1 00:00:03,990 --> 00:00:07,410 Sean Aylmer: Welcome to the Fear and Greed business interview. I'm Sean Aylmer. 2 00:00:07,560 --> 00:00:09,959 Sean Aylmer: Some of my favourite interviews are the ones where I 3 00:00:09,960 --> 00:00:12,898 Sean Aylmer: know very little about the subject because I'm guaranteed to 4 00:00:12,900 --> 00:00:15,929 Sean Aylmer: learn something. I'm afraid that today fits into that category. 5 00:00:15,929 --> 00:00:18,419 Sean Aylmer: I'm not afraid, I'm looking forward to it. Helium is 6 00:00:18,450 --> 00:00:23,280 Sean Aylmer: often listed alongside lithium and cobalt as an energy transition commodity. 7 00:00:23,460 --> 00:00:25,770 Sean Aylmer: One of the commodities we'll be hearing a lot more 8 00:00:25,770 --> 00:00:29,670 Sean Aylmer: about as we shift to greener energy sources and broader electrification. 9 00:00:29,940 --> 00:00:33,540 Sean Aylmer: Trent Spry is the managing director and CEO of ASX 10 00:00:33,540 --> 00:00:36,990 Sean Aylmer: listed Blue Star Helium. Trent, welcome to Fear and Greed. 11 00:00:37,830 --> 00:00:39,300 Trent Spry: Thank you, Sean. Thank you very much. 12 00:00:39,720 --> 00:00:41,970 Sean Aylmer: Let's start with the very basics for people like me, 13 00:00:41,970 --> 00:00:45,300 Sean Aylmer: Trent. Why is helium so important right now? 14 00:00:46,740 --> 00:00:50,519 Trent Spry: It's incredibly important for the high-tech community and high-tech industries 15 00:00:50,519 --> 00:00:52,559 Trent Spry: at the moment. That's what a lot of people don't realize. 16 00:00:52,799 --> 00:00:56,010 Trent Spry: It's a lot more than just balloons and lifting. It 17 00:00:56,010 --> 00:00:59,520 Trent Spry: does have very unique characteristics, physically and chemically. So you've got, 18 00:00:59,580 --> 00:01:05,099 Trent Spry: it's non-toxic, non-flammable, low density, chemically and radioactively inert. It 19 00:01:05,099 --> 00:01:10,049 Trent Spry: stays liquid at minus 269 degrees Celsius. High thermal conductivity. 20 00:01:10,049 --> 00:01:12,569 Trent Spry: It's lighter than air as we all know, and it's 21 00:01:12,569 --> 00:01:16,860 Trent Spry: very small. It actually cannot be manufactured artificially, and there's 22 00:01:16,860 --> 00:01:20,789 Trent Spry: actually no substitute for its key applications. So it's incredibly valuable. 23 00:01:21,450 --> 00:01:23,459 Sean Aylmer: Okay. So a couple of questions out of that. How 24 00:01:23,459 --> 00:01:26,399 Sean Aylmer: is it extracted and what are the key applications? So 25 00:01:26,400 --> 00:01:27,690 Sean Aylmer: let's start with how it's extracted. 26 00:01:28,199 --> 00:01:31,440 Trent Spry: Yeah, it's extracted a lot like normal gas exploration. We 27 00:01:31,440 --> 00:01:34,709 Trent Spry: do find it as a gas in the subsurface. That 28 00:01:34,709 --> 00:01:39,119 Trent Spry: said, it does require a certain geologic conditions. It is 29 00:01:39,120 --> 00:01:42,990 Trent Spry: not generated like hydrocarbon. It's generated from the radioactive decay 30 00:01:42,990 --> 00:01:45,929 Trent Spry: of uranium and thorium in granite rich rocks. And 'cause 31 00:01:45,929 --> 00:01:48,270 Trent Spry: of its small size, we need a really good seal 32 00:01:48,270 --> 00:01:50,580 Trent Spry: on top of it, usually with salt and hydro and 33 00:01:50,580 --> 00:01:53,760 