Investors have jumped on board Elixir Petroleum on news it will acquire Mongolian-focused coal bed methane company Golden Horde for around $3.6 million.

The stock (ASX:EXR) soared as much as 82 per cent on Tuesday to an intraday high of 8.2c before cooling to 7.2c — still up 60 per cent for the day.

Elixir has an exclusive option to buy Golden Horde for 79 million shares, which prices the deal at around $3.6 million based on yesterday’s closing price of 4.5c.

The prize is Golden Horde’s production sharing contract with the Mongolian government which, if awarded, will grant Golden Horde the right to explore and develop coalbed methane in what is considered one of the most prospective basins in Mongolia.

The contract covers land surrounding one of the world’s largest producing thermal coal deposits Tavan Tolgoi, which had 14 million tonnes of coal in 2016, Elixir said.

Golden Horde is awaiting final approval from the Mongolian government. The final award of the contract is a key condition precedent of the deal.

Elixir cautioned shareholders that there was no guarantee when or if the contract would be awarded given the extensive regulatory approvals required.

In the event approval occurred quicker than anticipated, Elixir secured the exclusive option to purchase Golden Horde for $25,000. The option lasts through to 30 September 2018.

Acquisition was subject to a $1.6 million capital raise by Elixir which was successfully completed today. Shareholders will vote on the acquisition at the 2017 annual general meeting.

Golden Horde managing director Neil Young will join the Elixir board as CEO and executive director once deal has been completed.

In meantime, Elixir will begin planning activities and studies over coming weeks including defining the prospective resource over the PSC area.

Elixir has a market cap of around $12 million.