The Elixir Energy Ltd (ASX: EXR) share price is surging forward during early afternoon trade on Thursday. This comes after the energy producer released an update in regards to its hydrogen strategy.
At the time of writing, Elixir Energy shares are up 5.36% to 29.5 cents apiece.
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What did Elixir Energy announce?
In a statement to the ASX, Elixir advised progress is being made on its recently announced hydrogen project in Mongolia.
Elixir executed a memorandum of understanding (MOU) with Mongolia's Ministry of Energy to investigate the opportunity for a hydrogen project.
Under the framework, the Ministry will be responsible for maintaining security, stability, and efficiency in the energy sector. In addition, the department will seek to develop the new source of energy.
Elixir will work with the Mongolian government to bring forward expertise in the hydrogen economy in technical, legal, and commercial areas.
The news follows the company's commissioned independent report earlier this month from energy analyst, K1 Capital. The report evaluated the wind and solar resource potential of Mongolia's South Gobi region in regards to the production of green hydrogen.
It estimated a combined wind and solar utilisation of 79% for Elixir's project location. In comparison, the Southern Goldfields is generally between 50% and 60%, with the Pilbara region in Western Australia about 45%.
This means that a location with a capacity factor of 79% will produce around 60% more hydrogen from the same capital investment than an area with a 50% capacity factor.
A number of contributors underpin the high-capacity factor in the South Gobi region. They include very high wind speeds along with a cold climate supporting enhanced solar efficiencies.
Management commentary
Managing director Neil Young spoke about the news possibly fuelling the Elixir Energy share price today:
We are very pleased to be working with the Mongolian Government to investigate the potentially world class green hydrogen potential of the country.
The K1 Capital report supports our thesis that the South Gobi region of Mongolia has such potential – not only given its location immediately proximate to markets, but also its superb renewable resources. The wind and solar combination in our project area are as good as we have seen anywhere.
About the Elixir Energy share price
Over the past 12 months, Elixir Energy shares have registered gains of almost 130%. In contrast, the All Ordinaries Index (ASX: XAO) has travelled around 20% higher in the same time frame.
Elixir has a market capitalisation of roughly $267.3 million, with approximately 891 million shares on hand.