Trent Spry: really dense shale. So other than that, it's extracted the 34 00:01:53,760 --> 00:01:56,550 Trent Spry: same way. We do polish it from the small percentages 35 00:01:56,550 --> 00:01:58,500 Trent Spry: we can find. Ours is some of the highest in 36 00:01:58,500 --> 00:02:01,469 Trent Spry: the world at 8%, but we polish that onsite up 37 00:02:01,469 --> 00:02:04,020 Trent Spry: to 98% before we sell it, and that's really the 38 00:02:04,020 --> 00:02:05,430 Trent Spry: only difference to natural gas. 39 00:02:06,029 --> 00:02:07,950 Sean Aylmer: Okay. Sorry. Polish it. What's that? What are you doing 40 00:02:07,950 --> 00:02:08,820 Sean Aylmer: when you're polishing it? 41 00:02:09,090 --> 00:02:11,609 Trent Spry: Sorry. It's a bit of a technical term in the industry, 42 00:02:11,610 --> 00:02:14,280 Trent Spry: but we're essentially concentrating it. So the raw gas comes 43 00:02:14,280 --> 00:02:16,440 Trent Spry: out with about 8% helium in it, and then we 44 00:02:16,440 --> 00:02:17,461 Trent Spry: concentrate that to 98%. 45 00:02:17,461 --> 00:02:22,410 Sean Aylmer: Okay. And is there much helium around the world? 46 00:02:22,949 --> 00:02:24,930 Trent Spry: There's not a lot really. I mean, a lot of 47 00:02:24,930 --> 00:02:28,709 Trent Spry: it comes from... it's a byproduct of LNG production from 48 00:02:28,800 --> 00:02:31,980 Trent Spry: large global gas supplies. But what we're looking for is 49 00:02:31,980 --> 00:02:34,799 Trent Spry: the pure or the primary helium concentrations, and that's less 50 00:02:34,800 --> 00:02:36,030 Trent Spry: than 10% in the world. 51 00:02:36,060 --> 00:02:38,999 Sean Aylmer: Okay. So what's it used for? 52 00:02:39,990 --> 00:02:43,110 Trent Spry: So it's used for things in the healthcare industry, in 53 00:02:43,110 --> 00:02:48,750 Trent Spry: the electronics and semiconductors, aerospace, aircraft, defense, advanced science, and 54 00:02:48,750 --> 00:02:52,469 Trent Spry: all the renewable low carbon tech. So it's in cryogenics 55 00:02:52,469 --> 00:02:57,030 Trent Spry: and MRI machines. It's electronics, fiber optics, semiconductors, which is 56 00:02:57,030 --> 00:03:00,029 Trent Spry: a huge use case at the moment. It's obviously used 57 00:03:00,029 --> 00:03:03,900 Trent Spry: for pressuring, purging, lifting, breathing, and welding as well. But 58 00:03:04,440 --> 00:03:09,240 Trent Spry: most significantly, recently, the electronics sector, the fiber optics, semiconductor 59 00:03:09,480 --> 00:03:14,669 Trent Spry: industry, has overtaken or surpassed the cryogenics and the MRIs, to 60 00:03:14,669 --> 00:03:16,829 Trent Spry: be the largest use in the world. So that's now 61 00:03:16,829 --> 00:03:19,440 Trent Spry: about 25% and it's growing rapidly. 62 00:03:20,400 --> 00:03:25,560 Sean Aylmer: Okay. So presumably then, if we are going to have 63 00:03:25,560 --> 00:03:28,859 Sean Aylmer: a greener future and they're the sort of use cases 64 00:03:28,860 --> 00:03:31,740 Sean Aylmer: for helium, we're going to need more of it? 65 00:03:32,700 --> 00:03:37,170 Trent Spry: Exactly right. Exactly right. The demand is growing constantly, not 66 00:03:37,199 --> 00:03:40,170 Trent Spry: just with the traditional uses like the cryogenics and the MRI, 67 00:03:40,170 --> 00:03:44,280 Trent Spry: but especially those sort of high-tech industries. And that includes 68 00:03:44,280 --> 00:03:49,230 Trent Spry: not just the semiconductors and the renewable technologies, but also rocketry, 69 00:03:49,230 --> 00:03:51,689 Trent Spry: which we're seeing a lot more activity in as well, 70 00:03:51,960 --> 00:03:53,309 Trent Spry: a lot more satellites being launched. 