Source: Stephane Foucaud
October 24, 2023 (Investorideas.com Newswire) The newly signed lease affords the energy firm exclusive rights to nonhydrocarbon gases over 1,049 net acres, noted an Auctus Advisors report.
Pulsar Helium Inc. (PLSR:TSX.V) signed a lease affording it mineral rights within a 6.2-mile radius of its Topaz project in Minnesota, more than doubling its net acres there, reported Auctus Advisors analyst Stephane Foucaud in an October 18 research note.
"Additional acreage could increase the size of the prize," Foucaud commented.
291% Investment Gain
Based on the news, relayed Foucaud, Auctus reiterated its CA$0.90 per share target price on the British Columbia-based energy company. Its share price now is about CA$0.23.
The difference between these two prices implies a compelling return for investors in Pulsar of 291%.
Terms of the Lease
Foucaud reviewed the specifics of the new mineral rights lease. It gives Pulsar exclusive rights to nonhydrocarbon gases over 2,840 gross acres, or 1,049 net acres. Further, Pulsar has the option to acquire the rights to another 2,092 net acres.
The initial lease term is 20 years, but it may be extended up to 40.
For the lease, Pulsar will pay the private owner US$11,000 in cash plus a 3% royalty on production.
Greater Helium Potential
Foucaud pointed out that the additional acres covered in the new lease could translate to increased helium resources at the project.
Currently, the unrisked best estimate of prospective resources is about 3,000,000 cubic feet (3 Mmcf) of helium. The unrisked high estimate of prospective resources is about 76 Mmcf of helium.
"We estimate the unrisked net asset value of 100 Mmcf of helium at about CA$0.65 per share," added the analyst.
Pulsar intends to have a new resource report prepared after drilling is completed, Foucaud noted.
Second Area Expansion
In other news, Foucaud reported Pulsar significantly expanded the area covered by the license for its Tunu helium project in Greenland to 2,816 square kilometers, an addition of 45 square kilometers.
Now, the area encompasses Kap Tobin, a former settlement, where 0.8% helium, 97% nitrogen, and 2% argon were returned on sampling in 2021 of the thermal springs.
"This area is also expected to be able to cogenerate power and heat," wrote Foucaud.
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