Highlights

  • Jade Gas has secured approval for its maiden gas reserves from Mongolia's Minerals Reserves Council, marking the first-ever Natural Gas reserve approval in the country's history.
  • The milestone enables submission of the Plan for Development and Operations (PDO) and paves the way for a future Production Licence application.
  • The approved reserves represent only a small portion of the TTCBM Project, highlighting the broader development potential across the project area.

Jade Gas Holdings (ASX:JGH) has achieved a significant regulatory milestone with the approval of its maiden gas reserves by Mongolia's Minerals Reserves Council (MRC). While the company's shares traded slightly lower at AUD 0.084 on 1 June 2026, down 2.33%, the announcement represents one of the most important developments in the company's history and a landmark event for Mongolia's energy sector.

The approval establishes the first officially recognised natural gas reserves in Mongolia and moves Jade Gas closer to commercial development of its flagship Tavantolgoi Coal Bed Methane (TTCBM) Project in the South Gobi region.

Historic Milestone for Mongolia's Energy Industry

The reserve approval represents a first for Mongolia's emerging natural gas sector.

While Mongolia possesses significant coal resources and Mining activity, commercial coal seam gas development remains in its early stages. Jade Gas has spent several years conducting exploration, appraisal drilling, testing programs, and development studies across the TTCBM Project area.

The MRC's approval formally validates a portion of the project's gas reserves under Mongolia's regulatory framework.

This milestone follows approval of the company's appraisal report in April 2026 and marks another step in transitioning the project from exploration toward commercial development.

Importantly, reserve approvals are a prerequisite for several future regulatory processes, making the decision particularly important from a project advancement perspective.

Understanding the Reserve Booking

The approved reserve booking covers only a relatively small section of the broader TTCBM Project.

Specifically, the reserve assessment relates to approximately 4.2 square kilometres of the Red Lake Field within a project area covering roughly 60 square kilometres.

The approved reserve estimates include:

  • Gross 2P recoverable gas of 316 million cubic metres.
  • Gross 3P recoverable gas of 793 million cubic metres.
  • Net 2P recoverable gas attributable to Jade of 165 million cubic metres.
  • Net 3P recoverable gas attributable to Jade of 384 million cubic metres.

The reserves are associated primarily with Seam IIIb, one of several gas-bearing coal seams identified within the field.

Management emphasised that the reserve booking does not include other gas accumulations within the TTCBM Project, including the Vista and Brownhill areas, which remain classified as prospective resources.

As a result, the current reserve figures represent only a portion of the project's broader resource potential.

Conversion of Resources Into Reserves

One of the most important aspects of the announcement is the conversion of previously reported contingent resources into formally recognised reserves.

In the resource development process, reserves generally represent a more advanced stage of project Maturity than contingent resources because they are supported by additional technical, regulatory, and commercial evidence.

Over recent years, Jade Gas has expanded drilling and testing activities significantly.

The original contingent resource estimate released in 2022 was based on data from only four core holes. The project has now been assessed using information gathered from 19 core holes, 105 kilometres of seismic data, production testing, gas content measurements, permeability studies, and extended dewatering programs.

The company reported sustained gas flows from pilot production wells, while gas composition analysis confirmed methane concentrations exceeding 97%.

These technical achievements provided the foundation for the reserve conversion process.

Development Pathway Becomes Clearer

The reserve approval allows Jade Gas to progress toward the next stage of development.

The company intends to submit its Plan for Development and Operations (PDO), which will outline the technical and operational framework for commercial production.

The PDO is expected to cover infrastructure design, production forecasts, environmental management, and development sequencing.

Phase One of the development concept includes up to 175 wells and is designed as a modular project focused primarily on supplying liquefied natural gas (LNG) to Mongolia's transport sector.

Additional opportunities include supplying gas to mining operations and industrial users.

Longer term, the broader development concept contemplates approximately 800 wells and a project life exceeding 30 years.

The scale of the proposed development illustrates the long-term ambition associated with the TTCBM Project.

Commercial Discussions Continue to Advance

Alongside regulatory progress, Jade Gas is continuing commercial negotiations with potential project partners.

Management reported positive engagement with both domestic and international counterparties following a recent board visit to Asia.

These discussions include potential energy buyers, infrastructure providers, and strategic partners that may participate in future project development.

Commercial partnerships remain an important element of the company's strategy.

Developing a large-scale coal seam gas project requires substantial Investment in infrastructure, processing facilities, transportation systems, and field development activities.

The reserve approval may strengthen the company's position in ongoing negotiations by reducing regulatory uncertainty and demonstrating progress toward commercialisation.

Financing Potential Improves

One of the less discussed but potentially significant outcomes of reserve recognition is its impact on financing discussions.

Resource projects often require multiple stages of validation before attracting external funding.

The approval of reserves by the Mongolian authorities provides an independently recognised basis for future project development plans.

Management noted that both the approved appraisal program and reserve booking support efforts to secure project financing for field development and associated infrastructure.

As the project advances toward production licensing, financing discussions may become increasingly important to investors assessing future development timelines.

Broader Resource Potential Remains Significant

Although reserve approval represents a major achievement, much of the project's potential remains outside the current reserve booking.

The updated contingent resource estimate for the Red Lake area includes:

  • Gross 2C contingent resources of 5.4 billion cubic metres.
  • Gross 3C contingent resources of 11.1 billion cubic metres.

These figures indicate substantial additional gas volumes that may be upgraded through future drilling, testing, and development activities.

Beyond Red Lake, the Vista and Brownhill fields continue to hold prospective resources that remain subject to further evaluation.

This broader resource inventory provides additional exploration and development opportunities over the longer term.

Conclusion

Jade Gas has achieved a landmark milestone with the approval of Mongolia's first-ever natural gas reserves, marking a significant step in the development of both the TTCBM Project and the country's emerging gas industry. The approval enables progression toward development planning, production licensing, and future commercial operations. While the approved reserves cover only a small portion of the broader project area, the achievement substantially reduces regulatory uncertainty and highlights the scale of the opportunity ahead. As Jade Gas advances permitting, financing, and Partnership discussions, investors will be closely watching the company's ability to convert technical progress into commercial development outcomes.