71 00:03:53,820 --> 00:03:55,680 Sean Aylmer: Stay with me, Trent. We'll be back in a minute. 72 00:04:02,190 --> 00:04:05,700 Sean Aylmer: I'm speaking to Trent Spry, managing director and CEO of 73 00:04:05,700 --> 00:04:10,260 Sean Aylmer: Blue Star Helium. Okay. I'm scared of this next question 74 00:04:10,260 --> 00:04:11,729 Sean Aylmer: because I'm going to regret it as soon as I 75 00:04:11,730 --> 00:04:14,070 Sean Aylmer: ask it, but I'm going to. Let's just take fiber 76 00:04:14,070 --> 00:04:17,339 Sean Aylmer: optic cable, right? So I understand fiber optic cable, I 77 00:04:17,339 --> 00:04:21,839 Sean Aylmer: understand the need for that, it's commonplace technology. Where's helium 78 00:04:21,839 --> 00:04:24,570 Sean Aylmer: used in fiber optics, for example? I'm just really trying 79 00:04:24,570 --> 00:04:27,209 Sean Aylmer: to get my head into how helium's used. 80 00:04:27,928 --> 00:04:30,928 Trent Spry: So you can imagine to get their fiber optics, the 81 00:04:30,930 --> 00:04:33,750 Trent Spry: quality that they are, you need a very inert, very 82 00:04:33,810 --> 00:04:36,510 Trent Spry: sterile environment, and you need to be able to pressurise 83 00:04:36,510 --> 00:04:40,589 Trent Spry: and purge through that and to sort of etch into 84 00:04:40,589 --> 00:04:43,799 Trent Spry: those things. So it's used as an atmospheric control, but 85 00:04:43,799 --> 00:04:46,349 Trent Spry: also as part of the process, the formation. 86 00:04:46,678 --> 00:04:50,190 Sean Aylmer: Okay, I get it. So with that in mind, how 87 00:04:50,190 --> 00:04:52,380 Sean Aylmer: big is the helium market going to get, Trent? 88 00:04:53,400 --> 00:04:56,849 Trent Spry: It's forecast to continue to grow about 2 to 6%. And 89 00:04:56,849 --> 00:04:59,849 Trent Spry: they're sort of saying in 2025, it's going to be about 90 00:05:00,450 --> 00:05:01,860 Trent Spry: 8 billion globally. 91 00:05:02,070 --> 00:05:02,849 Sean Aylmer: Right. So what's the measurement, $8 billion? 92 00:05:02,849 --> 00:05:06,089 Trent Spry: $ 8 billion. Sorry. Yes. 93 00:05:06,150 --> 00:05:09,120 Sean Aylmer: Yeah. Okay. Where's Australia fit into this then? 94 00:05:09,600 --> 00:05:13,260 Trent Spry: Well, Australia's interesting. It did have, or it does have, 95 00:05:13,380 --> 00:05:16,859 Trent Spry: a BOC sort of Linde (BOC Ltd (British Oxygen Company) is an industrial gas company, now a part of Linde plc, a German multinational chemical company) plant in Darwin, which used 96 00:05:16,860 --> 00:05:19,920 Trent Spry: to produce about sort of 3% of the helium in 97 00:05:19,920 --> 00:05:22,890 Trent Spry: the world. But that's come to an end now with 98 00:05:22,949 --> 00:05:27,000 Trent Spry: the raw gas from Bayu-Undan (field in the Timor Sea), essentially that production being over. 99 00:05:27,330 --> 00:05:29,880 Trent Spry: So that plant is not utilised at this stage. So 100 00:05:30,300 --> 00:05:33,539 Trent Spry: there would be some opportunities to bring some helium