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March 16, 2024

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Avanti Energy to become Avanti Helium (AVN.V)

Avanti Energy to become Avanti Helium (AVN.V)

Avanti Energy (AVN.V), a Canadian gas explorer focused on helium extraction, announced today that it would knock down its current nameplate, to become Avanti Helium.

According to the press release, the name swap is meant to better reflect the company’s focus on the exploration, development, and production of helium.

This change will not impact Avanti’s share structure or the rights of the company’s shareholders, so no action is required.

Avanti’s new name is still subject to regulatory approval.

The company, operating in western Canada and the U.S., has a prospective land package covering approximately 77,000 acres in Alberta and Montana known as the Greater Knappen. It also has the Leader area in SW Saskatchewan which contains three helium exploration permits for a total of approximately 63,000 acres.

Avanti has drilled two wells to date in the Greater Knappen which has culminated in a major helium discovery. The completion results of the Cambrian Flathead formation yielded over 4MMcf/d total gas with 1.1% helium and 97.5% nitrogen.

Recent analyst coverage conducted by Beacon Securities gave Avanti a SPEC BUY rating with a target price of $3.80 CAD per share.

Analysts at Beacon commented further, “The McDaniel’s resource report is a huge step for AVN to move from a discovery to reserves at WNG where that property may have as much as $2.80/FD share of value at a US$1,500/mcf He price. It also allows AVN to properly plan its facilities. We maintain our $3.80 target price, which is derived from an 8.5x EV/EBITDA multiple of our 2023 forecasts, and our Spec Buy rating.”

Helium is the second-lightest and second most abundant element in the universe, but it is still pretty rate on earth and is integral to the production of semiconductors and is used in cryogenic coolant defense and energy research. There is growing helium use in nuclear power generation plants, metal works and medicine. In most cases, it cannot be substituted.

The global helium market is currently estimated at $2.3 billion USD and is expected to climb to $2.8 billion in 2026 at a CAGR of 4.3%.

Avanti currently trades at $1.01 per share for a market cap of $58.79 million.

Avanti Helium Stock Chart YTD 08-12-22

–Gaalen Engen

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