Jul 10, 20223 min
A company that had previously attempted to lease the McCauley acreage is making a claim that a valid lease with them was already in play. The drilling rig for Desert Mountain's Gunnar Dome prospect, Arizona has been will be mobilized soon. The intended depth of this well is ~4,500 ft and is designed to test all zones to the top Granite Formation. If successful, the company anticipates running commercial quantities of helium through the plant's construction by GENERON. It has not signed any long-term helium offtake contracts so far.
Press Release:
The Company is pleased to announce that the rig has been released to us and will be mobilized to our Gunnar Dome prospect in Arizona. The intended depth of this well is 4,500'+- and is designed to test all zones to the top Granite Formation. We will be utilizing our same successful drilling procedures, including multiple casing strings designed to protect all zones and the environment. Our geologic modelling suggests that the gas composition should contain high concentrations of nitrogen. At this point, we would anticipate initially running any commercial quantities of helium through the plant currently under construction by GENERON.
The Company feels that since this is a documented domal structure with closure on all sides the well has been situated to take maximum advantage of the trapping mechanisms of the underlying formations.
The helium processing plant construction continues and assembly by GENERON will be shipped to us via our trucking company upon completion. When finished, the plant will be situated on property that the Company currently owns and is not subject to any form of lease agreements. The Company continues to be contacted by numerous entities looking to secure some percentage level of helium from us when we go into production. As of today, other than for the USFCR documents to allow us to get paid the same day as transport, we have not signed any long-term contracts. We have multiple ongoing discussions with company's whom we have signed MDNAs and therefore, will not be making any comments concerning those negotiations or the methodology for pricing. It is our goal to have no account receivables in relation to helium production.
With regards to future hydrogen production, we have signed MDNAs and are actively working to develop a long-term strategy and look forward to having announcements on that sector within the next 30-45 days. This sector by its very nature must be considered as a long-term possible factor for the Company.
The Company was notified by Chevelon Minerals LLC., the owner of the McCauley family minerals, that a company which had previously attempted to lease from the family was making a claim that a valid lease with them was already in play.
The Company, early in its due diligence with Chevelon Minerals LLC., had been advised by the McCauley family that, after the material requirements of this prior lease had not been met, they had restructured their mineral ownership and placed the leases in question into Chevelon Minerals LLC. The representative also stated that they would work with the company in defence of the title and leases that Desert Mountain Energy Corp. has with them. For the record, the Company has paid Chevelon Minerals LLC. in excess of $33,000.00 for the leases it currently has of record which includes the lease under wells 4, 5, 6, and 7.