A helium plant. Source: Reuters
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  • Renergen (RLT) facilitates its first helium forward sale agreement for 100,000 units over 19 years
  • Each unit represents a thousand standard cubic feet of helium at nearly 100 per cent purity and will be delivered to Argonon Helium US in liquid form
  • The transaction will see a potential prefunded helium sale of up to $33 million, if Argonon agrees to go through with the purchase
  • Renergen shares were up 8.87 per cent, trading at $2.21 at 10:30 am AEDT

Renergen has facilitated its first helium forward sale agreement of 100,000 units over a period of nineteen years.

A deal has been penned with Argonon Helium US in Delaware, which will see helium at more than 99.99 per cent purity in liquid form delivered to the company. As a frame of reference, one unit weighs 4.7 kilograms and comprises 37.5 litres when in liquid form.

The potential sale could accumulate up to US$25 million (around A$) over the course of the agreement and is intended to facilitate the creation of a liquid spot market for helium, accessible to all investors through the Argonon platform.

“Whilst 100,000 units is less than 0.1% of the global helium market over the term of our contract, we believe this transaction is a ground-breaking step in bringing helium to the financial markets and will pave the way for its inclusion into more mainstream commodities,” CEO of Argonon Richard Charrington said.

Renergen said it will use a portion of the funds from pre-sale to accelerate Phase II drilling at its Virginia Gas Project.

Argonon is set to take possession of the units once they are paid for, however they will be under no obligation to complete the purchase.  

Following the forward sale of the first 100,000 units of helium, both parties agreed any future sales between them will be priced according to the spot market of helium, minus Argonon’s trading margin, and will be available to Argonon until the expiry of the Virginia Gas Project’s license in September 2042.

“Like with so many other commodities, it will start small and is likely to be traded by those who have researched it and understand the future potential with emerging technologies such as quantum computing and in time, may become much more mainstream in similar way lithium did several years ago,” Mr Charrington said.

Renergen shares were up 8.87 per cent, trading at $2.21 at 10:30 am AEDT.

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