Advanced Analysis Free Trading Signals Real Time Alerts
Practice Stock Trading Your capital is at risk

Helium One Shares Plunge 14.1% After Raising £10M via a Discounted Share Issue

Updated: 16 Apr 2021

Shares of Helium One Global Ltd (LON: HE1) plunged 14.2% after the company revealed that it had raised £10 million via a discounted share placement, pricing each share at 10p (a 15% discount to yesterday’s closing price) in an oversubscribed offering.

The primary helium mining company said that it would use the fundraising proceeds to fast-track its Rukwa project in Tanzania by deploying appraisal equipment to the field to start the appraisal process once the drilling programme is completed.

The helium miner also plans to conduct seismic studies on any discoveries uncovered during the drilling process to maximise the conversion to reserves. The company intends to complete the appraisal process by the end of this year.

new-recommended-broker-banner

Helium One’s CEO, David Minchin, said, “The response that we have seen during this oversubscribed fundraise endorses the confidence that we feel in our assets and planned exploration drilling campaign, as well as giving financial support necessary to contract all appraisal work to avoid downtime between any discovery and economic evaluation.”

The fundraising also attracted significant interest from institutional investors who expressed confidence in the company and its aggressive exploration and drilling plans.

The Latest share placement was led by the company’s joint brokers Cannacord Genuity and Potterhouse Capital, with Cannacord being appointed as a joint broker in March this year. At the time, the miner said that the broker would give it access to more institutional investors.

Helium One’s Rukwa project is one of the largest natural helium deposits globally. The company expects to earn over $95 million annually from the project once mining operations are set up.

The project also has very minimal operational costs once the initial setup is completed, which means that its operating margins will be much higher than its peers.

Helium One share price.

IG chart of Helium One share price 16-04-2021

Helium One shares plunged 14.11% to trade at 10.35p, falling from yesterday’s closing price of 12.05p.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage . 68 % of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money .