Jade Gas (ASX:JGH) shares remained at 5.5c today, even as the company announced an agreement with Mongolia Mining Corporation (MMC) allowing Jade to explore a lucrative coal-hosting tenement nearby its existing operations.
Jade Gas recommenced trading on the ASX last October following its acquisition by formerly named High Grade Metals. HGM, in turn, became Jade Gas.
MMC is listed on the Hong Kong Stock Exchange (also known as the Hang Seng), its subsidiary Khangad Exploration was the signing body.
Jade Gas is now preparing to commence exploration at the Baruun Naran coal field, a continuation of the Tavan Tolgoi coal basin, where Jade’s existing project (the Tavan Talgoi CBM project, or, TTCBM) is located.
The TTCBM project is in turn managed in a partnership between Jade Gas and the Mongolian state-owned Erdenes Methane LLC.
Notably, Baruun Naran has an existing JORC-compliant resource suggesting over 400m tonnes of coal are present on-site.
Further, an existing 2U prospective gas resource is attached to Baruun, broken into the following:
Low-range estimate: 13 billion cubic feet of natural gas (Bcf)
Best estimate: 65Bcf
High-range estimate: 186Bcf
As part of the exploration approval permit, signed off on by the Mongolian government’s Mineral Resources and Petroleum Authority (MRPAM), Jade will contribute US$160k over three years into 2025.
Jade Gas is required to drill at least two core holes within the first two years of exploration at Baruun.
The company is not subject to any other disclosed conditions as part of the permit approval.
Exploration data already exists for the project acreage, including coal exploration borehole information and the results of seismic surveys over the area, held by MMC.
Private player QGX dran two borehole drill campaigns on-site between 2005 and 2010, MMC last carried out exploration at Baruun in 2011.
“We are delighted to have secured an agreement over the Baruun Naran coal field with Khangad…Jade has delivered successful results at the [Tavan Tolgoi] project, which makes Baruun a logical expansion,” Jade Gas CEO Chris Jamieson said.
“We look forward to leveraging our results to date, along with early stage work at the BNG project, to deliver on our ultimate aim of becoming a meaningful gas producer in Mongolia.”
Jade Gas is not the only energy company focusing on coal deposits in Mongolia.
It is joined by a partnership spearheaded by TMK Energy (ASX:TMK) along with Talon Energy (ASX:TPD), where the ongoing Snow Leopard drilling campaign has logged a 100% success rate (read: all wells so far have hit potentially commercial amounts of gas.)
That partnership is also added to a list that already includes Jade, and, Elixir Energy (ASX:EXR) which develops a similar project, called the Nomgon project, also targeting gassy coals.
Rio Tinto (ASX:RIO) and private mining contractor Thiess also operate in the region. The Australian website for the Mongolian embassy notes over 50 Australian companies operate in Mongolia across all sectors.
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