Why Did Noble Helium Raise $14 Million for the Mbelele Appraisal & Testing Program?

Noble Helium Limited (ASX:NHE), a prominent player in the helium production industry, has recently achieved a significant milestone by securing firm commitments from institutional, sophisticated, and accredited investors for a fundraise of $14 million AUD (before costs). The company plans to allocate these funds towards advancing its Mbelele program, which encompasses critical appraisal and testing activities at its North Rukwa Helium Project, located in Tanzania, with operations expected to commence in the third quarter of 2023.

A Strategic Move for Noble Helium

The successful placement of 107,692,308 million fully paid ordinary shares at an issue price of $0. 13 each marks a crucial development for Noble Helium. The placement has been well-received, reflecting the confidence of investors in the company's potential and strategic vision.

Noble Helium's Chief Executive and Co-founder, Mr. Justyn Wood, expressed his enthusiasm regarding this achievement and stated, "The two wells at Mbelele have confirmed that the North Rukwa is a unique and prolific helium producing province.

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With this funding, we will now move as quickly as possible to appraise and test both the crestal gas cap identified and the deeper sections of Mbelele-2, which has been cased and suspended ready for a flow test and as a potential future producing well. "

Mbelele Program: Unlocking the Potential

The North Rukwa Helium Project in Tanzania has been the focus of Noble Helium's exploration efforts. This recent funding injection will enable the company to further explore and assess the potential of the North Rukwa region as a prominent helium-producing province. The project aims to capitalize on the helium reserves identified in this region.

The Mbelele program, an integral part of Noble Helium's strategic objectives, involves critical appraisal and testing activities. These activities include evaluating the crestal gas cap and the deeper sections of Mbelele-2, which has already been cased and suspended, making it ready for a flow test and potential future production.

Simultaneously, the company is advancing its commercial negotiations to secure a leased plant and offtake agreement, a pivotal step towards realizing its helium production goals. These negotiations align with the company's long-term vision to become a significant player in the helium industry.

Placement Details: Structuring Growth

The successful placement of shares, totaling 107,692,308 at an issue price of $0. 13, will be carried out in two tranches. Participants in the placement will also be entitled to one-for-one options exercisable at $0. 20, reflecting a 54% premium over the placement price and carrying a two-year term.

The structure of the placement is as follows:

Tranche 1: 53,824,029 Placement Shares will be issued within the company's placement capacity under Listing Rule 7. 1.

Tranche 2: The company plans to seek shareholder approval at its next general meeting, expected in January 2024, for the issuance of the remaining 53,868,279 Placement Shares and the 107,692,308 Placement Options. A notice of meeting will be dispatched accordingly.

Notably, the directors of Noble Helium, including Mr. Wood, Mr. Scott, and Mr. Columbus, have collectively subscribed for 7,292,308 Placement Shares under this placement, demonstrating their commitment to the company's growth and potential.

A Strategically Priced Placement

The issue price of $0. 13 represents a 23. 5% discount compared to the last trading price of $0. 17 on December 7, 2023. Furthermore, it reflects a 36% discount concerning the 15-day volume-weighted average price of the company's shares traded on the ASX, which stood at $0. 203.

Key Appointments and Fees

Wilsons Corporate Finance Limited and MST Financial Services Pty Ltd have been appointed as joint lead managers of the placement, responsible for overseeing the process. The joint lead managers will receive a fee of 6% (plus GST) of the gross proceeds raised under the placement, reinforcing their commitment to facilitating the success of Noble Helium's funding initiative.

Noble Helium's successful fundraise of $14 million marks a significant step forward in advancing its ambitious Mbelele program. The company's strategic initiatives, combined with the financial support of investors, position it favorably to explore and capitalize on the helium potential of the North Rukwa Helium Project, further solidifying its presence in the helium production industry. Noble Helium continues to make strides in achieving its vision of becoming a significant contributor to the helium market.

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