But as helium demand grows, the industry is still a niche market with no public spot price for the product. As more prospectors enter the growing space, they’re finding out that it’s a bit of a undefined market.“If you try and find a spot price for helium, you can’t," said Greg Robb, president and chief executive officer of Helium Evolution Inc., in a phone interview. “You can get sort of rough ideas. We were offered at one point a contract for $350 per mcf [thousand cubic feet].
“We were at a little mineral conference about four weeks ago,” said Robb. “It was mostly mining companies and there was a company called Desert Mountain Energy Corp. which is a helium company listed on the TSX Venture exchange, but working down in Arizona. The guy that presented, [company president] Don Mosher, said the market in Arizona for wholesale helium was $1,500 per mcf.
“It’s more like an oligopoly. There’s a handful of them, like five or six, and they like their position,” he noted. “The contracts that we were offered, we had to sign non-disclosure agreements and so we couldn’t tell our price point to other end users or other competitors in the market.” “For one thing, their business is the risk-free business. Our business is the high-risk end. So our shareholders are taking the risk and their shareholders are getting an oligopoly kind of rent and we need to close that gap," he said.
"You can get a relative spot price, but whether or not that translates into a price you can contract at is a whole other story,” Davidson said. “It depends entirely on who you’re selling it to.”
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