Pulsar Helium: Topaz Development Valuation

Thesis

A source-backed valuation of Pulsar Helium's Topaz project that distinguishes contingent and prospective resources from reserves, short-duration test rates from sustainable commercial feed, the reserved equipment package from all-in installed cost, and project funding from common-shareholder value.

Open the integrated Topaz valuation model.

Key chart

The argument

Topaz can become a strategically valuable primary-helium project, but the value chain contains several separate gates:

1. convert contingent and prospective resources into commercially recoverable reserves;
2. prove sustained multi-well deliverability rather than short-duration peak flow;
3. execute a definitive processing and liquefaction purchase agreement;
4. complete the plant, gathering, power, storage, loading, CO₂, and site infrastructure;
5. secure bankable helium and CO₂ offtake terms;
6. finance the development without transferring or diluting most of the project economics; and
7. commission and operate the system at adequate uptime and recovery.

The model gives each gate explicit treatment. It does not award full nameplate economics merely because a processing package has been reserved, and it does not treat prospective resources as proved inventory.

What changed from the prior valuation

The earlier framework identified the resource-versus-nameplate mismatch, but it still allowed the strategic operating case to assume utilization that was not directly constrained by sustained field deliverability. The refined model adds five major controls.

Sustained well feed constrains utilization

The 940-litre-per-hour package is a processing ceiling, not a production forecast. The model calculates the raw-gas feed required to support output using helium concentration, processing recovery, uptime, and modeled sustained flow per well.

The Base case uses eight producing-well equivalents at 0.75 MMcf/day each. That supports approximately 60% of plant nameplate, below the 70% commercial-utilization target. Approximately 9.3 comparable well equivalents would be needed to support 70% utilization under the Base composition and recovery assumptions.

Jetstream #2 is separately risked because the well was mechanically restricted and required remediation. The Base case does not automatically treat it as a fully productive development well.

Resource classification remains intact

The competent-person report contains contingent and prospective resources, not reserves. The model therefore applies separate assumptions for geological success, resource expansion, recovery, and development probability.

The Base case produces approximately 164.9 MMcf of modeled risked recoverable helium. That figure is an analytical bridge, not a company reserve estimate. It covers only a fraction of the gas required by a long-lived development case, so the central valuation still depends on successful appraisal, conversion, and expansion.

Installed cost extends beyond the equipment package

The approximately US$78.7 million indicative package price does not represent a complete commissioned project. The Base sources-and-uses schedule also includes:

• development wells and remediation;
• gathering and field infrastructure;
• power and electrical systems;
• civil and site work;
• storage and tanker loading;
• CO₂ handling;
• engineering and owner costs;
• commissioning and working capital; and
• contingency.

The Base case estimates approximately US$122 million of all-in installed plant cost and roughly US$146 million of total remaining pre-production uses. Confidence remains low until definitive equipment, engineering, construction, and infrastructure scopes are disclosed.

Financing is carried through to common shares

The model begins with the July 2026 financing and the company-reported fully diluted security count. It then estimates project debt, strategic-partner capital, remaining liquidity, and the residual equity requirement.

The Base case assumes US$55 million of project debt and a strategic partner funding 10% of the plant. The partner is also assigned a corresponding 10% economic share; its capital is not treated as free money.

After those sources, the Base case still has an estimated US$51 million equity gap. At the modeled financing price, this creates approximately 64 million new shares, taking the illustrative fully funded denominator to roughly 293 million shares.

That dilution is a central reason the Base fully funded value is materially below a calculation that divides gross project value by only today's share count.

Helium pricing and netback

The model uses a project netback rather than applying a headline retail liquid-helium price directly to production. The netback must absorb or reflect purification, liquefaction, storage, handling, transportation, distributor economics, product specifications, customer terms, and any discounts embedded in financing or offtake agreements.

The Base case starts at US$22 per liquid litre, equivalent to roughly US$550 per Mcf before escalation. This is an analyst assumption, not a disclosed Pulsar contract price.

The current enterprise value is demanding under the Base risk weight. The price bridge indicates that, holding other Base assumptions broadly constant, a substantially higher starting netback would be needed to support the market value without assigning additional resource, plant-option, or corporate optionality.

