Royal Helium and Sparrow Hawk Developments Enter Into a $25 Million Economic Partnership and LOI for Resource Development and New Facility Construction in Saskatchewan
SASKATOON, SK, April 16, 2024 /CNW/ - Royal Helium Ltd. (TSXV: RHC) (TSXV: RHC.WT.A) (OTCQB: RHCCF) ("Royal" or the "Company") and Sparrow Hawk Developments Ltd. ("Sparrow Hawk") are pleased to announce that they have entered into an Economic Participation Agreement (the "Agreement") and a letter of intent (the "LOI") for a $25,000,000 joint venture investment by Sparrow Hawk in the development of Royal's Val Marie helium project located in southwestern Saskatchewan.
Under the terms of the Agreement and the LOI, Sparrow Hawk will invest $25,000,000 into the drilling and completion of new wells, as well as the construction of the associated helium purification facility. Pursuant to the LOI terms, Sparrow Hawk will have an approximate 57.5% non-operating working interest in the wells and an approximate 46% non-operating interest in the processing facility.
Mr. Andrew Davidson, Chief Executive Officer of Royal Helium states, "This joint venture represents an exciting next step in Royal's mission to advance the development of its extensive helium resources and bring additional facilities online each year. Of equal importance, this partnership highlights Royal's commitment toward further inclusion of First Nations groups in the resource development activities and the economic growth in the province. This historical partnership with Sparrow Hawk to advance the economic development in the Treaty 4 Territory is an important first step toward these objectives. This important Agreement and LOI ensures First Nations participation at the earliest possible stage for resource development in the province with a shared commitment to economic reconciliation and benefit."
Mr. Alex Fallon, CEO of Sparrow Hawk states, "This partnership and our planned ownership in helium production plants and of the helium resource itself, is not only a form of economic reconciliation, but it also sets the path for a multimillion-dollar investment to develop Saskatchewan's helium sector and export helium to customers around the globe."
"This is a historic partnership that will provide Sparrow Hawk with ownership in a major critical minerals project and honours the spirit of Treaty 4 which was to share the resources in this land," Mr. Fallon continued.
The Val Marie helium project comprises a 32,000-acre, 21 year lease land package representing approximately 3% of Royal's current helium permit and lease lands across Saskatchewan and Alberta. Val Marie is located immediately north of the Saskatchewan-Montana border sitting atop the Bowdoin Dome, a large geological uplift system that has been a prolific natural gas production area with successful helium production wells recently drilled on the Montana side of the structure. The Company drilled its initial well at Val Marie in August of 2022 with some of Royal's highest helium showings to date from drill bit gas detection equipment from multiple stacked zones – the Duperow, Souris River and Deadwood formations.
The partnership agreement will also see Sparrow Hawk support Royal's economic reconciliation strategy:
- Sparrow Hawk and Royal will work together to advance economic reconciliation in Treaty 4 territory and seek to create employment opportunities for Peepeekisis Cree Nation and First Nations people in Saskatchewan's growing helium sector.
- Sparrow Hawk and Royal commit to partnering on future helium opportunities in Saskatchewan as and when they materialize.
- Sparrow Hawk will engage First Nation's training organizations to provide Indigenous culture training and education opportunities to Royal and its subcontractors.
- Sparrow Hawk will play a lead role in engaging other First Nation organizations and partners to work together on economic opportunities that may arise as a result of this partnership.
The Agreement and LOI are subject to final financial arrangements, provincial, regulatory and TSX Venture Exchange approvals.
Sparrow Hawk Developments Ltd., is the economic development corporation for Peepeekisis First Nation. Located in the Qu'Appelle Valley in Southern Saskatchewan, Peepeekisis First Nation is 3,148 people strong. Chief Canahhachapew (Making Ready the Bow) signed Treaty 4 on September 21, 1874. Peepeekisis, Cree: ᐲᐦᐲᑭᓰᐢ, pîhpîkisîs, literal meaning: Sparrow Hawk. More information can be found at: www.sparrowhawkdevelopments.com
Royal is an exploration, production, and infrastructure company with a primary focus on the development and production of helium and associated gases. The Company's expansive footprint includes prospective helium permits and leases across southern Saskatchewan and southeastern Alberta. Given the current and foreseeable global undersupplied nature of this critical and non-renewable product, Royal is well positioned to be a leading North American producer of this increasingly high value commodity.
Royal's helium reservoirs are carried primarily with nitrogen. Nitrogen is not considered a greenhouse gas ("GHG") and therefore has a low GHG footprint when compared to other jurisdictions that rely on large scale natural gas production for helium extraction. Helium extracted from wells in Saskatchewan and Alberta can be up to 90% less carbon intensive than helium extraction processes in other jurisdictions.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
This news release includes certain statements that may be deemed to be "forward-looking statements". All statements in this news release, other than statements of historical fact, that address events or developments that management of the Company expects, are forward-looking statements, including, the settlement and execution of the definitive agreements, financing arrangements, provincial and regulatory approvals, and the potential participation of the federal and provincial government in the joint venture and investment. Although management believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results or developments may differ materially from those in the forward-looking statements. The Company undertakes no obligation to update these forward-looking statements if management's beliefs, estimates or opinions, or other factors, should change. Factors that could cause actual results to differ materially from those in forward-looking statements, include market prices, exploration and development successes, continued availability of capital and financing, and general economic, market or business conditions. Please see the public filings of the Company at www.sedarplus.com for further information.
SOURCE Royal Helium Ltd.
please contact: For Royal Helium Ltd : Spiro Kletas, VP Investor Relations, 1 (306) 500-9397, [email protected]; Dean Nawata, Business Development, 1 (306) 500-9420, [email protected]; For Sparrow Hawk: Alex Fallon, President and CEO, Sparrow Hawk Developments, 1 (306) 250-8505, [email protected]
Share this article