ASP Isotopes (NASDAQ:ASPI) executives outlined plans to create a publicly listed helium and liquefied natural gas platform through Noble Africa, emphasizing Renergen’s South African helium resource, expected near-term production milestones and the proposed merger with ENDRA Life Sciences.
Paul Mann, CEO of ASP Isotopes and Noble Africa, said Noble Africa, which holds Renergen, plans to merge with ENDRA Life Sciences, currently trading under the ticker NDRA. When the merger is completed, Mann said ASP Isotopes is expected to own about 89% of the combined entity, while ENDRA’s current float and a concurrent PIPE financing would own about 11%. He said exact share details were included in a previously filed 8-K.
Executives Highlight Helium Supply Shortages
Mann described Renergen’s asset as a “world-class helium reserve” with unusually high helium concentrations. He said gas fields in the Middle East typically contain about 0.03% helium, U.S. fields about 0.3%, and Renergen’s South African resource about 3% based on what the company has seen so far.
Nick Mitchell, COO of Noble Africa and one of Renergen’s original founders, said helium is used in MRI systems, semiconductor manufacturing and space launches because of its inert properties and extremely low boiling point. Mitchell said a Falcon 9 launch uses approximately 11.7 tons of helium, and he cited expected industry growth of about 5% to 6% per year, while saying forecasts may be constrained by supply availability.
Mann said the global helium market is facing significant disruption, with roughly 50% of supply offline. Mitchell pointed to impacts at helium facilities in Qatar, including disruptions tied to Middle East conflict and a separate explosion affecting feedstock to a helium train. He also cited Russian export controls and a drone strike affecting Russian helium facilities. Mitchell said the company believes the market could face extended constraints, potentially affecting about 20% of total supply for several years.
Phase 1 Production Targeted for Third Quarter
Mann said Phase 1 of the project is “almost complete” and expected to reach nameplate capacity during the third quarter. He said the plant has produced liquid helium already, is shipping LNG today, and is in the process of connecting new wellheads to the plant through a gathering system.
Phase 1 is expected to produce about 70 Mcf per day of helium and about 2,500 gigajoules per day of LNG, Mann said. He said the company expects to begin shipping product to customers by September.
On contracts, Mitchell said the company is not tied to historic agreements at earlier pricing levels and now has the ability to rebaseline contracts to current market conditions. He said Renergen recently concluded a new offtake agreement priced at more than $600 per Mcf and expects to lock up most Phase 1 helium molecules at similar pricing.
Mann said the first signed contract is with an Asian customer and represents about 15% of Phase 1 output. He said the company aims to contract about 75% of Phase 1 and about 15% of Phase 2 output.
Phase 2 Envisioned as Larger Project
Mann described Phase 2 as substantially larger, with expected production of about 900 Mcf per day of helium and about 34,000 gigajoules per day of LNG. He said the project is expected to take about 44 months to build and could begin commissioning in 2030, with the first full year of commercial revenue in 2031.
Using assumptions of $600 per Mcf for helium and $13 to $14 per gigajoule for LNG, Mann said Phase 1 would generate about $27 million in revenue and $10 million to $11 million in cash gross profit excluding depreciation and amortization. Under similar assumptions, he said Phase 2 would generate about $370 million in revenue and about $300 million in cash gross profit.
Mann said Phase 2 is expected to benefit from about $500 million of funding from the U.S. government and about $250 million from Standard Bank. He identified financing risk, construction risk and market risk as key risks, while saying the company expects to mitigate construction risk through a turnkey contract with a plant supplier and market risk through long-term take-or-pay contracts.
Mitchell said LNG contracts are generally expected to run five to eight years, while helium contracts are expected to run 10 to 15 years. He said both types of contracts are expected to include take-or-pay mechanisms at approximately 80% and price escalators tied to South Africa’s Producer Price Index.
South African Gas Market Seen as Supportive
Mitchell said South Africa’s natural gas supply outside Renergen currently comes through the Rompco pipeline from Mozambique, produced by Sasol. He said Sasol has indicated that from 2028 it would not be able to continue supplying the external market, creating what he called a “supply gas cliff.”
Mitchell said current demand outside Sasol would require approximately 65 petajoules of natural gas per year, rising to about 185 petajoules per year if Sasol’s own needs are included. He said the government’s gas master plan forecasts gas-to-power demand of about 870 petajoules per year by 2032. By comparison, he said Renergen’s Phase 2 project would produce 12 petajoules per year.
In response to a question about infrastructure, Mitchell said helium is exported in 40-foot ISO containers and does not require specialist port infrastructure. He said several South African ports are within roughly eight hours’ trucking distance from the facility.
Management Says Noble Africa Will Remain Majority-Owned by ASP
Mann said ASP Isotopes does not intend to spin out Noble Africa shares to ASP shareholders, saying the company views the asset as highly strategic and plans to maintain a large ownership position.
He also said potential strategic investors have expressed interest in investing in the asset in connection with Phase 2 contracting discussions. Mann added that ASP Isotopes’ balance sheet is “extremely strong” and said Noble Africa has raised about $50 million of capital through the listing process.
Asked why the company is using ENDRA as a merger partner, Mann said ENDRA had a clean capital structure, no debt, few warrants, few employees and limited long-term liabilities, making it suitable as a shell for a reverse merger. He said ENDRA’s existing medical imaging-related businesses are non-core and would likely be divested, spun out or shut down so the combined company can focus on Renergen and Noble Africa.
About ASP Isotopes (NASDAQ:ASPI)
ASP Isotopes Inc, a development stage advanced materials company, focuses on the production, distribution, marketing, and sale of isotopes. It engages in the production and commercialization of Molybdenum-100, a non-radioactive isotope for the medical industry; Carbon-14; and Silicon-28. The company is also developing Quantum Enrichment technology to produce Ytterbium-176, Nickel-64, Lithium 6, Lithium7, and Uranium-235. ASP Isotopes Inc was incorporated in 2021 and is headquartered in Washington, District Of Columbia.
