Elixir finishes on strong note, but wait, there’s more ...

By Trevor Hoey. Published at Dec 3, 2020, in Energy

Elixir Energy Limited (ASX:EXR) has provided a promising update in relation to its 100% owned Nomgon IX CBM PSC in Mongolia.

Management has been awaiting critical information regarding adsorption results from the Nomgon 2 core-hole well.

COVID-related issues have caused some delay as the laboratory results are being processed in Beijing, but the news was worth waiting for as it demonstrated that the lower 100 series coals at Nomgon-2 are fully gas saturated.

This is consistent with the Nomgon-1 well, representing a best-case scenario as it will greatly reduce the costs and other issues associated with water handling in future testing and production phases.

Proof of consistently strong adsorption results will positively impact the company’s production testing in 2021.

Elixir provides exposure to China’s five-year energy plan

With its extensive PSC landholding providing ready access to high demand markets in China, Elixir represents a compelling investment play for Australian investors in that it is one of only a few ASX- listed companies that offers exposure to the globally significant thematic of a de-carbonising and increasingly energy security-conscious China.

China’s new “5 year plan” dramatically reduces its reliance on other global powers for key resources, especially its energy supply with the added advantage of transitioning from burning dirty coal for energy.

Commenting on recent developments, Elixir’s managing director Neil Young said, "The consistent adsorption result from Nomgon-2 indicates that the earlier high gas saturation levels from Nomgon-1 were not a one-off and this is already feeding into our production testing plans for next year.

"COVID has been a universal factor for all of us in 2020 and although Elixir (and Mongolia) has generally been impacted much less than others, shutting in our operations for a month or so in the midst of the Mongolian winter is ultimately a prudent move.

"All 7 wells drilled this year intersected coal and we are already advancing the processes and plans required to hit the ground running in the New Year.

"Our planned technical program for 2021 will greatly expand upon 2020’s excellent work.”

The company’s outstanding progress has been reflected in its share price, up six-fold since January with the potential for further upside in 2021 given multiple catalysts are on the horizon.

Elixir now focused on 2021 production testing and exploration program

With the Mongolian winter now upon it, Elixir’s shut down of its operations over the next few months has proven to be fairly timely as some COVID restrictions have recently been applied due to community transmission.

However, Mongolia has been one of the lucky countries in that broader region with little interruption from COVID, and apart from some inconveniences in recent weeks, it has been business as usual for Elixir.

However, management isn’t taking any risks as it looks towards 2021.

In order to effectively manage health issues, as well as supporting the local community, Elixir has purchased 30,000 masks and 600 bottles of hand sanitiser for donation to the local authorities in the region of its PSC.

Elixir anticipates commencing its 2021 program in or around February with the drilling of a fully tested core-hole to follow up on the highly promising Yangir 1S strat-hole.

Some gas samples were obtained from the bubbling cores extracted in the Yangir well and these will be tested for gas composition shortly (gas content cannot be accurately measured given the absence of an on-site laboratory for what was only a low-cost strat-hole).

Management has recently submitted its formal budget and plan for 2021 to the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) as part of an annual regulatory process required under the terms of the Nomgon IX PSC, which will also involve procuring subsequent environmental approvals from the relevant Ministry.

Where to invest $1,000 right now

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why Finfeed.com is Australia’s leading small cap publication

Founded seven years ago, Finfeed.com is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise.

Finfeed.com provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more.

Finfeed.com is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!