CO₂ economics

The reserved package includes approximately 300 tonnes per day, or about 109,500 tonnes per year, of nameplate CO₂ capacity. The model scales actual CO₂ output to gas feed and plant utilization rather than assuming full nameplate production independently of helium operations.

At the Base US$40-per-tonne netback, CO₂ provides a useful operating contribution but remains a small portion of modeled peak revenue. Commercial value will depend on purity, local demand, storage, loading, transportation distance, customer qualification, and actual offtake pricing.

Scenario analysis

Constrained case — C$0.10 per fully funded share

The constrained case assumes four well equivalents at 0.30 MMcf/day, approximately 9.5% field-supported utilization, a US$12-per-litre starting helium netback, higher installed cost, and a 22% discount rate.

The project DCF remains negative, so no operating-project value is recognized. Equity value is principally the modeled net-liquidity balance spread across a substantially larger fully funded share count.

Base case — C$0.19 per fully funded share

The Base case assumes eight well equivalents at 0.75 MMcf/day, approximately 60% field-supported utilization, a US$22-per-litre starting netback, a 15% discount rate, US$122 million of installed plant cost, and material equity financing.

The un-risked development NPV is positive but modest relative to the current market enterprise value. After development probability, partner economics, financing needs, and dilution, the fully funded common-share value is approximately C$0.19.

Upside case — C$1.76 per fully funded share

The upside case assumes ten well equivalents at 1.30 MMcf/day, 85% utilization, a US$28-per-litre starting netback, lower installed cost, stronger debt availability, and US$40 million of Falcon, corporate, and helium-3 option value.

This is intentionally demanding. The 1.30 MMcf/day input was a compressor-assisted test peak, not a proved multi-year sustained rate. The case also requires further resource conversion and assigns value to options that may never become commercial.

Market-implied expectations

The model does not conclude that the market is necessarily wrong. It identifies what the market must be assuming that the Base case does not yet prove.

Potential explanations include:

• a much larger connected resource than the currently risked inventory;
• sustained rates nearer the compressor-assisted test result;
• faster and more successful development drilling;
• premium liquid-helium offtake economics;
• lower equipment, EPC, infrastructure, or contingency costs;
• more project debt and less equity dilution;
• valuable third-party gas processing;
• commercial helium-3 recovery; or
• strategic acquisition value not captured by a stand-alone DCF.

The market can be correct only if enough of these favorable assumptions become evidenced and economically retained by Pulsar shareholders.

Catalysts

Evidence that would justify raising completion probabilities or reducing required returns includes:

• a definitive plant purchase agreement with complete scope, price, milestones, warranties, and financing;
• successful Jetstream #2 remediation;
• sustained multi-day or multi-week flow testing with pressure and decline data;
• repeatable well performance across the six-well program;
• an updated independent resource estimate with meaningful conversion to reserves;
• bankable helium and CO₂ offtake agreements;
• committed project debt with disclosed covenants and equity requirements;
• final engineering, permitting, construction, and commissioning milestones; and
• demonstrated helium recovery, product purity, uptime, and operating cost.

Risks and disconfirming evidence

The valuation should be reduced if new wells fail to reproduce the expected helium concentration or flow, commercial decline is steeper than modeled, the connected reservoir is smaller or more compartmentalized, plant and EPC costs exceed contingency, the equipment transaction or delivery slips, offtake terms transfer value away from Pulsar, debt availability is lower, CO₂ cannot be sold economically, or helium-3 separation is uneconomic.

Detailed conclusion

Pulsar has a credible path to an unusual primary-helium development, but the project remains between discovery and bankable commercial execution. The most important variable is not the theoretical output of the liquefaction package. It is the amount of sustained, recoverable, financeable helium feed that can reach that package over time.

Under the current evidence set, the Base case does not support the market reference price. The upside case can, but only by assuming much stronger deliverability, resource conversion, pricing, financing, and option value than has been demonstrated.

The appropriate way to use the model is as an evidence-updating system. Each drilling result, flow test, resource report, plant contract, offtake agreement, financing term, and construction milestone should change specific assumptions rather than merely reinforce a narrative.