Disclosure: Pulsar Helium Inc. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Subsequent to Q3-FY2024, the company raised $6.5M; currently pursuing a $7.5M equity financing
Price Performance (1-year)
Went public on the TSXV in 2023, and listed on the AIM in 2024. Two projects in untapped helium exploration districts
Minnesota, which has no history of gas production, recently enacted helium-specific legislation allowing production to begin in 2025, following PLSR’s helium discovery at Topaz. The law also authorizes the issuance of leases for helium exploration and production on state lands
PLSR is the first company to obtain a license for helium exploration in Greenland
Helium is classified as a critical raw material by both the EU and Canada. Helium was added to the U.S. critical minerals list in 2018 but removed in 2021, as domestic production is sufficient to meet the country’s needs
Helium: A Primer
Helium possesses unique properties, including a low boiling point, low density, low solubility, high thermal conductivity, and inertness, making it valuable across a wide range of sectors. These include electronics (fiber optics and semiconductors), energy (nuclear fission and fusion), medical technology (MRI scanners and assisted breathing), aerospace (rocket purging and leak detection), computing (data centers and quantum computing), and industrial applications (welding and leak testing
It is estimated that global demand will grow from 6.1 Bcf in 2023, to 8.1 Bcf by 2030, reflecting a CAGR of 6.6%, primarily driven by rising demand from the healthcare, semiconductor, and electronics industries
According to the USGS, Qatar has the largest helium resource (25% of global supply), followed by the U.S. (21%). Global helium production is dominated by the U.S. (43%), and Qatar (41%)
Global production has been declining by 2-3% annually as major natural gas fields near depletion. This, coupled with international sanctions on Russia, a significant helium producer, following the invasion of Ukraine, has further tightened global supply
Driven by rising demand and limited projected supply, the helium market is anticipated to experience a significant shortfall later in the decade. Over 90% of helium is produced as a low-grade by-product of natural gas production
While most global helium supply is derived from natural gas, Saskatchewan stands out as one of the few regions extracting helium directly from dedicated wells. This direct extraction method, which Pulsar is targeting, bypasses the natural gas production process, offering a more efficient and targeted approach to helium production. Helium is often shipped as a liquid to distribution centers, and sold as bulk liquid helium, or gasified and compressed into tanks or small cylinders for delivery to end users.
Helium prices are up 400%+ in the past two decades, and 18% p.a. in the past five years. Helium prices are challenging to track since the commodity is not publicly traded, with pricing largely set through offtake contracts between producers and consumers. Current contracts are priced at $500-$600/mcf
Topaz Helium Project (Minnesota, U.S.) – 100% interest
Although Minnesota has no history of gas/helium production, it is the largest producer of iron ore in the U.S. The Topaz helium project, covering 4,181 acres, is within 5 miles of Cleveland-Cliffs’ Northshore iron ore mine in northeastern Minnesota, the largest iron ore mine in North America. We note that one of the advantages of the Topaz project is its proximity to existing infrastructure, and skilled workforce in the region
PLSR gained control of the project in 2021. Located near the Voyageur Highway that leads to Duluth (125 km), and Minneapolis (380 km). Excellent infrastructure in place, including road access, grid power, and a skilled workforce
PLSR has applied for state land leases to expand its land package. Flow testing recorded up to 821 mcf per day, with concentrations between 7.9% and 14.5%
Following the discovery of high-grade helium at Topaz, Minnesota enacted legislation to allow leases for helium exploration and production on state lands, a significant change from the previous limitation to privately held mineral rights.
Based on the first well, PLSR delineated a high-grade, small-resource of 0.4 Bcf helium, and 2.9 Bcf CO2
Mineralization and Resources
The property was initially explored for nickel until helium-rich gas was accidentally encountered in 2011. In February 2024, PLSR drilled its first dedicated helium well, Jetstream #1, reaching a total depth of 671 m. Helium and associated gases flowed naturally to the surface, with no water present. The absence of water is advantageous for processing, suggesting potential for low OPEX. Jetstream #1 yielded up to 14.5% helium, the highest in North America; concentrations above 0.3% helium are generally considered economic.
Geophysical results indicate the potential for gas accumulation directly beneath the maiden well, and within a 3-mile radius. Management plans to deepen the Jetstream #1 well by another 500 m to test the full height of the reservoir, and initiate a step-out drilling program to expand the current resource envelope.
Geophysics has identified an anomaly measuring 3.5 km long, 1 km wide, and 0.5 km deep, with typical target depths for helium deposits in North America reaching up to 2.5 km. PLSR’s maiden resource accounts for only 13% of its land position
Plans to drill two step-out wells to target promising geological anomalies. Anticipating a resource update, and a PEA in the coming weeks
Tunu Helium-Hydrogen Project (Greenland) – 100% interest
The 2,816 km2 property is situated on the east coast of Greenland in Liverpool Land, a peninsula which faces the main European continent. PLSR has exclusive rights to all mineral resources, except hydrocarbons and radioactive elements. The project area hosts some of the oldest granitic rocks on the planet, which is an excellent source for helium.