from 101 00:05:33,540 --> 00:05:35,700 Trent Spry: Australia up to that plant, and I'm sure there's a few 102 00:05:35,700 --> 00:05:36,600 Trent Spry: people looking at that. 103 00:05:37,290 --> 00:05:40,589 Sean Aylmer: Okay. And then Blue Star, where does that sit into 104 00:05:40,589 --> 00:05:44,339 Sean Aylmer: the Australian environment? But also you've recently done a deal 105 00:05:44,339 --> 00:05:48,060 Sean Aylmer: with US midstream provider, IACX Energy. How does that fit 106 00:05:48,060 --> 00:05:50,370 Sean Aylmer: in as well? So tell me about your company. 107 00:05:50,670 --> 00:05:53,609 Trent Spry: Yeah. So Blue Star is actually ASX listed. We were one 108 00:05:53,610 --> 00:05:56,639 Trent Spry: of the first helium companies on the ASX. All of 109 00:05:56,639 --> 00:05:59,730 Trent Spry: our assets actually are in the US. So we're an 110 00:05:59,730 --> 00:06:02,250 Trent Spry: Australian company, but we explore there. And the reason for 111 00:06:02,250 --> 00:06:05,279 Trent Spry: that was we hunted the geology we needed for the 112 00:06:05,279 --> 00:06:09,029 Trent Spry: high margin plays. We wanted gas without any hydrocarbons, and 113 00:06:09,029 --> 00:06:11,130 Trent Spry: we wanted some of the highest concentrations in the world, 114 00:06:11,130 --> 00:06:14,248 Trent Spry: and we found that geology in the US. It was 115 00:06:14,250 --> 00:06:18,690 Trent Spry: also my old stomping ground from previous companies as well. So that's 116 00:06:18,960 --> 00:06:21,270 Trent Spry: why we are there in the US. And we have 117 00:06:21,270 --> 00:06:24,450 Trent Spry: found an area in Las Animas County, which is in 118 00:06:24,450 --> 00:06:27,450 Trent Spry: southeast Colorado on the border of New Mexico, with some 119 00:06:27,450 --> 00:06:29,849 Trent Spry: of the highest concentrations in the world. There's an analog 120 00:06:29,849 --> 00:06:34,379 Trent Spry: field that we have leases around, which was producing in 121 00:06:34,379 --> 00:06:38,100 Trent Spry: the 1920s and 1930s, was then shut down and acquired strategically by 122 00:06:38,100 --> 00:06:41,640 Trent Spry: the US government. They had around 8% helium, and that's 123 00:06:41,970 --> 00:06:45,539 Trent Spry: one of the highest concentrations you'll see. So since then 124 00:06:45,540 --> 00:06:49,529 Trent Spry: we went out, very strategically leased a huge amount of 125 00:06:49,710 --> 00:06:54,270 Trent Spry: acreage there, 300,000 gross acres. We've had multiple discoveries in our 2020, 2021, 126 00:06:54,270 --> 00:06:58,859 Trent Spry: 2022 campaign. We're bringing two of those into production soon. 127 00:06:58,860 --> 00:07:01,200 Trent Spry: So Voyager is the first one that you just mentioned 128 00:07:01,589 --> 00:07:05,370 Trent Spry: where we'd signed a deal with IACX Energy. And the benefit 129 00:07:05,370 --> 00:07:09,270 Trent Spry: of that is IACX is very experienced. They will actually construct, 130 00:07:09,420 --> 00:07:11,580 Trent Spry: own and operate the plant for us. So there's no 131 00:07:11,910 --> 00:07:16,200 Trent Spry: capex associated with fabrication of that plant for us. We simply pay them 132 00:07:16,200 --> 00:07:19,650 Trent Spry: a monthly fee to enrich our helium gas, which we're 133 00:07:19,650 --> 00:07:22,889 Trent Spry: hoping will be 8% up to about 98% for sale. 134 00:07:24,150 --> 00:07:26,939 Sean Aylmer: Okay. So IACX is doing the enrichment part of it. 135 00:07:26,940 --> 00:07:29,459 Sean Aylmer: So you're doing the extraction, they're doing the enrichment, and 136 00:07:29,459 --> 00:07:33,450 Sean Aylmer: then you're selling it. Who are the buyers? I mean, so I get 137 00:07:33,450 --> 00:07:36,180 Sean Aylmer: the uses of it, who are the buyers of helium? 