Jade Gas Resumes Drilling At BNG Project In Mongolia To Upgrade Resources

Jade Gas Holdings Ltd (ASX: JGH) has resumed its drilling campaign to complete the remaining five of eight prospecting wells at the Baruun Naran area (BNG), adjacent to its flagship TTCBM Red Lake Project in Mongolia.

High potential for gas-bearing coals

The gas exploration company focused on the coal bed methane (CBM) potential of Mongolia believes the BNG Project has a high potential for gas-bearing coals.

Jade is advancing the BNG Project with joint-venture partner Khangad Exploration LLC, a subsidiary of Hong Kong-listed Mongolian Mining Corporation LLC (HKEX:975).

The first three of eight prospecting wells at BNG were successfully drilled and reported last year, with the BNG-3 well recording the second thickest gassy coal interval to date of 104.6 metres.

Drilling for the remaining five wells has commenced with the first well BNG-4 spudded with a target depth of 900 metres.

It is planned that the five wells will be completed within Q2 2024.

Converting prospective resources to contingent resources

Further drilling success at BNG is expected to support the conversion of 2U Prospective Resources to 2C Contingent Resources in the existing BNG permit.

The drilling success will also importantly provide an accelerated pathway to securing a long-term Production Sharing Agreement (PSA) over the permit area.

Ultimately, this will provide Jade with two significant energy projects in the South Gobi region at a time when clean energy demand is growing from multiple customer markets.

Busy drilling schedule

The resumption of drilling at the BNG Project has kicked off Jade’s 2024 field activity program after a pause for the winter.

The company’s partner, Mongolian Mining Corporation – a very large energy user, is eager to see this field developed as fast as possible to enable it to reduce reliance on imported diesel for its operations.

With a busy drilling schedule over the next few months, Jade hopes to expedite the appraisal phase and move the JV one step closer to production.

Jade Executive Chairman Dennis Morton said: “The BNG Project is growing in importance as a solution for the energy shortage in the area.”

In the previous quarter, Jade closed an A$11 million financing secured with the company’s strategic shareholder, UB Metan LLC (UBM), via the issue of unsecured convertible notes at a 22% premium to the share price on 31 October 2023.

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