Helium and gas hopeful D3 Energy (ASX:D3E) will light up the ASX boards on Monday (13 May 2024) following the completion of its $10 million initial public offering (IPO).
The company will begin trading at 11am AEST with around 79.5 million shares on issue and a market capitalisation of just under $16 million based on the IPO issue price of $0.20.
D3 Energy owns an 86.77% interest in Motuoane Energy, a company incorporated in South Africa which holds the permits comprising the D3 Project, which already has a best estimate (2C) contingent helium resource of 22.5 billion cubic feet.
Under the Motuoane acquisition agreement, D3 will move to full ownership of the project with the company now having been admitted to the Official List.
Funds raised from the IPO will be used to explore and develop the D3 Project as well as fund general working capital.
There are very few helium explorers on the ASX with the likes of Noble Helium (ASX:NHE), Blue Star Helium (ASX:BNL) and Grand Gulf Energy (ASX:GGE).
While most associate helium with balloons, its unreactive nature means it is ideal for making fibre optics and semiconductors and for arc welding. It is also used to detect leaks, such as in car air-conditioning systems and because it diffuses quickly it is used to inflate car airbags after impact.
The majority of helium supply comes as a by-product of natural gas production.
According to a November 2023 market report by AKAP Energy, the annual helium market amounts to around 6 billion cubic feet.
AKAP estimates the market is worth around US$3 billion per annum based on global average traded helium prices of US$500 per thousand cubic feet.
However, AKAP says based on end user pricing it is likely a three to four times bigger market.
At the same time the market is likely to remain undersupplied for the next few years which will support helium prices.
Write to Angela East at Mining.com.au
Images: D3 Energy
