The new leases are from private mineral owners for an initial term of five years with an option to renew for a further five years.
Around 69,378 net acres have been verified with 4,108 net acres subject to verification.
The company's shares have been up as much as 30% to 3.5 cents intra-day, a new 2020 high.
“Consolidates land position”
Blue Star managing director Joanne Kendrick said: “The acquisition of an additional 5,356 net acres further consolidates Blue Star’s land position in the highly prospective Las Animas region, where we now hold about 130,000 gross acres across 11 prospects and leads.
“We have several exciting months ahead of us as we progress to our drilling program in quarter four this year and we are working hard to add more prospects into that drilling program.”
The company's landholding in Las Animas.
New lease terms
The leases do not include any minimum work commitments and Blue Star is the only working interest owner.
If Blue Star successfully produces helium or other products from the lease area, a 12.5% royalty will be payable to the lessor and the lease term will be extended indefinitely until production ceases.
The company has agreed to pay lease bonuses to the lessors after concluding customary verification, however, the total amount of the lease bonuses payable is not material to the company.