138 00:07:37,170 --> 00:07:42,029 Trent Spry: So they range from industrial gas companies, welding companies, balloon companies, 139 00:07:42,090 --> 00:07:46,590 Trent Spry: right through to SpaceX, NASA, GE. You have the mid- 140 00:07:46,590 --> 00:07:50,970 Trent Spry: tier or the mid-stream companies like Air Liquide, Linde that 141 00:07:51,330 --> 00:07:53,580 Trent Spry: would like to buy and then resell as well. The 142 00:07:53,580 --> 00:07:57,119 Trent Spry: market is changing and we are seeing a lot more 143 00:07:57,120 --> 00:08:02,249 Trent Spry: direct off takes to say GE or NASA or SpaceX 144 00:08:02,280 --> 00:08:05,939 Trent Spry: or some traditional sort of lifting companies. 145 00:08:06,360 --> 00:08:08,610 Sean Aylmer: Okay. Trent, so I'm giving the Dorothy Dixie here, and 146 00:08:08,610 --> 00:08:11,460 Sean Aylmer: I'm just reminding listeners, we are not an investment podcast. 147 00:08:11,460 --> 00:08:16,170 Sean Aylmer: So certainly before making any investment decisions, seek personal advice, 148 00:08:16,380 --> 00:08:19,530 Sean Aylmer: seek personal financial advice. Having said that, Trent, what is 149 00:08:19,530 --> 00:08:21,990 Sean Aylmer: it about Blue Star Helium that makes you so confident? 150 00:08:22,289 --> 00:08:24,750 Sean Aylmer: You're the CEO of the company, obviously. What is it 151 00:08:24,750 --> 00:08:27,240 Sean Aylmer: about the strategy? Where are we going with Blue Star? 152 00:08:28,380 --> 00:08:31,260 Trent Spry: Well, like I said, we strategically leased, very early on 153 00:08:31,260 --> 00:08:35,490 Trent Spry: before there was any activity here, we acquired 300,000 gross acres, which 154 00:08:35,490 --> 00:08:40,500 Trent Spry: is a huge portfolio. We then went around in 2021, 2022, 155 00:08:40,590 --> 00:08:44,520 Trent Spry: and had a very successful exploration program. Voyager was the 156 00:08:44,520 --> 00:08:45,929 Trent Spry: first one, and that's the one that we're going to 157 00:08:45,929 --> 00:08:49,170 Trent Spry: bring into production later this year. But we also had 158 00:08:49,170 --> 00:08:52,650 Trent Spry: discoveries over our Galactica and Pegasus projects, which we'll bringing 159 00:08:52,650 --> 00:08:58,080 Trent Spry: onto production in 2024. So it's significantly de- risked. We've 160 00:08:58,080 --> 00:09:01,740 Trent Spry: got three fields that will be coming into production, but 161 00:09:01,740 --> 00:09:04,828 Trent Spry: we also have a very large exploration portfolio that we're 162 00:09:04,830 --> 00:09:07,290 Trent Spry: refining this year and that we will get on and 163 00:09:07,590 --> 00:09:10,500 Trent Spry: drill again next year. And we've proven that we can 164 00:09:10,500 --> 00:09:13,139 Trent Spry: explore and find these, and by the end of the year, 165 00:09:13,139 --> 00:09:15,030 Trent Spry: we'll have proven that we can bring them onto production 166 00:09:15,030 --> 00:09:15,929 Trent Spry: and sales as well. 167 00:09:15,958 --> 00:09:19,020 Sean Aylmer: Okay. So revenue will start this financial year? 168 00:09:19,559 --> 00:09:22,679 Trent Spry: It'll start this financial year and it'll ramp up from there. 