RHC Royal Helium Ltd

Royal Helium Ltd. (TSXV:RHC) (OTCQB:RHCCF) ("Royal" or the "Company") is pleased to announce that it has entered into an agreement with Research Capital Corporation as the lead underwriter and sole bookrunner, on behalf of a syndicate of underwriters (collectively, the “Underwriters”), pursuant to which the Underwriters has agreed to purchase, on a bought deal basis, 66,667,000 units of the Company (the “Units”) at a price of $0.09 per Unit for aggregate gross proceeds to the Company of $6,000,030 (the "Offering").

Each Unit shall be comprised of one common share of the Company (a "Common Share") and one Common Share purchase warrant of the Company (a "Warrant"). Each Warrant shall entitle the holder thereof to purchase one Common Share at an exercise price of $0.12 per Common Share for a period of 36 months following closing of the Offering. In addition, the Company will use commercial reasonable efforts to obtain the necessary approvals to list the Warrants on the TSX Venture Exchange (“Exchange”).

The net proceeds from the Offering will be used for new high-impact drilling on the 40 Mile project in southern Alberta, development through the Saskatchewan helium corridor, completion and testing of an existing discovery at the Ogema project, working capital and general corporate purposes. See below for project details.

The Company has granted to the Underwriters an option (the “Over-Allotment Option”) to increase the size of the Offering by up to an additional number of Units, and/or the components thereof, that in aggregate would be equal to 15% of the total number of Units to be issued under the Offering, to cover over-allotments, if any, and for market stabilization purposes, exercisable at any time and from time to time up to 30 days following the closing of the Offering.

The closing of the Offering is expected to occur on or about May 1, 2024 (the “Closing”), or such other earlier or later date as the Underwriters may determine. Closing is subject to the Company receiving all necessary regulatory approvals, including the approval of the Exchange to list, on the date of Closing, the Common Shares, and the Common Shares issuable upon exercise of the Warrants and the Underwriters’ broker warrants, on the Exchange.

In connection with the Offering, the Company intends to file a prospectus supplement (the “Prospectus Supplement”) to the Company’s short form base shelf prospectus dated September 28, 2022 (the “Shelf Prospectus”) following pricing of the Offering with the securities regulatory authorities in each of the provinces and territories of Canada (except Quebec). Copies of the Shelf Prospectus and the Prospectus Supplement to be filed in connection with the Offering, can be found on SEDAR+ at www.sedarplus.ca. The Shelf Prospectus and the Prospectus Supplement will contain, important detailed information about the Company and the Offering. Prospective investors should read the Prospectus Supplement and accompanying Shelf Prospectus and the other documents the Company has filed on SEDAR+ at www.sedarplus.ca before making an investment decision.

Steveville Helium Purification Facility, Alberta: Ramping up and continuing sales

Since officially coming online at the end December 2023, Royal has delivered 9 trailers of high purity helium to its end customer in the aerospace and defence industry. As a reminder, this customer has entered into offtake agreements with Royal to purchase all of the helium volumes from this flagship facility; these two offtake agreements are at an average net sales price of approximately USD $500 per mcf or approximately CAD $700 per mcf.  Given the increasing demand for purified helium, Royal Helium anticipates a robust pricing environment for the foreseeable future. 

Royal Helium is continuing to ramp up its throughout volumes through the plant site and steadily increase the number of helium trailers leaving the plant gate and is expected to reach an optimal run rate capacity volume over the coming months. The processing facility at Steveville is being fed by highly productive Devonian horizons that will provide material cash flow to Royal through the offtake agreements that are already in place.

The Steveville plant is designed to process 15,000 mcf/day of raw gas fed by the two 100% owned helium wells at Steveville, Alberta and produce 22,000 mcf of 99.999% helium per year. The engineered life of the plant is 25 years, produces enough fuel gas to power the plant itself, and is capable of producing up to 22,000,000 pounds of commercial CO2. Royal has also recently entered into its first offtake agreement for the sale of food and beverage grade CO2 from its Steveville facility. This initial CO2 offtake agreement significantly expands the overall economics and cashflows of the plant facility with this new offtake to primarily serve markets in the Pacific Northwest Region of the United States. 

40-Mile Project, Alberta: High Impact New Appraisal Drilling

In 2023, Royal acquired its newest project area in southern Alberta. Acquired under a seismic option agreement with an independent private vendor, the 40 Mile project is comprised of 7,000 acres and boasts one historic well that was drilled, flow tested and assayed. This well flowed at exceptionally high rates during initial testing and returned helium concentrations exceeding anything that Royal has tested or produced to date.

Royal completed seismic work at 40 Mile in 2023 and has multiple seismically defined drill targets across multiple prospective zones. Royal plans to drill a high impact well on the 40 Mile project in H2 2024.

Climax/Cadillac: Core Project, Saskatchewan: Developing in the Existing Helium Fairway

The Core of Royal’s Saskatchewan lands are located within the prolific Southwestern Saskatchewan Helium fairway that features highly economic helium concentrations coupled with multiple helium purification facilities near its borders. Royals technical team has completed extensive geological and geophysical subsurface work in the Climax/Cadillac corridor and, with many new analog wells adjacently offsetting these core lands, the team has identified and selected numerous new drilling targets among these three project areas.

