Pulsar Helium (TSXV:PLSR) - Building America's Primary Helium Supply

Pulsar Helium: Project Topaz – A Deep Dive into Helium Supply & Helium-3 Potential

Key Concepts:

• Primary Helium Resource: Geological reservoirs containing helium as the primary commodity, unlike helium extracted as a byproduct of natural gas.
• Helium-3 (³He): A rare isotope of helium with applications in quantum computing, fusion energy, and border security.
• Cryogenic Distillation: A process used to separate gases by liquefying them at extremely low temperatures.
• Resource vs. Reserve: Resource refers to the total estimated amount of helium present, while reserve refers to the economically viable portion that can be extracted.
• Flow Testing & Pressure Buildup Analysis: Methods used to assess the productivity and connectivity of a helium well.
• Seismic Surveys: Geophysical techniques used to image subsurface geological structures.

1. Helium Market Dynamics & Pulsar Helium’s Strategy

The interview centers on Pulsar Helium and its Topaz project in Minnesota, near the Canadian border, aiming to address the persistent helium shortages experienced over the past 15 years, particularly in the US – the largest helium market. Helium’s critical role in high-tech industries like semiconductor manufacturing (computer chips for space launch), fiber optic cables, and medical technology (MRI scanners) drives demand. However, current supply is constrained as helium is primarily a byproduct of natural gas production, offering limited flexibility. Pulsar Helium differentiates itself by focusing on primary helium resources – standalone geological reservoirs containing concentrated helium. The company’s mission is to bring stability to the helium supply chain, offering a secure source independent of geopolitical factors and logistical challenges associated with transporting liquid helium (which experiences leakage over time – approximately 4 weeks for overseas shipments).

2. The Topaz Project: Discovery & Initial Results (2024-2025)

Significant progress was made in 2025 following an initial discovery in late 2024. Key achievements include:

• Well Deepening & Appraisal: Deepening an initial well revealed additional gas zones at greater depths. A nearby appraisal well (a second well) also confirmed helium presence.
• Flow Rates & Concentration: Wells demonstrated good natural flow rates (helium rising to the surface without fracking) and high helium concentrations (8-10%).
• Multi-Product Potential: The gas stream contains potential for three marketable products: helium, helium-3, and CO2 (approximately 85% of the raw gas could be marketed).
• Helium-3 Discovery: The announcement of helium-3 presence in the gas stream generated significant market interest.

3. Helium-3: A Game-Changing Opportunity

The discovery of helium-3 is a pivotal aspect of the Topaz project. Helium-3 is exceptionally rare and valuable ($18.5 million per kilogram). Current sources are limited to byproducts of nuclear weapons maintenance and certain nuclear reactors, making supply opaque. Helium-3 is crucial for:

• Quantum Computing: Its unique properties enable optimal performance at near-absolute zero temperatures.
• Fusion Energy: A potential fuel source for future fusion reactors.
• Border Security: Used in detectors to identify radioactive devices.

Pulsar Helium’s potential to offer a credible alternative to sourcing helium-3 from the moon (currently being funded by US and Chinese governments) is a major differentiator. The company is actively researching methods to separate helium-3 from helium-4 at a commercial scale, as existing separation techniques are only proven at a laboratory level.

4. US Government Interest & Strategic Implications

The US government’s interest in securing helium supply is highlighted, particularly in light of the closure of the federal helium facility (previously a “flywheel” in the system) following privatization. Stakeholders like the American Hospitals Association are urging the government to regain control over helium supply. The potential for domestic helium-3 production is also of significant interest due to its strategic applications. The interview suggests the possibility of government stockpiling or long-term supply agreements with companies like Pulsar Helium.

5. Market Positioning & Pricing

Pulsar Helium anticipates commanding a premium for its US-based helium production due to the security of supply it offers, mitigating logistical challenges and geopolitical risks associated with imports from Qatar, Algeria, and Russia. While the helium market is somewhat opaque due to long-term confidential contracts, recent contract announcements indicate a willingness to pay a premium for secure supply.

6. 2026 Work Program & Timeline

Pulsar Helium’s 2026 work program focuses on:

• Continued Drilling: Drilling is ongoing (currently on hole number six) and expected to continue until early April.
• Flow Testing & Pressure Analysis: Comprehensive testing of the drilled wells to determine flow rates, pressure decline curves, and gas composition.
• Resource Update: Updating the resource estimate based on the new well data (expected around June/July). The current resource estimate is based on data from only half of the first well.
• Economic Study: Developing a detailed economic model for the project, leveraging ongoing work with Chart Industries to design gas processing facilities. This study will be released later in the year.
• Land Acquisition: Pursuing additional land packages with geological potential, leveraging insights gained from the Topaz project.

7. Geological Understanding & Scalability

Pulsar Helium is actively building its understanding of the Topaz reservoir through:

• Gas Sampling: Analyzing gas samples at different stages of well production.
• Pressure Communication Analysis: Monitoring pressure changes in nearby wells to assess reservoir connectivity.
• Seismic Surveys: Utilizing seismic data to map subsurface geological structures.
• Downhole Logging: Employing various logging tools to characterize the reservoir’s properties.
• Independent Verification: Engaging independent third-party experts for resource verification.

The company is observing multiple stacked gas horizons and increasing pressure with depth, suggesting a potentially large and scalable system. Recent step-out wells (drilled further from the initial well) have intersected gas zones in predicted locations, improving the accuracy of their geological model.

8. Financial Position & Capital Access

Pulsar Helium is in a strong financial position, having benefited from:

• Warrant Exercises: Exercising existing warrants by major shareholders.
• Cost-Effective Drilling: Achieving value for money in drilling operations.
• Project Finance Facility: Securing a $4 million project finance facility from a US investor.

9. Notable Quotes:

• Thomas Abraham James: “Our main project is the Topaz project in Minnesota, certainly at the Canadian border. And really with the helium, it's a commodity we never really knew that we relied on.”
• Thomas Abraham James: “We could potentially offer a credible alternative to the moon [for Helium-3]. I would like to think that Minnesota could be more reasonably priced and slightly less capital intensive.”
• Thomas Abraham James: “What they [end users] can’t stomach is lack of security of supply and so that’s why I think a premium is possible.”

Conclusion:

Pulsar Helium is strategically positioned to capitalize on the growing demand for helium and, crucially, helium-3. The Topaz project demonstrates significant potential, with promising initial results and a clear path forward. The company’s focus on a primary helium resource, coupled with its discovery of helium-3, differentiates it from competitors and attracts significant investor and government interest. The next six months will be critical, with ongoing drilling, testing, and resource updates expected to provide a more comprehensive understanding of the project’s scale and economic viability. The company’s strong financial position and proactive approach to capital access position it well for continued growth and success.