Calgary, Alberta, June 28, 2022 – Helium Evolution Incorporated (TSXV:HEVI) (“HEVI” or the “Company“), a Canadian-based helium exploration and production company focused on developing assets in southern Saskatchewan, is pleased to announce that our first helium well, HEI 06-12-006-05W3M (“HEI-1”), was spud on June 25, 2022 at the Company’s 100% owned and operated McCord property in southern Saskatchewan, described in more detail below. In addition, further to our news release dated June 9, 2022, the Company has closed our non–brokered, brokered and strategic investor private placements raising aggregate gross proceeds of $6,918,200 through the issuance of 17,295,500 total units (“Units”) at $0.40 per Unit.

First Well Spud at McCord Property

Drilling of HEI-1 is expected to take approximately 15 days from the spud date to reach total depth of approximately 2,670 metres targeting the Deadwood formation. The HEI-1 well location targets a structural high, a geological characteristic typically associated with high concentrations of helium, and was selected based on detailed geological and geophysical seismic interpretation of the Deadwood formation. Offsetting wells have been drilled in the immediate area by other operators.

“Spudding our first well at McCord is another significant milestone for HEVI.  The HEI-1 drill represents one of six locations already identified on the McCord property in our inaugural 2022 drilling campaign,” said Greg Robb, President & CEO of HEVI. “Our drilling program is a critical step in successfully proving up our acreage at McCord and supporting our broader commercialization plans. As a result of our farmout agreement, HEVI’s program will be complemented by North American Helium Inc. (“NAH“) drilling five, 100% funded wells across other land blocks in HEVI’s portfolio, with the view to validating the prospective nature of our overall helium land base.”

Once drilling concludes, the HEI-1 well will be completed over a 14-day period, during which the Company will conduct flow testing. Preliminary results from the flow test are anticipated by the end of July, with further wells expected to be drilled predicated on the success of HEI-1. Since the spring of 2022, HEVI has also been advancing the engineering and design required for processing facilities while also engaging in discussions to secure an offtake agreement.

Farmout Agreement with North American Helium Inc.

As announced on June 9th, the Company has entered into a farmout agreement with NAH pursuant to which NAH will drill a total of five wells, incurring 100% of the drill expenditures, on three predetermined blocks of land in Saskatchewan comprising approximately 2.3 million acres located west of the third meridian (the “Blocks”). For each well drilled, NAH will earn an 80% operated interest in the section on which the well was drilled plus nine contiguous sections of land adjoining to the well, up to a maximum of 32,000 acres. The farmout agreement specifically excludes HEVI’s current drilling focus in the McCord area. The Company will retain a 20% working interest in the earned lands and each successful well drilled by NAH (the “HEVI Working Interest“).

NAH must notify HEVI of its five drilling targets within six months following the execution date of the Farmout Agreement, with a requirement to drill all five wells within 24 months. NAH must drill one well in each of the three Blocks, with no more than three wells drilled in any given Block.

In connection with the entering into of the farmout agreement, HEVI and NAH have entered into a standstill agreement pursuant to which NAH will be subject to certain standstill restrictions relating to, among other things, the acquisition of HEVI securities for a 24-month period following completion of the Offerings (as defined herein). In addition, HEVI and NAH have entered into a pro rata participation and board nomination agreement pursuant to which NAH will be permitted to maintain its pro rata undiluted percentage of HEVI Common Shares following completion of the Offering for a 24-month period. Furthermore, should NAH’s ownership reach over 10% in the next two years, NAH will have a right to appoint a nominee to the HEVI board of directors.

Private Placement

Pursuant to the Offering, HEVI issued: (i) 8,750,000 Units to NAH for total gross proceeds of $3,500,000 (the “Strategic Investor Private Placement”); (ii) 3,175,500 Units via a non-brokered private placement for gross proceeds of $1,270,200 (the “Non-Brokered Private Placement”); and (iii) 5,370,000 Units via a brokered private placement with Peters & Co. Limited (“Peters & Co.” or the “Agent“) acting as sole bookrunner, for gross proceeds of $2,148,000 (the “Brokered Offering” and combined with the Strategic Investor Private Placement and Non-Brokered Private Placement, the “Offerings”).

