Jade Gas Holdings Ltd (ASX:JGH) has completed prospecting work at its Baruun Naran coal field (BNG) in Mongolia, intersecting up to 49.85 metres of gassy coal in one well and 45.32 metres in another.
Initially, Jade had planned to drill eight wells during the campaign, but instead reduced it to seven upon finding that there was enough data recovered to begin the process of assessing and upgrading the resource in preparation for a PSA application.
BNG – which is located adjacent to Jade’s flagship project in the Tavantolgoi basin (TTCBM Project) – previously reported highest gassy intersection of 104.6 metres, back in December.
A crucial aspect of development of BNG is the MOU which Jade signed with Mongolian Mining Corporation LLC (MMC) in February which would involve the use of gas from this project and TTCBM being used to supply MMC’s power needs for local mining operations.
In addition, the gas would also be a fuel source for MMC’s fleet of trucks which move product from two mines to the Gashuunsukhait-Ganqimaodu (GS-GM) border port in China.
Executive chairman Dennis Morton said the results were another important step for the joint venture and would be followed up with an appplication for a PSA over the BNG permit area.
“The high gas results at BNG give us a potential second key energy project in Mongolia’s South Gobi region, which, importantly, has a large customer market attached to it through our partnership with MMC,” he said.
“Jade’s primary focus remains on accelerating commercial gas production at the adjacent Red Lake area in the short term as we develop the BNG resource in parallel with MMC which will have significant value in use for their business.”
Jade has been trading at 4 cents.