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Feature article November 17, 2017:

 

Breakthrough Technology for Lithium Industry Poised to Propel MGX Minerals Valuation

 

MGX's technology was a 2017 finalist for the Most Disruptive Technology in the World award by Katerva.

 

New advanced brine processing technology proprietary to MGX Minerals Inc. solves the problem of magnesium in brine, able to deal with very complex/dirty brines, opening up a whole new world of large lithium resource projects.

 

    

MGX Minerals Inc.

(CSE: XMG)  (OTCQB: MGXMF)

 

Share data, Capitalization, & Corporate info

 

 Shares Outstanding:  ~77.6 million

 Fully Diluted:  ~109M

 Recently Traded: ~CDN$0.97/share (CSE: XMG) (OTCQB: MGXMF)

 52 Week High/Low: $2.75/ 0.14

 Current Market Capitalization: ~$75.3 million Canadian

 Corporate Website: www.mgxminerals.com

 

 

   

Valuation Commentary: MGX Minerals Inc. (CSE: XMG) (OTCQB: MGXMF) is a Canadian-based mining and clean technology processing company focused on commercializing new brine processing technology that gives the Company a significant advantage in the marketplace having solved the problem of magnesium (Mg) in lithium (Li) laden brine, able to deal with very complex/dirty brines. Up until now rich complex Li brine projects with high Mg:Li ratios have been passed over as technology did not exist to economically separate the two. MGX's proprietary/patented technology now positions scores of complex lithium brine projects (previously untouchable) across the globe ripe for production, with better economics than solar evaporation.

 

It has only been since mid-summer-2017 that MGX Minerals Inc. has been able to accept any water for testing at its new pilot plant and demand is off-the-chain from both the petrolithium industry and interested (potentially very large) lithium pure-play stake holders. The Company's first small-scale (750 BPD) commercial rapid lithium extraction system is nearing completion, expected later this November-2017, and the construction of the first full commercial 7,500 Barrels-Per-Day (BPD) system using MGX's technology was announced this November 6, 2017, being made possible by $8.2M in government grants (representing a strong vote of confidence in the technology from the highest levels, and a free ride for shareholders).

 

The share price of MGX Minerals Inc. is poised for significant upward revaluation as the reality of the magnitude of wealth headed shareholders way is appreciated by the market. MGX Minerals Inc. is now active in advancing 3 distinct business lines stemming from what experts agree and results affirm (see Oct. 16, 2017 news "MGX Minerals Processes High Magnesium Content Lithium Brine of 76,000mg/L") is the worlds most advanced brine processing technology:

 

Figure 1. Oil & Gas wellheads..

1) Petrolithium processing; involves capturing oil, natural gas, and minerals from oil & gas industry brine, leaving cleaner water behind. MGX Minerals is deploying the only technology that can deal with ultra-high total dissolved solids plaguing the oil & gas industry. The Company currently has ~20 testing and analysis agreements in place with almost every major oil company in Western Canada and a good number in the US, now talking with the biggest oil and gas companies, from Chesapeake to Shell. MGX Minerals is in the midst of turning out win-win proposals that solve major problems for industry and see MGX as the beneficiary of both significant dollar revenue and Lithium streams (MGX aims to negotiate contracts in the petrolithium sector that result in MGX Minerals keeping control of the lithium product). The company has essentially created its own sub-sector in the industry by focusing on petrolithium, turning garbage into gold. Look for contracts of significance to materialize near-term that cumulatively will light a fire under the share price of MGX Minerals over the coming years.

Figure 2. Lithium laden brine.

 

2) Major Lithium pure-play; MGX Minerals is targeting Li from economic/high-grade brine projects, both complex (e.g. high magnesium) or clean. On a head-to-head basis with solar evaporation lithium analysts in-the-know now agree MGX's technology has superior characteristics of lower capex, better Li recoveries (70+% vs. 40%), lower opex, has a substantially smaller footprint than miles of evaporation ponds, is faster (8 hours end-to-end vs. 18 months), and turns the presence of magnesium on its head -- treating Mg as a valuable commodity that can be extracted for sale, instead of causing a project to be passed over. Many high magnesium lithium projects around the globe (from the Americas to China) are now being revisited because of MGX Minerals technology.  It is a distinct reality now of MGX Minerals being at the center of projects with potential to generate 10s and even 100s of thousands of tonnes per annum of lithium carbonate and lithium hydroxide (the main saleable form of Li used by EV/Li-ion battery manufacturers). Lithium analysts this Mining Journal have talked with have confirmed interest is high regarding MGX Minerals' technology from major Li-industry stake holders. The Company is in the process of setting up a South America sales office in Chile.

