Power Metal Resources (LON: POW) shares are up 15% this morning. POW shares have risen on the back of the discovery of a helium anomaly. This may or may not lead to anything. But what’s interesting is what we might think the presence of helium means. It could be a direct profit opportunity - maybe. Or it could be an indication of something else there that could be profitable. Maybe. Or, well, it could be just one of those things and not mean any money at all. Maybe.
Just a few years back we were all being told that helium was running out, there wan’t any more and so party balloons must be banned. Then people started to think again. The Earth’s original endowment of helium boiled off into space billions of years ago. What we’ve got now (both the nuderground stuff and the 3 ppm in the atmosphere) is the result of the radioactive breakdown of uranium and thorium. Sometimes this collects in natural gas reservoirs. So, Helium One is searching for helium where the rocks are high in Th and U. Could well work for HE1 too.
Which brings us to the Power Metals announcement: “Hyperspectral data analysis using Sentinel-2 satellite data on mineral reflectance ("Hyperspectral Analysis") conducted at Perch River has identified several helium anomalies on the Project, including the discovery of one extremely strong helium response in the centre of the Project (see figure 1). The very strong helium response could be indicative of significant buried uranium mineralisation or leakage of helium from a buried helium reservoir at depth (further detailed below).”
The hope is that this is one of two things. One is simply a reservoir of helium. That would be nice, it’s pretty easy to drill for once you know it’s there. The other is that, wll, if there’s something down there producing He then that thing is probably a large lump of uranium (thorium tends not to exist on its own). And given that POW hunts for uranium then that would be good too.
There is the third possibility which is that this is simply a seepage from something much deeper - which would not be financially interesting at all.
But the base point stands here. Helium is a breakdown result from uranium and thorium. He is valuable for itself, but also - possibly - as a guide to a nice big lump of uranium.
