One of the most striking things about the Nomgon project, for both investors and market watchers, is its overall size. The permit Elixir holds to develop Nomgon is a whopping 30,000km² (seven million acres.)
Three drill rigs (not attached to the pilot plant spudding next month) remain active on-site and continue both exploration and appraisal drilling runs.
The company has met with considerable success so far in that what it’s searching for, it’s struck time and time again: underground coal deposits with evidence of gas-bearing geology.
Back in May, the company finished its Tim-2 appraisal well, the deepest well executed on-site at the time.
Tim-2 intersected less coal than Tim-1 did, which left the company optimistic it was on the right path to figuring out where gas was, and where gas wasn’t (read: defining the geological resource dimensions.)
Shortly after it finished drilling its separate Bulug-Suuj-1 exploration well, which like Tim-1-2, will be followed up by a second appraisal run.
Results for the Venetian-1 exploration well remain pending, as does the completion of the Yangir-5 well, being drilled by Ellecohr LLC.
Elixir notes geotechnical issues prevented the earlier announced Yangir-4 from being completed to its total depth.
On top of all this work, the company is also to publish results of a 2D seismic program over the acreage in the coming months.
Elixir’s presence in the Gobi is twofold, in terms of the production of commodities.
While its pilot plant being commenced next month will ultimately be a gas (methane) production asset, the company also signed an MOU with Japanese giant SoftBank in June to produce green hydrogen in Mongolia.
This project, above the methane, is what Elixir appears most excited for, given that it has pivoted much of its marketing resources to discussing the commercial potential of the latter deal.
Investors should note Elixir is ultimately seeking to produce green hydrogen in Mongolia, to be sent via pipeline to China.
Chinese climate and energy policy is right now harmonised with ‘the West’s,’ in that an enthusiasm for green hydrogen has come to underpin much of the CCP’s methodology towards net zero targets and goals.
Elixir also notes an existing hydrogen pipeline network is already present in China, and that overland pipeline transport is cheaper than seaborne hydrogen delivery, which is currently how hydrogen from the LaTrobe Valley in Victoria gets to Japan.
With all of that said, investors should also note the Gobi H2 project is still in its infancy, though, a water drilling well will be spud on-site by the end of next month as Elixir fulfils its part of the bargain to SoftBank by finding water resources.
Green hydrogen production, after all, requires a lot of it.
Talking dollars and sense: Elixir Energy finished the June quarter with $22.7m and no debt. Expenditure in the quarter sits at $2.1m. No raising exercises have been declared for the immediate future and as of late July, the company has a market cap of $138.2m.
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