Figure 3. Left to right/before to after of MGX's wastewater processing technology; 1) Raw (feed), 2) intermediate chemical ppt, 3) final water prior to desalinization.

 

3) Wastewater handling; MGX is also a clean-tech Company with the ability to treat and reclaim wastewater for the oil & gas industry, unparallel to anything currently in the market. The industry is ripe for technology shift in cost-savings from water handling. MGX can eliminate environmental issues, reduce disposal costs, and reduce the need for acquiring new water. MGX is a major owner (with the rights to acquire 100%) of PurLucid Treatment Solutions which is essentially the engineering, manufacturing, and development arm behind the breakthrough technology MGX Minerals controls exclusively. PurLucid has a contract for reprocessing steam water for oil sands using MGX Minerals technology, the construction of a full commercial 7,500 Barrels-Per-Day (BPD) system is being made possible by $8.2M in government grant (see related November 6, 2017 news) -- this is the beginning roll-out of what we expect will be a robust water-handling business line. This first large-scale commercial plant will also be leveraged for MGX Minerals benefit as a site-visit demonstration facility to propel the lithium side of the business, as this plant will employ the same technology.

 

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Near-term share price target: $5+/share for CSE:XMG ; MGX Minerals Inc. currently has a market cap of ~C$75.3 million (~77.6 million shares outstanding trading at ~$0.97/share), this Mining Journal projects that sometime in 2018 MGX Minerals Inc. will surpass $500M market cap, on its way to much much higher valuation, with little (if any) share dilution -- all translating to a significantly higher share price. The Company has a plethora of NDAs signed and is currently negotiating several commercial contracts. MGX has bulk sample tests from numerous primary sites and proposals are going out, no doubt the Company will land some of those. Over the coming months we expect the markets to witness revenue and lithium streaming contracts generated, and the question will become "How big does this get?" We expect to see a series of good size proposals being accepted, many covering millions of dollars each in lithium. Once MGX surpasses $10 million in revenues the market will start to price in serious projections and any perceived risk will melt away, accelerating valuation. As earnings play out and contracts take off a $1B market cap in 2019 is not unrealistic. The Company has the ability to vertically integrate and partner right now. Look at how fast the second largest Lithium producer in the world came to being what it is, Ganfeng (out of China), they were not even in the Lithium business in 2006. Through a stroke of the pen and negotiations through some good deals, access to capital, and deploying capital well, a multi-billion dollar market cap is possible. There is no doubt shareholders establishing a long position now stand to be richly rewarded from the strategic advantage MGX Minerals Inc. has in its proprietary technology, now at the initial phase of commercialization, and in a marketplace as the only viable solution we are aware of for complex high Mg:Li ratio lithium brines, with exceptional economics, combined with increasing global demand by EV/Li-ion battery manufacturers thirsting to secure supply.

 

Although the main value of MGX Minerals Inc. currently rests in its ownership of disruptive-like technology, the company is also amassing a respectable portfolio of brine holdings. MGX is the largest holder of Li brine holdings in North America, it has ~2 million acres under staking options under a variety of arrangements, and the Company is constantly entering new JV's and deals to acquire more brine where it sees opportunity. MGX has one of the largest exploration programs underway in North America to identify areas of brine, with the big advantage of being the exclusive 100%-owners of unique technology that renders the Mg:Li ratio moot.

 

Marc Burner, MGX Minerals’ Chairman, wants to replicate the success he had with Ultra Petroleum; under his stewardship he took it from ~$10 million market cap to ~$16 billion:

 

