Blue Star cashed up for helium drilling in Colorado

Special Report: Blue Star Helium (ASX:BNL) is picking up the pace as it raises $6m for its planned drilling program and acquires additional ground in Colorado.

The company has received firm commitments from sophisticated and professional investors for a $6m share placement priced at 3.5c per share.

Proceeds will be used for the planned helium drilling program of between three to five wells, further material lease acquisitions and for working capital.

Managing director Joanne Kendrick is pleased with the support from investors.

“We have an incredibly busy schedule and this placement ensures we are funded to focus on delivering strategic leasing acquisitions and our maiden drilling campaign,” she added.

Blue Star has also acquired an additional 6,720 net acres, taking its total helium prospective landholding in Las Animas, Colorado, up to 182,000 gross (127,000 net) acres.

“These additional leases further advance our overall portfolio of prospects and leads in the Lyons Formation helium play, which has been proven in the area by the historical Model Dome field,” Kendrick noted.

blue star helium leases — Blue Star Helium lease position. Pic: Supplied

Helium exploration

Helium is a high-value commodity that is vital in a number of modern technology applications such as MRI, nuclear medicine, rocketry and space exploration.

Despite being the second most abundant element in the universe, its comparatively rarity on Earth means helium is traditionally a low concentration by-product of natural gas production. Blue Star is targeting high helium concentration accumulations on its acreage.

Both the Enterprise and Galileo prospect are located within a fairway proven by the Model Dome helium field, which produced gas with grades of up to 8 per cent helium before it was acquired by the federal government for its strategic reserve.

Blue Star recently expanded its drilling program from a single hole targeting the Enterprise prospect into a program of at least three wells and up to five wells to test several other prospects.

This article was developed in collaboration with Blue Star Helium, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.