The amount of drilling and testing data available in the area has helped verify Royal’s subsurface model and has enabled the team to understand the different Helium play types that are found in Saskatchewan and more importantly on Royal leasehold.

Royal has several seismically defined drilling targets in the Climax/Cadillac corridor that it intends to drill in a follow-on program to the initial drilling already completed.

Ogema Project, Saskatchewan: Testing of an Already Drilled Discovery

The Ogema project in south central Saskatchewan comprises more than 60,000 acres and is home to the eastern most helium wells drilled in Saskatchewan. Drilled in 2021, Royal received helium concentration tests results of 0.60-0.70%. The Company now intends to complete and test the newly acquired rights to the Ordovician Red River formation within the wellbore with the view of making a production and plant decision, once final testing of both concentration and flow rate have been completed.

The Red River formation in south central and southeastern Saskatchewan has long been a prolific oil and gas producing formation that boasts helium prospectivity with numerous shows across the province. This formation has returned some of the highest concentrations of helium historically in Canada, with test results as high as 2.45%.

Strategic $25 Million Joint Venture and Economic Partnership with Sparrow Hawk for New Multi-well Development and Plant Construction on the Val Marie Project in Saskatchewan

As announced on April 16, 2024, Royal Helium has entered into an economic partnership with Sparrow Hawk Developments Ltd. to develop the Royal’s next core area for helium production. Under the terms of a signed Economic Participation Agreement and letter of intent, Sparrow Hawk Developments Ltd. will fund $25,000,000 into the drilling and completion of new wells (drill, test and tie-in 4 to 5 new development wells), as well as the construction of the associated helium purification facility. Pursuant to the agreement terms, Sparrow Hawk will have an approximate 57.5% non-operating working interest in the wells and an approximate 46% non-operating interest in the processing facility. The Val Marie helium project comprises a 32,000-acre, 21-year lease land package representing approximately 3% of Royal's current helium permit and lease lands across Saskatchewan and Alberta. Royal Helium will operate the newly constructed plant facility and multi-well development.

This press release is not an offer to sell or the solicitation of an offer to buy the securities in the United States or in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification or registration under the securities laws of such jurisdiction. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from U.S. registration requirements and applicable U.S. state securities laws.

About Royal Helium Ltd.

Royal Helium is an exploration, production, and infrastructure company with a primary focus on the development and production of helium and associated gases. The Company’s extensive footprint includes prospective helium permits and leases across southern Saskatchewan and southeastern Alberta. Given the current and foreseeable global undersupplied nature of this critical and non-renewable product, Royal is well positioned to be a leading North American producer of this increasingly high value commodity.

Royal Helium’s helium reservoirs are carried primarily with nitrogen. Nitrogen is not considered a greenhouse gas (GHG) and therefore the plant has a low GHG footprint when compared to plants in other jurisdictions that rely on large scale natural gas production for helium extraction. Helium extracted from wells in Saskatchewan and Alberta can be up to 90% less carbon intensive than helium extraction processes in other jurisdictions.

Andrew DavidsonPresident and Chief Executive OfficerRoyal Helium Ltd.

For more information, please contact:

For Royal Helium Ltd :Spiro KletasVP Investor Relations                                                                1 (306) 500-9397spiro@royalheliumltd.com        

Dean NawataBusiness Development1 (306) 500-9420dean@royalheliumltd.com

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This news release includes certain statements and information that constitute forward-looking information within the meaning of applicable Canadian securities laws. All statements in this news release, other than statements of historical facts are forward-looking statements. Such forward-looking statements and forward-looking information specifically include, but are not limited to, statements that relate to the completion of the Offering and the timing thereof, the use of proceeds of the Offering, the exercise by the Underwriters of the Over-Allotment Option, the timely receipt of all necessary approvals, including any requisite approval of the TSX Venture Exchange.

Statements contained in this release that are not historical facts are forward-looking statements that involve various risks and uncertainty affecting the business of the Company. Such statements can generally, but not always, be identified by words such as “expects”, “plans”, “anticipates”, “intends”, “estimates”, “forecasts”, “schedules”, “prepares”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. All statements that describe the Company’s plans relating to operations and potential strategic opportunities are forward-looking statements under applicable securities laws. These statements address future events and conditions and are reliant on assumptions made by the Company’s management, and so involve inherent risks and uncertainties, as disclosed in the Company’s periodic filings with Canadian securities regulators. As a result of these risks and uncertainties, and the assumptions underlying the forward-looking information, actual results could materially differ from those currently projected, and there is no representation by the Company that the actual results realized in the future will be the same in whole or in part as those presented herein. the Company disclaims any intent or obligation to update forward-looking statements or information except as required by law. Readers are referred to the additional information regarding the Company’s business contained in the Company’s reports filed with the securities regulatory authorities in Canada. Although the Company has attempted to identify important factors that could cause actual actions, events, or results to differ materially from those described in forward-looking statements, there may be other factors that could cause actions, events or results not to be as anticipated, estimated or intended. For more information on the Company and the risks and challenges of its business, investors should review the Company’s filings that are available at www.sedarplus.ca.

The Company provides no assurance that forward-looking statements and information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company does not undertake to update any for-ward looking statements, other than as required by law.