Mr. Burner sees that type of potential in this untapped subsector of petrolithium extraction and big-lithium pure-play. He was attracted to MGX Minerals because of his deep understanding of the opportunity, and the fact MGX Minerals exclusively controls the IP to accomplish this. Mr. Burner is a second generation oil-and-gas businessman. His father started a company called Texas Oil and Gas, and when he sold that to US Steel, it was the biggest independent oil and gas company in the world. Mr. Burner's claim to fame is being one of the pioneers of the unconventional oil and gas business. Mr. Bruner was previously the Chairman and CEO of Falcon Oil & Gas Ltd. and served as Ultra Petroleum’s founding Chairman where he was involved in developing the Pinedale Anticline in Wyoming, which is now recognized as one of the largest unconventional natural gas fields in the United States. While serving these companies, Mr. Bruner oversaw negotiations and contracts with global oil and gas companies including Halliburton, Exxon Mobil, Questar Gas and Hess Corporation. In addition, Mr. Bruner founded Pennaco Energy Inc. to explore and develop coal bed methane properties in the Powder River Basin of Wyoming and Montana. In March 2000, the company was sold to Marathon Oil for US $550 million.
 

MGX Minerals has strong management and technical leadership, see the bottom of this article for the CV’s of key people.

 

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Traditionally a high Mg:Li ratio made for problematic complex brine, now (because of MGX's technology) a high Mg:Li ratio can even be seen as better than clean brine as MGX can extract all in situ minerals for sale.

 

Figure 4. Periodic table of elements examples of diagonal relationship. A diagonal relationship is said to exist between certain pairs of diagonally adjacent elements in the second and third periods of the periodic table. It is found that the chemistry of a first-row (second period) element often has similarities to the chemistry of the second-row (third period) element being one column to the right of it in the periodic table. Thus, the chemistry of Li has similarities to that of Mg.

The Back-Story

Why MGX Minerals' technology is so effective & how the Company secured 100%-ownership of the IP

 

In the production of oil and gas a lot of environmentally unfriendly brackish water is produced which cannot be dumped. Besides contamination from hydrocarbons, the brackish water is mineral-rich (primarily salts), however these hydrocarbons and minerals have commodity value if extricated individually and cost effectively, which was not possible prior to MGX Minerals’ petrolithium extraction technology being developed. The presence of magnesium in high levels also presented a problem when attempting to extract lithium as both lithium and magnesium behave similar (sharing a diagonal relationship on the periodic table of elements) making them extremely difficult to separate -- MGX's technology solves this...
 

Sequential separation using specialized floatation and reagent coated nano-filters, each filter attracts its own unique element: Petrolithium technology involves the ability to have oil, natural gas, and now mineral extraction occur all at one well. The process involves complex floatation and nano-filtration technologies, these are new technologies which have only been around for less than a decade since inception, and the natural commercialization of the technology is now hitting the market with MGX Minerals holding the exclusive IP rights. The key to this technology is sequential separation – a specialized coated filter for each element/mineral results in a clean lithium product. Up until MGX Minerals' process, technologies for Lithium extraction focused on isolating the lithium first and foremost (if not entirely) and that made it difficult to obtain a clean lithium product. Now, by having a filter that pulls the sodium, magnesium, calcium, potassium, boron, individually in a specific order clean lithium brine can be obtained from what was once complex. The filter is nothing like a traditional mesh filter, these are reagent coated filters each designed to pull a specific element, it is a nano-filtration technology where the filter itself works like a magnet and attracts specific molecules via design construction and the use of reagents -- each filter attracts its own unique element. As the filter fills up like a regular filter, it backs-up and hits a pressure switch and backwashes into a tank.

 

The core technology was developed to clean up the oil sands (oil sand tailing waste is some of the nastiest on the planet) so it is total overkill when it comes to tackling ordinary oil & gas brine, and that is what is making the technology so much easier to roll-out now. MGX Minerals Inc. is now the only group that can handle ultra-high total dissolved solids; there are no other filtrations that we are aware of that can deal with total dissolved solids beyond 40,000 PPM. MGX can deal with 400,000+ PPM without issue -- all because this was designed for the oil sand tailings. All oil & gas companies ask "how do we cut our water costs and physically reduce water disposal?" -- everyone is looking for long-term water solutions.
 

