The common penny inventory is extremely risky and Helium One World (LSE: HE1) is definitely no exception. Because the begin of 2024, it’s surged 272%, but it’s additionally down 66% since February.

The exploration agency floated in late 2020, after which its shares took off like a helium-filled balloon. Nevertheless, since reaching 27p in mid-2021, they’ve steadily deflated and now commerce for lower than 1p every.

However the firm has been making notable operational progress. So, may this be the following millionaire-maker penny inventory? And if it’d, ought to I make investments? Let’s dig in.

Not simply scorching air

Helium One is a pre-revenue firm centered on exploring and growing helium assets. It has tasks in Tanzania and a 50% curiosity within the Galactica-Pegasus mission in Colorado, USA.

The corporate has already recognized helium-rich gasoline in Tanzania, and it’s utilized for a mining license there.

In the meantime, Colorado regulators have permitted 5 new proposed helium wells on the US mission. Drilling was meant to be getting below method now however has been delayed (extra on that under).

What’s so particular about helium?

Helium is a colourless, odourless gasoline that’s plentiful within the universe however uncommon on Earth. Most of it’s present in pure gasoline fields, although in small portions, making it tough to extract.

It has a variety of purposes throughout varied industries and fields. For instance, it’s essential in MRI scanners, is utilized in semiconductor manufacturing, and is required in house exploration to chill rocket engines and pressurise tanks.

As international demand will increase for these applied sciences and the provision of this useful resource is proscribed, costs are anticipated to rise. Subsequently, it’s a helpful commodity and never nearly filling balloons!

Rained off

Right this moment (13 December), the corporate introduced that because of wet climate the development of properly websites and entry roads at its Colorado mission has been postponed.

Its companion and mission operator, Blue Star Helium, has rescheduled drilling to mid-January 2025 to keep away from pointless prices through the Christmas interval.

Nevertheless, the general mission timeline stays on monitor, the agency stated, with manufacturing nonetheless anticipated to begin in H1 2025.

As I write, the market doesn’t appear anxious as a result of the share price is up very barely.

Attending to £1m

If Helium One can get this treasured gasoline flowing and enters into provide contracts, the share price may rocket a lot larger.

We received a glimpse of such potential in January 2024 when it exploded 1,300% larger within the house of two weeks. If it went up that a lot once more from at this time, an investor would want to have roughly £71,500 within the inventory to achieve £1m.

I wouldn’t put £71k right into a penny inventory, so it received’t be making me a millionaire, no less than below this situation.

However ought to I take a punt?

For the monetary yr ended 30 June, the corporate reported a complete lack of $11m. It had $11.6m in money in June, highlighting its restricted monetary assets and the dangers right here.

This yr, it raised funds issuing shares in February, June and August. Then this month it issued a load of shares to a service supplier as a substitute of money. This degree of shareholder dilution turns me off.

Helium One is an fascinating penny inventory with potential, but it surely’s far too dangerous for my liking. I’ll be investing elsewhere.