Helium One Global's Pinon Canyon Plant Approval: A Strategic Leap in a Surging Market

Helium One Global (OTCQB:HLOGF) has secured a critical milestone for its Galactica-Pegasus helium project in Colorado with the April 15, 2025, approval of a construction permit for the Pinon Canyon processing plant. This decision by Las Animas County’s Board of Commissioners marks a pivotal step toward commercializing one of the most advanced helium projects in North America, positioning the company to capitalize on a global helium market expected to double by 2035.

The Pinon Canyon Plant: A Cornerstone of Helium One’s Strategy

The plant, located near the Jackson-29 and Jackson-31 wells, is designed to process helium and carbon dioxide (CO₂) from the Galactica-Pegasus reservoir, which has demonstrated helium concentrations as high as 8.8%—a robust grade for economic extraction. The permit approval, based on rigorous environmental and operational reviews, clears the way for construction to begin immediately.

Key terms of the permit include:
- Location and Infrastructure: The site was deemed suitable due to existing road access and compatibility with surrounding land uses.
- Environmental Compliance: Blue Star Helium (ASX:BNL), the operator, agreed to repair any road damage caused by construction and operations.
- Production Timeline: First gas production is now targeted for the second quarter of 2025, with the plant processing up to 550,000 cubic feet per day of raw gas.

Helium One’s 50% working interest in the project requires it to fund up to $450,000 per well for six development wells, totaling $2.7 million. This financial commitment aligns with its broader strategy to secure a foothold in the helium supply chain, complementing its flagship Tanzanian projects, such as the Rukwa Basin, where it holds a 480km² license with helium concentrations as high as 10.4%.

The Helium Market: A Booming Opportunity

Helium’s strategic importance has never been clearer. Used in MRI machines, semiconductor manufacturing, and aerospace, the gas has seen prices surge over 400% in recent years due to supply shortages. The U.S. Department of the Interior recently designated helium as a “critical mineral,” underscoring its geopolitical and economic value.

The Galactica-Pegasus project is well-positioned to meet this demand. With stabilized flow rates projected between 350,000–450,000 cubic feet per day, the plant could supply a significant portion of the U.S. helium market, which currently imports over 40% of its needs.

Risks and Considerations

While the permit approval is a major win, investors should note several risks:
1. Operational Hurdles: Weather delays in early 2025 pushed drilling to mid-January, and further delays could impact the H1 2025 production target.
2. Commodity Pricing: Helium prices remain volatile, though long-term contracts with industrial buyers could mitigate this risk.
3. Regulatory Compliance: Ongoing oversight by Colorado’s Energy and Carbon Management Commission (ECMC) requires strict adherence to environmental standards.

Financial Outlook and Stock Performance

Helium One’s equity stake in the project could generate ~$2 million annually over five years once production begins. Its stock (HLOGF) has gained 30% year-to-date amid rising helium prices, but it remains undervalued compared to peers.

Conclusion: A Strategic Bet on Critical Infrastructure

The Pinon Canyon Plant’s approval is more than a regulatory win—it’s a strategic move to secure Helium One’s place in a high-growth market. With helium demand projected to hit 8 billion cubic feet annually by 2035 (up from 4 billion in 2020), the project’s 550,000 cubic feet per day capacity represents a meaningful contribution to global supply.

The company’s dual focus—North American development paired with African exploration—creates a robust portfolio. However, investors must weigh execution risks against the long-term upside. For those willing to navigate near-term uncertainties, Helium One’s role in a critical resource sector offers compelling growth potential. As the plant nears completion, the stakes—and the helium—couldn’t be higher.