The process was originally invented by the team at PurLucid Treatment Solutions, a company which MGX Minerals currently owns ~34% of and has the the rights to purchase 100% (in exchange for a relatively nominal amount of stock). MGX already owns 100% of the key technology, having already paid for the lithium and mineral extraction technology and any improvements on that technology in the future, so that value does not exist in PurLucid. But there is serious value in the people/knowledge-base and other technology PurLucid has. Purlucid is a valuable consulting Company at the forefront of water treatment and lithium extraction. The Company has top people in the field; e.g. the chief scientist was the head of R&D for Tervita, the largest water treatment Company in Alberta. When oil had a down turn it a few years ago it was just at the point PurLucid was looking for a corporate partner (as is required by the government to demonstrate/facilitate weaning off of government grants, a private partner was required to apply for more grants), that is when MGX Minerals stepped in. Essentially PurLucid was at the phase that it could qualify for multi-millions and MGX Minerals recognized the value of the technology. PurLucid's invention makes up the front-end of MGX's rapid lithium extraction technology, its the most important part. The people at PurLucid have produced a number of systems in the past and are important for MGX Minerals now, as they are experienced on the engineering side, manufacturing side, development side, and provide guidance on how to commercialize what MGX Minerals now controls.

 

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Superior economics compared to solar evaporation

 

On a head-to-head bases MGX Minerals' Rapid Lithium Extraction System outshines solar evaporation.  At first blush, solar evaporation may seem cheap (letting the sun do the work passively), however its clearly not the case:

 

   - Lower system capex & lower opex;

   - More efficient: 70+% recoveries of Li vs. ~40% for solar evaporation;

   - Faster end-to-end time: ~8hr vs. ~18 months;

   - Much smaller footprint: miles of evaporation ponds are not necessary with MGX's technology;

   - The equipment is modular (containerized) & scalable;

   - Able to handle high Mg:Li ratio;

   - Plus there is the benefit of usable freshened water as an end product.

   

Solar evaporation just doesn't compare in terms of capital and efficiency. Lithium analysts have discussed with this Mining Journal comparative costs with the belief MGX can go head-to-head with solar evaporation at less than 1/2 the capex cost, and less than 1/4 the opex costs. Also because MGX's system is scalable it can be rolled out in phases, scaled-up over time in say US$4M increments (e.g. a 7,500BPD system would cost near ~US$2M for the front-end sequential separation technology, and ~US$2M for the back-end evaporation unit). Depending on grade, say 350 mg of Li/L grade for example, on a single 7,500 BPD system, we calculate >200t of Li-carbonate/year, >US$2,000,000 in revenue/year could be generated (based on a conservative commodity price of US$10,000/t for Li carbonate). In areas where there are high total dissolved solids an operator is also going to have a plethora of low value companion commodities (e.g. boron, sodium, calcium, etc.) which will generate additional kicker revenue. A potentially very profitable undertaking with no massive capital risk. It is such low level of capital required to deploy MGX Minerals system, in most instances it could be facilitated via lease and debt financing, or even potentially off-sheet via JV partners. The ability to advance lithium brine projects in a modular way makes for a very attractive proposition. Larger (big-lithium) MGX Rapid Lithium Extraction System projects may better lend themselves to building-out centralized evaporation infrastructure on the back-end to take advantage of economies of scale. The traditional number for opex for solar is ~$5/barrel, MGX is ~$1/barrel on opex comparison basis for clean brine with only 1 operator required to man the pumps and normal use of reagents. This is what happens when you have a paradigm shift. MGX is using passive filtration technology to process on the fly whereas traditional solar evaporation engineers are having to line miles and miles of ponds, getting lower recovery, it takes close to 2 years to get an end product with solar evaporation vs. residence time in the filters of ~8 hours from end-to-end for MGX.

 
Going beyond petrolithium and targeting big-lithium pure-plays: MGX Minerals Inc. has the petrolithium side of the business tied-down, the Company is going to do very well in petrolithium as it has the only mineral extraction technology possible to deal with what oil & gas companies are looking for. It is just now seeing the first of many new systems that will dominate that sub-sector.  But the 'Fortune-500 money Company-maker' potential for MGX Mineral shareholders is in the lithium pure-play side. MGX Minerals is looking at very large brine sources, inland lakes/inland seas, very large mine tailings fluid scenarios, South America brines, these types of operations can support mass production. When MGX first looked at making its technology work (with petrolithium) it looked at trying to make tight economics projects work, the Company looked at making 70 mg of Li/L work -- that was its break-even for chasing lithium. Then when MGX Minerals started to spread its wings and look around and talk to other lithium companies it recognized that the economics became massively rewarding as the grades increased. MGX is opening its office in Chile as it is well connected there -- it is not unusual to find brines in South America near 500 mg of Li/L. The reason MGX's system becomes so profitable is because as you scale up, things like operator costs (e.g. your labor costs) as a percentage drop and your main costs are reagent and consumable costs, the overwhelming majority of consumable costs are related to minerals/elements other than Lithium. There is not a significant difference in terms of reagents whether you are extracting 70 mg/L or 500 mg/L of lithium, you are still in parts per million, it’s so small. An increase in Lithium grade translate to gains in revenue and adds nothing to costs. 

