delivered by electronic means to disclosures required under IIROC Rule 3400, including disclosures for sector research reports covering six or more issuers.