Each Unit is comprised of one common share of HEVI (“Common Share“) and one third of one Common Share purchase warrant (each whole warrant, a “Warrant”) with each whole Warrant entitling the holder thereof to purchase one Common Share of the Company at a price of $0.70 at any time on or before the date which is 24 months from today (the “Expiry Date”).  If the 30-day volume weighted average trading price of the Common Shares on the TSX Venture Exchange (the “TSXV“) is at or above $1.20 per Common Share, the Company may accelerate the Expiry Date by giving notice thereof to the holders of the Warrants, and in such case the Expiry Date will be the day that is 30 calendar days after the date on which such notice is given by the Company. Notwithstanding any of the foregoing, the Expiry Date will be no less than six months from today.

All Common Shares (including any Common Shares issuable on exercise of the Warrants) and Warrants issued under the Offerings are subject to a hold period expiring four months and one day from closing in accordance with applicable securities laws.

Pursuant to the Offerings, a total of 17,295,500 Common Shares and 5,765,152 Warrants were issued to subscribers.  In connection with the Offerings, the Company paid commissions and finders fees totalling $349,960.  In addition, the Company issued 175,000 Warrants to a finder in connection with the Strategic Investor Private Placement.

The net proceeds of the Offerings will be used to fund HEVI’s obligations with respect to the HEVI Working Interest (as defined below), including with respect to drilling and facilities, the ongoing drilling and development capital expenditure program of the Company and for general corporate purposes.

Certain directors and officers of the Company (the “Related Parties“) subscribed for an aggregate of 2,130,000 Units pursuant to the Non-Brokered Private Placement, with such subscriptions constituting, in each case, a “related party transaction” under Multilateral Instrument 61-101 – Protection of Minority Securityholders in Special Transactions (“MI 61-101“). The Company intends to rely on the exemptions from the valuation and the minority approval requirements of MI 61-101 provided for in subsections 5.5(a) and 5.7(1)(a) of MI 61-101, respectively, as the fair market value of the subject matter of, and the consideration paid in the Offerings, in relation to the Related Parties, does not represent more than 25% of the Company’s market capitalization, as determined in accordance with MI 61-101. The participation by each of the Related Parties in the Offerings has been approved by directors of the Company who are independent with respect to such transactions. The Company did not file a material change report more than 21 days before the expected closing of the Offerings, as the details of the Offerings were not finalized until immediately prior to the closing and the Company wished to close the transaction as soon as practicable for sound business reasons.

About Helium Evolution Incorporated

Helium Evolution is a Canadian-based helium exploration and production company holding the largest helium land rights position in North America among publicly-traded companies, focused on developing assets in southern Saskatchewan. The Company has over five million acres of land under permit near proven discoveries of economic helium concentrations which will support scaling the exploration and development efforts across its land base. HEVI’s management and board are executing a differentiated strategy to become a leading supplier of sustainably-produced helium for the growing global helium market, offering a compelling opportunity for investors.

For further information, please contact:

Greg Robb, President & CEO
Ryan Tomlinson, CFO
Phone: 1-587-330-2459
Cindy Gray, Investor Relations  |  403-705-5076


Statement Regarding Forward-Looking Information

This news release contains statements that constitute “forward-looking statements.” Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements, or developments in the industry to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements.  Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “potential” and similar expressions, or that events or conditions “will,” “would,” “may,” “could” or “should” occur.

Forward-looking statements in this document include statements regarding the Company’s expectations regarding the Company’s drilling plans, timing for completion of the HEI-1 well, the arrangements with NAH pursuant to the farmout agreement, the use of proceeds from the Offering and other statements that are not historical facts.  By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors and risks include, among others:  the Company may reallocate the proceeds of the Offering for reasons that management believes are in the Company’s best interests; the Company may choose to defer, accelerate or abandon its drilling plans; the Company and NAH may determine to amend the farmout agreement; new laws or regulations and/or unforeseen events could adversely affect the Company’s business and results of operations; stock markets have experienced volatility that often has been unrelated to the performance of companies and such volatility may adversely affect the price of the Company’s securities regardless of its operating performance risks generally associated with the exploration for and production of resources; the uncertainty of estimates and projections relating to expenses;  constraint in the availability of services; commodity price and exchange rate fluctuations; the current COVID-19 pandemic; adverse weather or break-up conditions; and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. 

When relying on forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and risks and other uncertainties and potential events.  The Company has assumed that the material factors referred to in the previous paragraphs will not cause such forward-looking statements and information to differ materially from actual results or events.  However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.  The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release.  The Company does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

This press release is not for distribution to U.S. news services or for dissemination in the United States.  This press release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. 

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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