Next Investors logo grey

Elixir progressing towards important resource assessment


Published 25-NOV-2019 10:34 A.M.


2 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

It was just a week ago that Elixir Energy Limited (ASX:EXR) announced the spud of its Ugtaal-1 well, part of the group’s 2019 drilling program at its 100% owned Nomgon IX coalbed methane (CBM) production sharing contract (PSC) in Mongolia.

Since then, the company’s shares have rallied some 15%, buoyed by the potential outcome of the drilling campaign which is aimed primarily at drilling two fully tested core holes (with an option for a third), the results of which will feed into a contingent resource assessment in 2020.

The hole is now more than halfway towards its targeted depth, and establishment of a contingent resource assessment would be crucial for Elixir given that companies’ share prices often realign according to the implied value of the resource assessment.

The core-holes are targeting Elixir’s developed CSG leads, which were defined by surface outcrop, gravity and 2D seismic mapping.

EXR site

Gas observable to the naked eye

Ugtaal-1 has reached a depth of 324 metres, and to date the on-site well geologists have noted net coal thicknesses of 20.6 metres.

Logging will confirm a final coal thickness number once the well has reached its target depth of 600 metres.

Similar to the recently drilled BO-CH-1 well, the presence of gas in the system is observable to the naked eye, prompting management to mobilise specialists from Australia to undertake the permeability testing once the well reaches its target depth.

Management said that coal cores have been placed into canisters and that the desorption process has commenced in the on-site laboratory with numbers likely to become available in approximately 60 days.

Commenting on these developments, managing director Neil Young said, “We are pleased to report that the Ugtaal-1 core-hole is meeting its objectives of encountering thick coal seams which have provided initial samples from which we will be able to accurately measure gas content and composition.”

Elixir also said that analysis had commenced on encouraging findings from the BO-CH-1 chip-hole, which demonstrated gas in the system, coal seams of a thickness which are productive in Australia and natural fracturing which may support good permeability.

Also, the BO-CH-2 chip-hole reached 574 metres as at Sunday morning, and from a geological perspective management noted that it is still in the Triassic section.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (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 and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.