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ASX ANNOUNCEMENT Elixir Energy ASX : EXR 29 OCTOBER 2021 QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 30 SEPTEMBER 2021 HIGHLIGHTS • Highly encouraging results from early stage production testing at Nomgon • Elixir's ongoing exploration program adds another coal bearing sub - basin at Richcairn • Recently announced hydrogen strategy underpinned by MOU with the Government MANGAGING DIRECTOR'S REPORT TO SHAREHOLDERS FOR THE QUARTER _ The global energy sector has seen widespread extreme prices – particularly for gas – in the last quarter . The reasons for this are multiple , interactive and complex . In our view , Elixir can draw considerable comfort that these drivers are highly supportive of the Company's strategy to explore for gas - and our complementary hydrogen production opportunity - just North of the Chinese border in Mongolia . What is commonly called the " energy transition " from the current fossil fuel dominated global energy supply matrix to one that will need massive amounts of carbon neutral energy supplies will be long and disruptive . The current very high prices show the consequences of this in commodity markets and the impact of COVID in numerous areas has exacerbated the issue materially . Recent events have ranged from : poor wind conditions in Europe ; hurricane related reductions in US oil and gas supplies ; disruptions to the maintenance of Russian gas supply infrastructure ; faster than expected energy demand increases ; stronger than normal OPEC production discipline ; strong Chinese policies to reduce local pollution levels ; etc. We draw out the following conclusions for Elixir : - 1. The desire for reliability of energy supply will have been strengthened – and in our view China would view very nearby Mongolian gas resources as presenting much less supply risks than further flung alternatives . 2. The role of gas as a long term bridging fuel to support the introduction of ever more intermittent renewables has been reinforced . 3. Notwithstanding the evident growing pains , the energy transition will not be held back – and Elixir's hydrogen strategy takes advantage of the laws of physics rather than wishful thinking - namely that supplying hydrogen to China will be massively advantaged by immediate proximity . elixirenergy.com.au