169 00:09:23,370 --> 00:09:25,890 Sean Aylmer: So what are your projections in terms of revenues and 170 00:09:25,890 --> 00:09:27,600 Sean Aylmer: when do you think you'll become profitable? 171 00:09:28,710 --> 00:09:31,860 Trent Spry: Good question. We are an exploration company, so profitable is 172 00:09:31,860 --> 00:09:37,439 Trent Spry: an interesting word for us. But we can't technically give forecasts. 173 00:09:37,440 --> 00:09:41,070 Trent Spry: But in the last announcement, people will notice that, at 174 00:09:41,070 --> 00:09:45,120 Trent Spry: full capacity, this plant will produce 38 million cubic feet 175 00:09:45,120 --> 00:09:47,940 Trent Spry: of helium a year net to us. We also put 176 00:09:47,940 --> 00:09:52,230 Trent Spry: out there that the all- in opex to achieve that is 177 00:09:52,230 --> 00:09:58,020 Trent Spry: between $100 and $120 per MCF, that's a thousand cubic feet. And 178 00:09:58,020 --> 00:10:05,100 Trent Spry: we also see prices for that gas being between $450 and $750 MCF. So, 179 00:10:06,300 --> 00:10:09,179 Trent Spry: just to put it in context, that 38 million at 180 00:10:09,179 --> 00:10:14,460 Trent Spry: full capacity is 38,000 MCF. So there's a few numbers 181 00:10:14,460 --> 00:10:16,439 Trent Spry: there that people can crunch, but... 182 00:10:16,530 --> 00:10:19,320 Sean Aylmer: But the margins, the margins look okay. 183 00:10:19,650 --> 00:10:20,760 Trent Spry: Yeah, they look pretty good. 184 00:10:22,410 --> 00:10:25,290 Sean Aylmer: All right, Trent, well, good luck. When you get interviewed by people, 185 00:10:25,290 --> 00:10:27,809 Sean Aylmer: do you spend a lot of time explaining helium to them, 186 00:10:27,809 --> 00:10:29,728 Sean Aylmer: or most people know a lot more about it than 187 00:10:29,729 --> 00:10:29,939 Sean Aylmer: I do? 188 00:10:30,359 --> 00:10:33,840 Trent Spry: No, no, no, no. It's always the starting point. It's either 189 00:10:34,380 --> 00:10:36,210 Trent Spry: squeaky voices or balloons. 190 00:10:36,780 --> 00:10:40,200 Sean Aylmer: Fair enough. Well, I'm going to think about helium in 191 00:10:40,200 --> 00:10:42,149 Sean Aylmer: a very different way as a result of this chat. 192 00:10:42,300 --> 00:10:43,831 Sean Aylmer: Thank you, Trent, for talking to Fear and Greed. 193 00:10:43,831 --> 00:10:45,449 Trent Spry: Brilliant. Thank you, Sean. 194 00:10:45,780 --> 00:10:49,049 Sean Aylmer: That was Trent Spry, managing director and chief executive officer 195 00:10:49,049 --> 00:10:53,069 Sean Aylmer: of ASX listed Blue Star Helium. This is Fear and 196 00:10:53,070 --> 00:10:55,500 Sean Aylmer: Greed business interview. Remember, if you want to make an 197 00:10:55,500 --> 00:10:58,770 Sean Aylmer: investment decision, go and seek your own personal advice. Very 198 00:10:58,770 --> 00:11:01,049 Sean Aylmer: important you do that. Join us every morning for the 199 00:11:01,049 --> 00:11:03,929 Sean Aylmer: full episode of Fear and Greed, Australia's most popular business 200 00:11:03,929 --> 00:11:06,449 Sean Aylmer: podcast. I'm Sean Aylmer. Enjoy your day.