TMK Energy Limited announced that it has signed a cooperation agreement with Mongol Alt LLC expanding the level of cooperation between TMK and one of Mongolia's large and successful group of private companies. The MAK Group of Companies currently owns and operates the coal mining lease on which TMK is undertaking its first Pilot Well Program on the Gurvantes XXXV Coal Seam Gas Project. The MAK mine is a large energy user in the Nariin Sukhait region and also has a high demand for water which is a valuable resource in the South Gobi Desert.

The agreement represents a key milestone for the Gurvantes XXXV Project as it will lead to significant efficiencies in the Pilot Well Program as well as providing a clear pathway to early commercialisation by providing electricity to one of the largest users in the area. Subject to regulatory approvals and anticipated strong gas production rates, the gas produced from the three pilot production wells will be used for modular power generation (1MW - 10MW) which will be sold to MAK at the prevailing local wholesale price. Without such an agreement, the gas produced from the Pilot Well Program would be required to be flared.

This initiative and agreement with MAK allows for an environmentally sensible and commercially attractive way to utilise the gas produced from the Pilot well Program.TMK has also agreed to provide MAK with the water it will produce in the early stages of operation its Pilot Well Program. This is beneficial to both parties as it removes the requirement for TMK to build and operate separate water storage and handling facilities and allows for the beneficial reuse of the water by MAK. MAK has agreed to provide TMK with access to its heavy machinery and support equipment and personnel (at commercial rates) which will greatly assist TMK in the construction activities of the Pilot Well Program, and in particular, the construction of the drill pads and associated facilities.