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Helium Company 'Continues to Stand Out as a Leader in the North American Helium Pubco Space'
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Royal Helium's recent financing, its path to first production and its resource growth plan are all discussed in a Cormark Securities report.

In a June 11 research note, analyst Brent Watson reported that Cormark Securities changed its recommendation on Royal Helium Ltd. (RHC:TSX.V) to Buy from Speculative Buy after the energy firm closed an equity financing. Watson also reported that the company announced a summer program, intending to start production this year.

"With massive optionality remaining in its acreage position and first production expected by year-end, Royal continues to stand out as a leader in the North American helium pubco space," Watson wrote.

He noted that Royal Helium generated about CA$17.3 million in gross proceeds via the upsized bought-deal equity financing, in which it issued 34.5 million units. Each unit comprised one common share and one-half warrant.

"Royal's equity raise substantially de-risks the company's path to first production," Watson wrote. The financing "affords it a high degree of flexibility to continue operations through the balance of the year."

Watson described the work that the near-producer has under way and has planned.

Moving forward, the analyst indicated, Royal Helium will simultaneously concentrate on two objectives: advancing its Climax helium project toward production and growing its helium resources through drilling and exploring its southeast Saskatchewan property. These efforts will include resuming production testing at its Climax-2 and Climax-3 wells and continuing to plan production and facility design for Climax-1, -2 and -3.

The company also is preparing to drill six new wells (it is currently budgeted for seven) in the Bengough, Griffin and Ogema blocks and is now planning that work, Watson noted. One of those wells will be Climax-4, targeting the regolith discovery encountered in Climax-3. Via Climax-4, Royal Helium aims to identify the best way to produce helium from the sizable reservoir of 2.5 billion–6.0 billion cubic feet of helium there. Climax-4 drill permitting is underway, and the company expects to spud the well by mid-July.

Cormark's target price on Royal Helium is CA$1.70 per share, and the stock is trading now at about CA$0.53 per share.

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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: Royal 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 Royal Helium, a company mentioned in this article.

Disclosures from Cormark Securities, Royal Helium Ltd., June 11, 2021

The Disclosure Statement Chart for Royal Helium can be found on the website.




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