The junior Canadian helium stocks we’ve identified will likely be forced to adjust their strategy as helium scarcity becomes more and more of a global issue
SmallCapPower | May 16, 2019: Apart from party balloons, helium can be used for a variety of important uses, such as MRI magnets, fiber optic cables, microscopes, airbags, blimps, and computer chips. Party City announced recently that it will be closing 45 stores due to a helium shortage. The earth’s crust emits small amounts of helium, where it can be found in underground deposits, trapped in certain types of rocks (granitoid basement rocks). Most of these rocks containing helium can be found in the United States, specifically Texas, Oklahoma, and Kansas. The U.S. accounts for more than 70% of the world’s helium production. However, with the U.S. rapidly selling off its helium reserve supply, and the earth’s atmosphere losing helium faster and faster, it is inevitable that we will run out of this non-renewable resource eventually. On a brighter note, today we have identified three Canadian helium stocks that specialize in either management of helium properties or the exploration of the gas itself. These companies will be under pressure in the coming years to adjust due to the diminishing supply of helium. Look to see how these businesses alter their strategy and differentiate themselves as the depletion of the global supply of helium forces them to change.
*Share prices as at close Tuesday, May 14, 2019, data obtained from S&P Capital IQ
American Helium Inc. (TSXV:AHE) – $0.09
Oil and Gas Exploration and Production
American Helium is a Canada-based helium exploration and property development company that develops helium assets across North America. AHE explores for helium on its acreage, which covers approximately 17,000 acres. American Helium Inc generally serves the healthcare, military, nuclear, electronics, aviation, and research sectors with its helium supply. Recently, AHE stated its difficulties in raising enough capital to continue planned acquisition, exploration, and development within the helium energy sector, and has decided to exit the industry.
- Market Cap: $3.5 Million
- YTD Return: 12.5%
- Average 90 Day Trading Volume: 140,000
Royal Helium Ltd. (TSXV:RHC) – $0.015
Oil and Gas Exploration and Production
Royal Helium is a Canada-based company engaged in the exploration and evaluation of helium & other natural gas reserve properties in North America. Currently, RHC does not have any active exploration, development or production projects, and is in the process of examining business opportunities and is evaluating suitable assets or businesses to acquire or merge with.
- Market Cap: $2.3 Million
- YTD Returns: 0%
- Average 90 Day Trading Volume: 110,000
Desert Mountain Energy Corporation (TSXV:DME) – $0.18
Diversified Metals and Mining
Desert Mountain Energy is a Canada-based exploratory resource company, engaged in exploration and development of mineral and helium properties in Canada. The Company is an owner of a United States-based subsidiary named Desert Energy Corp, which is commencing exploration and development of oil & gas and mineral properties in the southwestern United States. On September 5, 2018, the Company sold its Yellowjacket Gold Project and is now focused on developing helium production. On May 13, 2019, Desert Mountain Energy announced that it had discovered helium in concentrations of 1.36% on its Oklahoma Kight-Gilcrease Property. The property is located in an area of Oklahoma which has been known to host helium-bearing gas wells, with commercial production grades ranging from 0.6% to 1.4% He.
- Market Cap: $6.6 Million
- YTD Return: -18.2%
- Average 90 Day Trading Volume: 40,000
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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