Two out of eight ain't bad

OF THE eight licenses held in Mongolia by Draig Resources and its joint venture partner, Trinity Mongolia, a recent exploration program has confirmed coal-bearing sediments within two of the areas.
Two out of eight ain't bad Two out of eight ain't bad Two out of eight ain't bad Two out of eight ain't bad Two out of eight ain't bad

Drilling being undertaken at Draig's Teeg licence.

Staff Reporter

The Australian-listed, Mongolia-focused explorer undertook an extensive exploration program on the licenses during the second quarter, with the objective of confirming the prospectivity of target areas for coal.

As well as its exploration program during the quarter, Draig also gained a 16% interest in Trinity through an acquisition agreement that closed on July 24.

The interest was acquired in exchange for 852,587 shares in Draig, or about 1.3% of the shares on issue.

Costs were slashed from Draig’s administration expenditure, down to $A281,000 from $608,000 in the previous quarter and $1.3 million in the December 2012 quarter.

“The board is cognisant of the company’s cash position and is seeking to preserve this as best

as is possible,” Draig said in its quarterly results released Thursday.

“To this end, it has recently instigated a further reduction in employees and a reduction in salaries for the remaining staff.”

Draig closed the quarter with a net loss of $590,000, a cash balance of $3.4m and no debt.

During the quarter’s exploration program, work at the Teeg and Urtnii-Am licenses in the Ovorhangay region proved successful, after a combination of mapping, magnetic surveying, trenching and rotary air-blast drilling (RAB) confirmed coal-bearing formations.

Seventeen holes were sunk with a total 500m drilled. Coal was present in three of these, for a total length of 61m.

“These positive results, together with the existing 47 drill holes and other geographical work, provide the foundation for the next stage of exploration for these licenses,” Draig said in an exploration update Monday.

Unfortunately, exploration on the company’s other licenses was less successful.

At Khongor, mapping and trenching did not identify coal-bearing sediments, RAB drilling was challenging in the eastern area and two polycrystalline compact drilling holes did not intersect coal.

At the Gurvantes licence, a planned exploration program was cancelled upon a discouraging examination of the surface geology.

At Zamt Uul, magnetic work and one PCD drilling hole were undertaken to determine the presence of coal. The magnetic survey lines did not identify any potential drilling targets and the PCD hole did not intersect potential coal-bearing sediments.

No exploration work was undertaken at Ergen Us, Shavan and Olom Bui.

Draig said its board would consider plans for further exploration within the two promising licence areas and continue to assess the coal potential of the others.

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