TMK Energy Limited (ASX: TMK) ("TMK" or the "Company") is excited to announce a strategic Exploration Cooperation Agreement with Australian-led Terra Energy LLC ('Terra'). The partnership aims to accelerate exploration activities in the Gurvantes XXXV CSG Project area, located in the South Gobi Basin of Mongolia.
About the Partnership
Terra Energy is the owner and operator of the Baruun Noyon Uul Coal Mine, situated within the same Gurvantes XXXV Project area. Both companies will collaborate to execute a comprehensive exploration program, which has already commenced. The collaboration entails drilling and seismic acquisition programs with the cost and resources split equally between the two parties.
TMK Energy holds a 67% stake and operates the Gurvantes XXXV CSG Project, with the remaining 33% held by Talon Energy.
The exploration program is designed to include a minimum of four fully cored exploration wells. These wells will be drilled and tested for Coal Seam Gas (CSG) in the already well-defined coal-bearing deposit in the Gurvantes XXXV Project area.
Terra initiated the drilling program, leveraging contractors already under its employ. Subsequent testing activities related to the project will be managed by TMK.
TMK and Terra will share drilling and seismic costs on a 50/50 basis. Additional costs exclusively associated with CSG exploration will be borne 100% by the Gurvantes Project partners. Any other testing work required specifically for coal mining operations will be fully funded by Terra.
Term and Future Outlook
The Agreement is set for a two-year term. However, the initial exploration phase is expected to complete within approximately two months. Further exploration may ensue depending on mutual benefits and will be governed by the same Agreement.
Leveraging Expertise for Synergy
Terra has established itself as an experienced coal mining operator in the South Gobi region, holding several large coal mining tenements. TMK sees this partnership as an opportunity to swiftly and economically acquire vital CSG-related data while fostering relationships with other mining operators in the Project area.
Mr Brendan Stats, TMK Energy’s Chief Executive Officer commented:
“With drilling and construction of our pilot well program now complete, we have taken advantage of what is a very timely opportunity to immediately commence what could be another high impact, lowcost exploration program over an area which already has an extensive data set and where we know that coal targets are present.
We are pleased to have entered into this Agreement with Terra Energy so quickly which will assist our efforts in accelerating an exploration program in this area. Terra is an Australian led mine operator, and we both share very similar values with respect to running a safe and efficient exploration program.
With the drilling program already commenced, we hope to have the opportunity to further add to our already significant 2C contingent resources identified at the Nariin Sukhait if further CSG resources are identified in this exciting new area.”
Mr Matthew Crawford, Terra Energy Executive Director commented:
“We are pleased to enter into this co-operation agreement with TMK, which is committed to developing its assets in the South Gobi region of Mongolia. Terra is an expanding mining company and we view this relationship as an important step forward for Terra in the development of the Baruun Noyon Uul coking coal resources.
The potential discovery of commercial CSG methane deposits within our mining licenses may offer strategic benefits to Mongolia and for Terra, the ability to expand our coal production and to lower our operating costs in the years ahead by replacing diesel consumption with locally sourced methane gas.”
TMK Energy Limited is listed on the Australian Stock Exchange. TMK is led by an Australian and Mongolian team bringing together the expertise and experience to develop the Gurvantes XXXV CSG Project