Australian start-up HyTerra has announced a A$6.1m ($4m) capital raise to fund a campaign to drill for natural hydrogen — also known as white or gold H2 — in the US state of Kansas in the third quarter of this year.

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The company already fully owns 9,600 acres (39sq km) of land for its Nemaha project, where it claims more than ten hotspots for natural hydrogen and helium have been detected.

HyTerra estimates a 90% probability that its land could have 111,738 tonnes of net recoverable H2, with a 10% chance of 565,340 tonnes.

However, the start-up also suggests in a presentation document for investors that the Nemaha project’s hydrogen is generated when water from the Rocky Mountains seeps eastward through underground iron-rich mafic rock, splitting off the H2 which is then trapped in subsurface reservoirs throughout the Nemaha Ridge. This means the resource could be renewable, rather than a static amount of gas.

The company aims to recover natural hydrogen at a cost below $2/kg and a carbon intensity below 0.4kg of CO2-equivalent per kilo of H2 — the threshold to qualify for the up-to-$3/kg clean hydrogen production tax credit.

Additionally, HyTerra also expects that its land has, to a probability of 90%, 37 million standard cubic feet (about a million cubic metres) of helium under the surface, an increasingly expensive commodity. The start-up notes that liquefied helium currently sells for around $450 per thousand cubic feet, or 50 times the price of liquefied natural gas.

The firm has suspended trading of its shares on the Australian Stock Exchange in advance of a placement of 48.8 million new shares (expected to raise up to $878,400) and a rights issue for current shareholders of four new shares per nine existing shares (expected to raise up to $5.24m).

HyTerra plans to spend around A$1.5m to continue leasing priority areas and A$2m to drill two wells, with evaluations of geophysical data and resource, as well as a commercialisation plan, set to take place from the fourth quarter onwards.

The company previously drilled for natural hydrogen and helium at the Geneva project in the adjoining US state of Nebraska, saying it had found “elevated” levels of hydrogen during swab testing.

In March last year, Hyterra’s then chief operating officer Luke Velterop told Hydrogen Insight that it would report on the findings the following month, but it has yet to do so. However, the company has yet to do so and Velterop left Hyterra in September 2023.

The start-up did not respond to recent enquiries about the status of the Geneva project, and its website still states that the project partners are “awaiting the provision of key data and metrics”.