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

Simon Mugo trader
Updated 16 Apr 2021

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Helium One logo

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.

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.

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading