Avanti Helium shares experienced a significant increase on Thursday morning following the announcement of a new agreement. The Toronto-listed helium exploration and development company has signed a midstream agreement with IACX Resources Montana, a subsidiary of IACX Energy, to develop a helium recovery plant. This plant will be responsible for processing the raw gas from Avanti’s Sweetgrass helium pool in Montana.
Shares of Avanti Helium were trading nearly 17% higher at 77 Canadian cents (58 cents) at 9:52 a.m. ET.
Under the agreement, IACX will be tasked with building, financing, and operating the helium recovery plant on-site near the Sweetgrass pool. Initially, the plant is expected to process 10 million cubic feet of raw gas per day, but it has the potential to increase production to 15 million cubic feet per day. Avanti anticipates that production will begin in early Q1 of next year.
As part of the agreement, Avanti will pay a monthly fee for seven years, with the option to renew annually for the lifespan of the pools.
This new partnership is a significant step for Avanti as they continue to expand their helium operations. By developing this helium recovery plant, they can maximize the potential of their Sweetgrass helium pool and contribute to the increasing global demand for helium.