Elixir Energy Limited (ASX:EXR) has released highly promising news regarding its much anticipated Nomgon-2 appraisal well being drilled in Mongolia.
Investors were taken with the positive outcomes from Nomgon-1, and with management flagging drilling results for the end of July/early August there has been exceptional interest in the stock with its shares more than doubling in July from 3.7 cents to reach an all-time intraday record high of 9.5 cents, before closing at 8.4 cents.
Shareholders won’t be disappointed as total depth of the Nomgon-2 well was recently called at 550 metres, and logs have been run, measuring 91 metres of net coal in the well.
The main “100 series” coal seam was measured as having 51 net metres of coal.
Highlighting the quality of results to date in comparison with those achieved at Nomgon-1, Elixir’s managing director Neil Young said, “We are delighted with the results to date of the Nomgon-2 appraisal well, which has a thicker overall coal tally even than the exceptionally thick coals at Nomgon-1, and has added materially to the confirmed areal extent of the Nomgon-1 discovery.
It is therefore an important well in terms of adding to our contingent resource asset base and setting a great foundation for the ongoing appraisal work in the Nomgon sub-basin.
The Board’s congratulations goes out to our in-country team for a safe and seamless operation even under current COVID-19 limitations.”
More data, more share price action
The measurements are vertical intersections along hole, on the southern limb of the Nomgon syncline.
Gas content from numerous cores taken from the well is currently being measured in an on-site laboratory.
Preliminary results to date are consistent with the Nomgon-1, and the “raw” gas content numbers will be announced in the weeks to come.
The final “dry ash free” (DAF) figures, and the results of adsorption analysis, will follow thereafter, as the current logistics of cross border laboratory tests allow.
Down-hole permeability testing has been undertaken using an “injectivity fall off test” (IFOT) process, as was used at Nomgon-1.
Six separate tests have been successfully run so far, and results from these will be announced in the coming weeks.
The next phase of the company’s appraisal program in the Nomgon sub-basin will comprise the drilling of further step-out appraisal wells.
The first well will test the northern limb of the Nomgon syncline, and these wells will be low-cost stratigraphic wells with various objectives and with a range of risk profiles.