In January 2021 Talon executed an agreement with Mongolian Company, Telmen Resource JSC (Telmen), to earn a 33% interest in a proposed Production Sharing Agreement (PSA) over the Gurvantes XXXV Coal Seam Gas Project located in southern Mongolia.
The Gurvantes XXXV PSA was approved by the Mongolian Government in early July 2021, and formally awarded to Telmen later in the month.
In September 2021 Telmen was granted an exploration license over the Gurvantes XXXV Project, with an Environmental Impact Assessment subsequently approved in February 2022, both of which facilitated the commencement of exploration work at the Project in Q1 2022.
During September 2021 an exploration license granted to Telmen, which has facilitated the commencement of exploration work at the Project in early 2022.
The Gurvantes XXXV PSA covers a significant area of 8,400km2 and is in, what is considered one of the most prospective coal seam gas basins globally. Gurvantes XXXV is situated less than 20km from the Chinese-Mongolian border and close to the extensive Northern China gas transmission and distribution network. It is also proximate to several large-scale mining operations with high energy needs. Gurvantes is therefore ideally placed for future gas sales to satisfy both local Mongolian, as well as Chinese, energy requirements.
Exploration activities at Gurvantes XXXV commenced in Q1 of 2022, with the exploration program to include the completion of 4 fully tested cored holes within the western portion of the Gurvantes XXXV Project area, located in the region of Nariin Sukhait. Narrin Sukhait has a number of active open cut coal mining operations and has been extensively explored for coal over the last 15 years. The area is known to contain two very thick, high quality, coal seam groups, and preliminary coal seam gas data acquired from a series of 5 wells indicates high gas contents.
The drilling program aims to intersect the thick coal seams at suitable depths for coal seam gas development, and complete the first comprehensive testing program to further define the significant potential of the Project. The drilling program is the first step in the process of upgrading the independently certified 5.96 TCF (2U risked) Gross Prospective Resource to Contingent Resources. This will be a major milestone in the potential establishment of a world class gas project adjacent to one of the world’s most important gas markets in China.