PLSR gained control of the project in 2021. Close proximity to Aarhus, Denmark, allowing shorter route access to European markets
Located 5 km from the Ittoqqortoormiit settlement, and 40 km from the Nerlerit Inaat International airport, which services planes from Greenland and Iceland
Management highlights strong local community relationships, which were essential for securing the exploration license. Past exploration included geophysics, magnetics, electromagnetic, and thermal hot spring sampling, which revealed helium
In 2022, PLSR’s sampling and gas analysis identified helium content of up to 0.8%. An ambient noise tomography (passive seismic) survey was conducted in 2024, with interpretation pending
Management and Directors
Management, board, and institutions own 49%. Four out of seven directors are independent
Brief biographies of the management team and board members, as provided by the company, follow:
Neil Herbert – Chairman
Mr. Herbert brings over 30 years of finance experience, with a notable track record in advancing natural resource companies to development or acquisition. As Finance Director of UraMin Inc., he played a key role in raising US$400M in equity and facilitating its US$2.5B sale in 2007. His past and present directorships include Pasofino Gold Ltd, Polo Resources Limited, Helium Global Ltd, and Atlantic Lithium Ltd. Mr. Herbert is a fellow of the Association of Chartered Certified Accountants.
Thomas Abraham - James – President & CEO
Mr. Abraham – James is a seasoned geologist with 17 years of experience specializing in the discovery and development of primary helium projects across North America, Africa, and Europe. He has pioneered helium exploration methodologies, co-authoring several publications, including the “The Principles of Helium Exploration”. He is a Fellow of the Australasian Institute of Mining and Metallurgy, the Geological Society of London (FSL), and the Society for Economic Geologists (FSEG).
Daniel O’Brien – CFO & Executive Director
Mr. O’Brien is a member of the Institute of Chartered Professional Accountants of B.C. He is the President of Golden Oak and is also CFO for a number of private and publicly listed exploration companies trading on the TSXV. Mr. O’Brien was previously senior manager at a leading Canadian accounting firm.
Doris Meyer – Independent Director
Ms. Meyer is an experienced mining industry professional having held directorship positions with several mineral exploration companies. She founded Golden Oak. Ms. Meyer is also a director of several publicly listed exploration companies including Sun Peak Metals Corp., Azarga Metals Corp., and North Shore Uranium Ltd.
Jón Ferrier – Independent Director
Mr. Ferrier is a seasoned geologist with over three decades of experience in the oil, gas, and mining sectors. His extensive international career spans technical, commercial, and various managerial and leadership roles. Formerly the CEO of Gulf Keystone Petroleum Limited, Mr. Ferrier has also held positions at blue-chip companies such as Anglo American Pls, Maersk Oil, ConocoPhillips, Paladin Resources Plc., and Petro-Canada/Suncor.
Brice Laurent – Independent Director
Mr. Laurent is a co-founder of ABCapital, a multi-family office and alternative asset manager based in Amsterdam. In early 2024, after completing a private placement in Pulsar, he joined the company’s board to support the management team with his capital markets experience. Mr. Laurent also serves on the boards of SkyNRG, a global leader in sustainable aviation fuel distribution and production, and Splitser, one of Europe’s leading group financial management apps with over four million users.
Geoffrey Crow – Independent Director
Mr. Crow is a financial services professional with over 35 years of experience in the natural resources sector, spanning investment, fundraising, and board responsibilities. He is on the boards of Lake Resource N.L., Todd River Resources Ltd., Non-Executive Director of Atlantic Lithium Ltd., and Chairman of Ricca Resources Ltd. which have projects across Australia, Africa, and South America.
Subsequent to Q3-FY2024, the company raised $6.5M, and listed its shares on the AIM. Currently pursuing a $7.5M equity financing. In-the-money options and warrants can bring C$11M
Our preliminary DCF model returned a fair value of C$1.25/share for the Topaz project. Our inputs are based on the work completed to date, as well as comparable helium projects
In our review of comparable helium juniors, we observed that MCAP is more closely tied to grades than to the delineated resource estimate
The average enterprise value per grade of juniors is C$2,455, while PLSR is trading at C$929, a 63% discount. Applying the sector average, we estimate a comparables valuation of C$1.66/share for the Topaz project
Based on the average of our DCF and comparables valuation, we arrived at a fair value estimate of C$1.57/share on PLSR
We are initiating coverage with a BUY rating, and a fair value estimate of C$1.57/share. PLSR is an early-stage helium junior, with a high-grade discovery in Minnesota. With a significant supply deficit expected later this decade, and a strong management team, we believe PLSR presents a compelling opportunity within the emerging helium market. The company's upcoming drilling program, and the planned PEA, are key catalysts to watch.
We believe the company is exposed to the following key risks:
We are assigning a risk rating of 5 (Highly Speculative)
