? Jade confirms the detail plans for its initial 2024 drilling program aimed at further
expanding the already defined ~45km gas field extent and additional potential in the
South Gobi region of Mongolia
? Program continues to focus on the TTCBM Red Lake area as well as the adjacent BNG
project
? The TTCBM program will include the drilling and completion of lateral pilot production
wells to test gas production rates
? Drilling activities will continue at Baruun Naran following success at BN-3 where 104.6m
gassy coal was intersected – the second thickest gassy coal interval intersected to date
(reported last quarter)
? A tender process is underway to confirm key contractors for Red Lake’s production pilot
operations which are expected to commence in the coming weeks
? Exploration activities to commence in 2024 on the high gas resource potential at Shivee
and Eastern Gobi, including the drilling of core holes
? Discussions with customer, partner and plant/facilities suppliers continue in order to
determine the quickest pathway to commercial production.
Jade Gas Holdings Limited confirms 2024 exploration activities, designed
to expand its already established 45km gas field extent in the south Gobi region of Mongolia.
2024 Drilling Program
Following the highly successful 2023 exploration campaign, Jade has completed a full technical review which
has led to confirmation of initial 2024 operations including a drilling program in the Red Lake and Baruun
Naran areas. 2023 Company operations ended on a high note with Baruun Naran-3 well (BN-3) intersecting
the second thickest gassy coal interval (104.6 metres) ever intersected by Jade. Results from the 2023 drilling
and testing operations have provided the basis for determining the 2024 work program, which has already
been presented to and approved by the Mineral Resources and Petroleum Authority of Mongolia (MRPAM).
A tender process is underway to confirm contractors for the Red Lake program which is expected to be
announced by the end of the calendar month. Drilling at Baruun Naran will recommence soon under the
Company’s resource evaluation program. The initial part of the 2024 program is designed to determine the
quickest pathway to commercial production across Jade’s gas projects which have already established
potential over a ~45km gas field footprint.
Commercial negotiations continue with strategic investors to fast track the delivery of gas to customers.
Red Lake Area
6 new exploration wells are planned (Red Lake wells 16-21) with a primary objective to expand the existing
246 Bcf resource1
, leverage seismic data/interpretation to maximise understanding of regional structure,
and test shallow gassy coal seams. The 2023 seismic data will be used to guide the location of some of these
wells. 3 wells (RL19, 20 and 21) are aimed at delineating coal resource in areas of low well spatial density
and quality data in southwest and south parts of the Red Lake area (outlined in the map below).
The Company will also drill 4 lateral wells as a part of the pilot production program to establish gas
production rates from the targeted coals. These lateral wells were deferred from Q4 2023 due to a
combination of factors (refer ASX release dated 22 November 2023). Under the terms of the Production
Sharing Agreement (PSA), Jade must undertake a tender process to ensure the most capable and
appropriate service providers are engaged for such a strategic project for the country.
Baruun Naran (BNG)
The remaining 5 prospecting wells are aimed at gathering necessary data to fully delineate target known
gassy coal seams, particularly at depth. The first three of these BNG wells have already successfully
intersected:
- 35.0m of gassy coal (BNG-1, previously reported ASX Release 8 November 2022);
- 26.0m of gassy coal (BNG-2, previously reported ASX Release 13 December 2022); and
- 104.6m of gassy coal (BNG-3, previously reported ASX Release 19 December 2023).
Further success at BNG is expected to support the conversion of 2U Prospective Resources to 2C Contingent
Resources in the existing BNG permit, and importantly provide an accelerated pathway to securing a long
term Production Sharing Agreement (PSA) over the permit area. This will ultimately see Jade with significant
equity and operatorship of the two key energy projects in the South Gobi, at a pivotal time for the country
with clean energy demand growing rapidly from multiple customer markets.
BNG is a Joint Venture (JV) with Hong Kong listed Mongolia Mining Corporation Limited (MMC), which holds
the CBM rights over MMC’s Baruun Naran coal mine, immediately adjacent to the TTCBM Project. MMC is
Mongolia’s largest publicly traded miner with a vision is to become the country’s largest diversified mining
company. Jade is working alongside MMC to further appraise and determine the commercial pathway for
gas in this project.
Shivee and Eastern Gobi Permits
Within the 2024 program, Jade aims to progress two 100% owned, highly prospective, and sizeable coal bed
methane projects at Shivee Gobi and Eastern Gobi, covering a total area of 18,000km2
. These projects are
located to the north and east of the TTCBM Project and have an estimated gross unrisked 2U Prospective
Resource of 5.4 Tcf2
.
Jade holds Prospecting Agreements over both permit areas and retains some flexibility on the timing and
extent of drilling activities. Whilst the major focus will remain on Red Lake and BNG, the Company will
undertake further desktop analysis with the potential for drilling and permeability testing in the second half
of 2024. This work will also assist the Company in identifying exploration upside potential.
Given the favourable location of the permits, there is considerable interest from potential partners for
involvement at varying levels. The Company will continue to assess such partnering options.
Commenting on the initial 2024 exploration program, Jade Executive Chairman, Dennis Morton, said:
“We are expecting another very busy year of both inground activity as well as mid and downstream
commercial progress. The exploration program has been designed to provide additional certainty on the
broader potential, but the real, immediate value add is expected to come through the drilling of the lateral
wells and commencement gas production.
As we expedite a path to production, we expect the interest in the country’s highest potential cleaner energy
project to further increase, and we look forward to working with the regulator MRPAM as well as all our incountry stakeholders to deliver a successful program.”
Financing Update
On 2 November 2023, the Company announced that it had obtained financing of A$11M from Jade’s
strategic shareholder, UB Metan LLC (UBM) via the issue of unsecured convertible notes. Funds have been
advanced to Jade as and when needed and pursuant to the payment schedule detailed in the Convertible
Note Deed. The final tranche is expected to be paid by 30 April 2024 following shareholder approval for the
transaction. As required by ASX Listing Rules, Jade must provide shareholders with an Independent Expert
Report (IER) in advance of this meeting to evaluate the transaction. The IER process has taken longer than
anticpated and the Company now expects that it will be in a position to release a Notice of Meeting to
confirm details for the extraordinary general meeting in the coming weeks.
Authorised for release on behalf of the Board by Joseph Burke, Executive Director.