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TMK raises cash to chase more gas in Mongolia www.thewest.com.au
Perth-based oil and gas explorer TMK Energy has raised nearly $6 million from sophisticated and institutional investors to accelerate and expand its exploration drilling program at its promising coal seam gas project in Mongolia’s South Gobi Basin.
TMK is reporting firm commitments for $5.7 million, before costs, by way of a private placement and says the move is strongly supported by new and existing sophisticated and institutional investors in addition to its own board members.
Company director Professor John Warburton subscribed for four million shares, with fellow director Tim Wise taking up 1.5 million – with both packages subject to shareholder approval at the company’s annual general meeting next month.
TMK will issue more than 393 million shares at an issue price of 1.45 cents per share, representing a 19.4 per cent discount to the company’s last traded share price before it went into a trading halt on Tuesday. The new shares will come with a free attaching option on a 1-for-2 basis, at a strike price of $0.025 that expires on April 30, 2026.
The company says the capital raising plan has the support of its three biggest shareholders. The biggest of those, Tsetsen Zantav, has agreed to enter a voluntary selling restriction for six months following the issue of the new shares. That holding will represent 19.98 per cent of TMK’s outstanding shares immediately following the placement.
The funds generated by the placement will enable the company to later this year launch an expanded exploration drill program at its Gurvantes XXXV coal seam gas project, which sits virtually on the Chinese border in Mongolia’s south.
The program will target areas with known coal to the east of the central Nariin Sukhait area, which was the focus of TMK’s successful maiden exploration program last year that delivered a gross 1.2 trillion cubic feet contingent resource (2C).
Gurvantes XXXV covers about 8400 square kilometres of what TMK says is one of the most prospective CSG basins in the world. Within the area there are six active coal mining operations, 26 coal mining leases and many coal exploration licences, which together have defined a substantial coal resource.
The Gurvantes XXXV project is a joint venture with ASX-listed Talon Energy, which became involved when it signed a US$5 million ($7.44 million) farm-out agreement with Telmen Energy in January, 2021. In February last year, TMK Energy (formerly Tamaska Oil and Gas) acquired Telmen and its 100 per cent interest in the project.
The exploration program is planned to commence in early Q3 of 2023 after the completion of the drilling of the three production wells currently being drilled in the Nariin Sukhait pilot well program.
TMK Energy chief executive officer Brendan Stats
Mr Stats predicted the coming months would constitute an active and exciting period for the company as it progressed the project through key development milestones. TMK believes there are multiple opportunities to market the project’s natural gas, particularly to several large-scale mining operations with high energy requirements in the South Gobi area.
There is also a big market for gas in China and the project is close to an extensive Northern China gas transmission and distribution network.
TMK says the area of the project boasts thick high-quality coal seams outcrop at the surface, extending along an east-west strike for about 150km. With the company granted a 15-year exploration licence in September 2021, it has both the time and incentive to continue chasing more CSG in the South Gobi Basin for a while to come.
Published Date:2023-04-20