 

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Below is expanded insight on MGX Minerals Inc., its technology, and holdings.

 

     Content found herein is not investment advice see Terms of Use, Disclosure & Disclaimer

  

 

Recent news releases regarding Company accomplishments and developments:

  

• November 16, 2017 "MGX Minerals Announces Case Lake Lithium Project Drilling Nears Completion".

 

• November 8, 2017 "MGX Minerals Initiates Geophysical Survey at Utah Petrolithium Project, Blueberry Unit, Paradox Basin".

 

• November 6, 2017 "MGX Minerals Engineering Partner PurLucid Awarded C$8.2M to Manufacture and Deploy Wastewater Treatment Systems Central to MGXs Petrolithium Recovery Process".

 

• November 2, 2017 "MGX Minerals’ Joint Venture Partner Power Metals Drills 26.0 Metres of 1.94% Li2O and 323.75 ppm Ta at Case Lake Property".

 

• October 16, 2017 "MGX Minerals Processes High Magnesium Content Lithium Brine of 76,000mg/L Mg; Nears Completion of First Commercial Rapid Lithium Extraction System".

 

• September 28, 2017 "MGX Minerals Appoints Mining Executive Ian Graham as VP Operations".

 

• September 27, 2017 "MGX Minerals Uplisted in United States to OTCQB Marketplace Under Symbol MGXMF".

 

• September 21, 2017 "MGX Minerals Intersects Broad Intervals of Spodumene Pegmatite Mineralization at Case Lake, Ontario Lithium Project".

 

• September 5, 2017 "MGX Minerals Warrants Begin Trading on CSE Under Symbol "XMG.WT.A"".

 

• August 29, 2017 "MGX Minerals Announces Lithium, Magnesium, Silicon, and REE Project Updates".

 

• August 9, 2017 "MGX Minerals Announces N.I. 51-101 Estimated Prospective Oil and Gas Resource for Paradox Basin Petrolithium Project".

 

• August 2, 2017 "MGX Minerals To Acquire Petrolithium and Spodumene-Bearing Pegmatite Project Portfolio from Power Metals Corp.".

 

• August 1, 2017 "MGX Minerals Commences Pilot Plant Testing for Li-1 Lithium Recovery System".

 

• July 19, 2017 "MGX Minerals Commences Drilling at Longworth Silica Project; Targeting High Purity Quartzite Mineralization within Snow Zone".

 

• July 13, 2017 "MGX Minerals Receives Bureau of Land Management Approval of the Blueberry Unit Covering 80,000 Acres of Oil and Gas Leases at Utah Petrolithium Project".

 

• July 6, 2017 "MGX Minerals: Engineering Partner PurLucid Treatment Solutions Announces Patent Filing and Exclusive License for Low Energy Process for Rapid Extraction of Lithium and Other Minerals from Oil Wastewater".

 

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Results affirm the effectiveness of MGX Minerals' technology:

 

The pilot plant has been running since the end of July-2017. The October 16, 2017 news release of first test results demonstrates the effectiveness of MGX Minerals ability to deal with the toughest of brine scenarios;  MGX Minerals took 76,000PPM magnesium wastewater (near 8% Magnesium, much higher than ordinary petrol production or complex brine), note this level does not occur naturally, it was the result of concentrated mine tailings, and managed to reduced it to near non-detectable.  MGX Minerals decided to first extracted lithium from oil sands waste water (evaporator blow-down water, very dirty difficult stuff) because that is what the guys at the lab had around;

 

Excerpt of October 16, 2017 news

MGX Minerals Processes High Magnesium Content Lithium Brine of 76,000mg/L Mg; Nears Completion of First Commercial Rapid Lithium Extraction System

 

VANCOUVER, British Columbia, Oct. 16, 2017 (GLOBE NEWSWIRE) -- MGX Minerals Inc.(“MGX” or the “Company”) (CSE:XMG) (FKT:1MG) (OTCQB:MGXMF) and engineering partner PurLucid Treatment Solutions (“PurLucid”) are pleased to announce advancement in magnesium extraction. The pretreatment removed all of the 76,000 mg/L of magnesium, reducing the post treatment concentration to non-detect levels (<1 mg/L) from lithium brine bulk samples shipped from a U.S. site currently under evaluation.
 

