Helium Producers Hoping for New Discoveries - U.S. Reserves Drastically Shrinking

publication date: Nov 21, 2018
author/source: Rare Earth Exploration

Helium is known to be the second most common element and second lightest gas in the universe. While there is plenty of it available in rocks on the Moon, here on Earth it is a rare to find it in economically feasible quantities. Enormous amounts of helium lost has been blamed on waste. Recently, helium has been placed on the US's list of minerals which are critical to economic and national security, and already sits on a similar list compiled by the EU. As a relatively difficult element to produce, store and recycle, helium is big business for leading companies that can meet the world's growing demand.

Holbrook Basin Could Be Brought Back To Life

Rare Earth Exploration announced the Holbrook Basin exploration venture to undertake an exploration drill program in Arizona. The Holbrook Basin has been a well-established helium production district with two of the world's richest historic producing helium gas fields, the Pinta Dome and the Navajo Springs located in the region. Arizona's original helium discovery was in 1927 and named Great Basin Oil #1. This discovery is approximately 4 miles Southwest of Holbrook and 14 miles East of Helopolis in the Holbrook Basin. The concentration level reported gas flow of 1.12% helium back in 1927.

According to Rare Earth Exploration's recent press release, the concentrations of gas in the Holbrook Basin range from trace amounts up to 10%. The industry benchmark for commercial grade helium range from concentration levels of 0.3% to 1%. The potentially high concentration levels and the rich nature of the area has some saying "Arizona is the Saudi Arabia of helium".

Helium also represents one of the safest assets on the international plane. One of the world's other leading helium-producing nations, Qatar was subject to a boycott by Arab neighbors which removed the equivalent of approximately 25% of global demand from the helium market.

Clearly, other major global alternatives suffer from far less geopolitical stability. Here again, Rare Earth Exploration takes the edge on its international competitors, with a focus solely on helium production in Arizona where the business and investment environment is significantly more stable. In fact, of five leading global producers, two are experiences decreasing output whilst the second-largest in Qatar cannot offer stability to the global markets.

Like the helium markets in general, Helium has gone under-analysed and under-appreciated to date, despite having assets due to enter production and facing competitors who are struggling to supply. The upside of this is that Rare Earth Exploration offers a well-timed investment opportunity in the commodity markets.

Helium Proves Critical in New Technologies

Helium already has many well established industrial uses, such as in healthcare for cooling the superconducting magnets in MRI and other machines, in breathing equipment used in diving to prevent nitrogen narcosis or "the bends", and in the aerospace and aircraft industries.

However, now the element also looks set to play a critical role in many emerging and future technologies, from quantum computing to potential use in nuclear fusion, and at the pinnacle of modern physics research in particle accelerators such as the Large Hadron Collider in Switzerland.

Google's Project Loon's "Balloon Powered Internet for Everyone" Helium filled balloons delivered internet to 100,000 people in Puerto Rico after Hurricane Maria. Netflix runs on Helioseal technology using HGST helium filled drives. In fact, Netflix increased capacity by 50%, while reducing energy usage by 23%.

As an inert element, meaning that it is nonreactive, helium can be combined with other components without causing a chemical reaction. The element also has an ultra-low boiling point, almost at the temperature of absolute zero, and an extremely light atomic weight.

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