Company Interview / Noble Helium tapping into ballooning demand

Noble Helium (ASX:NHE) is addressing the global demand for a carbon-free, geopolitically independent helium source. Shaun Scott CEO of Noble Helium (ASX:NHE) reveals they are actively exploring Tanzania's unique geology, aiming for early monetisation through shallow drilling over the next few months.

Shaun states that helium is essential for various industries, including semiconductor manufacturing, aerospace, and MRI machines. Recent geopolitical events have curtailed Russia's helium supply, making alternatives like Tanzania more viable and increasing global interest.

Shaun highlights that Tanzania's geology makes it a prolific helium source, with up to 18% helium in some wells. Noble Helium aims to secure funding to further explore and monetise these significant helium reserves.

Full unedited transcript:

0:00

Noble helium is answering the world's growing need for a primary, ideally carbon free and geopolitically independent source of helium. MD and CEO Sean Scott joins me now. Sean, great to have you with us on AWS vs. What are you doing here?

0:14

Uh, fantastic. We're obviously actively exploring up in Tanzania, which is an incredibly unique geology for for helium and actually been known about for quite a long time. A lot of helium readings coming out of hot springs all over the place, but really only the last sort of 8 to 10 years where the helium market's really turned around and prices have gone up dramatically, that people have started to explore. And, uh, fortunately for us, we've got a massive first mover advantage, uh, have our foot on a what we think is the all the best acreage up in Tanzania. And, um, we're in the process now of, uh, about to drill some, some shallow, uh, exploration wells over the next few months. Um, on our way, hopefully to some early, uh, monetization strategy and then chasing some much bigger, deeper targets on the on the eastern side of the basin. Yeah. So what are the next steps after you start? Um, these I guess, digs and looking for some of these significant developments.

1:10

Yeah. So the process that we're following at the moment is, well, we drilled a couple of exploration wells last year. One of them encountered a, uh, a shallow gas cap, um, that we, we kind of weren't expecting, actually, but, uh, but we found that. And then, uh, whether there was one, we expected there'd be more. So we've been been looking for more and we found another eight sort of structures. We're kind of in the process of going through and grading those to identify, uh, five of them that that we're going to drill in the next couple of months. Um, once we once we do that and I guess the, uh, the theory of that is to flow test it, see if we've got commercial flows. Uh, we definitely know there's helium there. There's plenty of helium in this, in this system. Um, and then we've got a company we've been engaged with who are very keen to buy the helium office, and so we'll move down a path to try and develop and monetize that. And as I say, then we'll move on to explore some of the other areas of that basin where there are some much bigger but but deeper and

2:10

and more expensive to access targets. So, Sean, can you just explain to us why there's such a need for this ideally carbon free, geopolitically independent source of helium for the globe?

2:22

Yeah. So I guess I guess you've touched on sort of three elements. Uh, one is the need for helium. So, so helium actually is an incredibly important industrial gas. Uh, and it's used in a whole range of applications and things that I guess most of us probably wouldn't even think about. Uh, so it's it's an integral part of the process for etching wafers that make semiconductors. Uh, and it's, uh, multiple components of helium that are important in that process. So it's very hard, if not impossible to substitute. Um, it's used in, uh, aerospace. So rocket launches are purging fuel systems. And then when the rockets are in flight, it's, uh, used to keep the fuel tank in equilibrium. And again, it's multiple properties of helium that are important for that process. It's a small molecule. It's inert. So there's no fire risks. Uh, it's got a very, very low, uh, freezing point, uh, etc.. Um, MRI

3:22

machines. Uh, well, the previous speaker talked a bit about AI and other stuff going on there, but you're never going to get away from the, the need for, for those machines. Anything with superconducting magnets that's used to cool those, uh, and a whole bunch of other things that are, that are pretty important, I mean, fundamentally underpins the global, uh, communications network. Um, yeah. And and those things are all growing, you know, as we know, AI using lots more chips and so on. Uh, then in terms of the diversification perspective, um, I guess what's happened recently is that, uh Russia were due to come into the market to take about 25% of the world's, um, helium supply. And and obviously with the events that have occurred in Russia, initially they blew the plan up, but then, um, invading the Ukraine, etc.. So there's created a whole bunch of embargoes on, on their helium. So that's created a bunch of shortages. But I think what else it's done is that in our discussions with all the industrial gas

4:22

companies, uh, they're then saying, well, we need to look for other supplies that are in safer jurisdictions. And Tanzania certainly fits the criteria there. So I mean, the third sorry, Sean, are you sort of just on the precipice of finding some more discoveries as well? Because I've read that you could actually potentially have the largest helium resource in the world.

4:43

Yeah. So the, the, um, you know, this is a greenfield exploration. So we're starting sort of from scratch. Um, but all of the evidence so far is that this is a prolific helium producing system, and you need certain things to be in place for that to happen. So helium is created through the radioactive decay of uranium and thorium in the crust. Um, uranium has a 4 billion year half life. So obviously you need crust. That's that's that's the right age to build up an inventory of helium. And then the second thing that you need, and what we have in Tanzania that makes it unique, is that it's then caught up in what's called the East African Rift system. So it's an active geological, uh, phenomenon that's happening right now, that's creating all of that old crust and breaking it up and releasing that inventory of helium out into the surrounding geology, which is much younger, uh, and high potential reservoir geology. So we know that we have all of those things in place, uh, the wells we've drilled and other wells that other people have drilled, hot springs, etc.,

5:42

all have very, very high, uh, levels of helium, up to 18% has been registered, which is just phenomenal. You know, the commercial cutoff in the US is about 0.3 of a percent. So these are just globally significant Um, and now it's just a really a matter of working our way through the process of, um, exploring this space and understanding it more, working out where the helium is going to be trapped, um, and which we think we know now, uh, and then, you know, finding the, the funding to, to go and do the drilling to explore it. And how confident are you of getting that funding shown?

6:20

Uh, yeah. Well, I think that, um, you know, as I say, the, the, the need for helium is, uh, is significant. And so, you know, it currently sells like a long, long term wholesale contract. Price is 450 US an MCF, uh, which compares to, say, gas in the US in Henry Hubbs is 2 or $3. Um, so, you know, the price signal is very, very, very strong. Uh, the need for it is very, very strong. Um, and so I think that, you know, there's there's definitely a great economic case to, uh, to put funding towards trying to discover this because the payback, the return could be very, very significant.