High Grade Metals is making the move into coal seam gas (CSG) exploration after securing an agreement to acquire Jade Gas.
Jade’s key asset is a 60 per cent interest in a joint venture with the Mongolian State-owned enterprise Erdenes Methane.
The company holds a production sharing agreement with the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) to explore and exploit CSG over the Tavan Tolgoi.
Jade is an Australian company that focuses on CSG potential in Mongolia, with its current activities located in the South Gobi region, 200km from the border of China.
In May 2019, Jade secured an investment agreement with Erdenes Methane and formed a joint venture with Khangad Exploration in August 2019.
Under the agreement with Erdenes Methane, Jade must sole fund the project to the completion of a definitive feasibility study, at which both parties must continue to fund the project on a pro rata basis.
In addition, Jade must also fund the Khangad Exploration project to a definitive feasibility study through their joint venture.
High Grade Metals has advised that it understands that Jade is pursuing additional development opportunities, which may take the form of more joint ventures or applications exploration licences in Mongolia.