Multiple share price catalysts in the mix at Elixir’s Nomgon Project

By Trevor Hoey. Published at Apr 14, 2021, in Energy

As Elixir Energy’s (ASX:EXR) largest seismic acquisition program to date commences, management has provided an update on the current exploration/appraisal program underway across its 100% owned Nomgon IX CBM PSC in Mongolia.

Given this backdrop and the fact that the exploration wells in two new sub-basins are due to spud later this month, it isn’t surprising to see the company’s shares trading at an eight-year high as its much anticipated program delivers a raft of new data that could support a significantly higher valuation.

Management said that drilling and seismic programs were progressing despite some COVID-19 lockdowns that were occurring in Mongolia.

Most importantly, the first well in the 2021 drilling program, Yangir 2, has just been finished.

The Yangir depocenter has to date proven to be highly fractured and hosting of gaseous rocks, which is encouraging for permeability and gas content respectively, but has made for more complex drilling operations.

The well reached a total depth of 578 metres and in the first 300 metres logged 17 metres of coal - logging beyond 300 metres was not feasible due to hole conditions.

Pipeline specification gas composition

Nine coal samples from 288 to 301 metres were placed in the desorption laboratory and these recorded raw gas contents ranging from 4.2 to 7.0 scm/t (average 5.3 scm/t).

The desorbed gas was chromatographically analysed and contained 99% Methane (on an air and nitrogen-free basis).

Following normal water removal, this gas composition is essentially of pipeline specification.

From a technical perspective, three Injectivity Fall Off Tests (IFOT) were conducted in the well, and whilst it was possible to maintain packer seats, because of the highly fractured nature of the coal and surrounding lithologies, no buildups were possible.

Very high fracture permeability was inferred from this, but not proven.

In providing some detail and relevance around the technical procedures undertaken at Yangir 2, managing director Neil Young highlighted the key takeaways in saying, “Elixir’s ‘rinse and repeat’ model for the repeatable and low cost discovery and appraisal of gas on the Mongolian/Chinese border continues to roll out in 2021.

"Especially pleasing recent news is the pipeline specification gas (and strong gas content) from Yangir-2."

Analysis of the results of Yangir 2 will be completed before planning the next appraisal steps in what appears to be a highly gaseous but structurally complex depocentre.

Just weeks away from targeting a new well

The ErdeneDrilling rig that drilled Yangir-2 now moves some 60 kilometres to the east to the Temee 1S well where the target is coals interpreted from previously recorded/interpreted 2D seismic amplitudes.

Another drilling rig, from a new Mongolian drilling contractor will move to the Cracker-1S well location in the next few weeks, targeting another new depocenter in the north-west of the PSC.

The company’s 2021 2D Seismic Program has also just commenced, comprising of 220 kilometres of 2D seismic, making it the largest Elixir has undertaken to date.

Multiple depocentres are targeted, both new and as follow-ons to the seismic work in previous years.

Management has been undertaking a number of measures in order to maintain a ‘’business as usual’’ approach despite ongoing community transmission of COVID-19 in Mongolia.

These have included vaccinations for staff and contractors, as well as strong isolation procedures in the field, ensuring full compliance with all government directions.


View Our Investment Portfolios


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!

X