The recent optimization focused on addressing complex brines with very high magnesium levels as well as extraction to a common marketable form of magnesium compound. The magnesium was extracted in the form of magnesium hydroxide. Magnesium hydroxide is a commonly used industrial mineral with primary use in environmental applications such as municipal wastewater treatment and desulphurization of flue gases from power plants. The ratio of magnesium to lithium has long been a major issue in traditional lithium brine extraction and high magnesium has often been prohibitive in the traditional extraction of lithium from brine using solar evaporation / conventional processing as well as selective lithium extraction technologies due to the similarity of molecular properties of lithium and magnesium ions. Work was completed at the PurLucid facility in Calgary, Alberta with independent assay completed by EDS at GR Petrology Calgary, Alberta. The extraction technology continues to rely on previously developed low energy, low cost nanofiltration and is currently covered under patent and patent pending applications.

 

Magnesium in brine, often referred to as hardness in water, has traditionally been one of the major issues in processing of lithium concentrate. The lithium magnesium ratio was traditionally one of the primary factors in consideration of the viability of lithium brine projects. One of the major factors in development of South American brine sources was the relatively low magnesium content.  Alternatively, high magnesium content brine sources have been slow to develop such as those in the United States, China, and the Middle East for this reason,” stated MGX Minerals CEO Jared Lazerson. Adding, “Removal of very high levels of magnesium opens up a large number of global lithium brine sources for consideration that were previously considered too high in magnesium. This represents a triumph of technology over perceived resource quality, in particular, that the magnesium has been extracted in a common form of widely used industrial mineral compound.

 

Magnesium Hydroxide Product
Magnesium was recovered primarily as a hydroxide. The recovered magnesium solids contained potassium, sodium and sulfur due to retention of fluid in the pore matrix. The total amount of these other components was estimated at 22% by weight as hydroxides and oxides. EDS analysis of the solids confirmed that the solids were 71% Mg(OH)2 with 18% NaCl (Table 1) consistent with the entrapment of brine in the mineral matrix. The NaCl can be removed and purity of the magnesium hydroxide product improved by rinsing the product during recovery. Rinsing requires use of fresh water which will be evaluated against the tradeoff of a magnesium product with the above noted contaminants upon evaluation of samples by MGX’s industrial mineral distribution partner.

 

Table 1: Mineral composition interpreted from EDS analysis of recovered Mg(OH)2 solids

Mineral

Percent by weight

Comments

Mg(OH)2

71

%

Solid dewatered in process

NaCl

18

%

Reduction possible with rinsing

SO2 +4

2.7

%

Reduction possible with rinsing

NaOH

1.6

%

Reduction possible with rinsing

KOH

1.7

%

Reduction possible with rinsing

 

Petrolithium™ Commercial System Completed
Buildout of the first commercial brine treatment system for rapid lithium recovery is near completion. The NFLi5 (120 cubic meter per day / 750 bwpd) unit will be ready for deployment in November. Utilizing a recent investment by MGX, PurLucid has opened a new commissioning facility in Sherwood Park, Alberta. The facility will be utilized to assemble and commission units as well as in-house ongoing research and development activities.

 

Wastewater Treatment Units
Water treatment only units for deployment into the Alberta oilfields are currently being fabricated. Three additional commercial units are now being built.  PurLucid expects to deploy the first unit in late 2017 with subsequent units being deployed in early 2018.  Final implementation and planning of commercial system deployment with these operators remains ongoing. Cross applications of technology in water treatment with and without mineral extraction / desalinization continue to be pursued throughout North America with strong interest from oil and gas as well as environmental companies.

 

Optimization of Lithium Extraction
MGX and PurLucid continue to upgrade the brine filtration and pre-treatment cleanup process with a focus on optimizing the final lithium product and upgrading potential by-products including the previously referenced magnesium, as well as boron and potassium concentrates.

 

Commercial Offtake Agreement Status
Lithium chloride recovered from brine has been tested and accepted for upgrade to lithium hydroxide based on previously shipped samples to MGX’s UK based upgrader. Lithium hydroxide is the primary form of lithium used in lithium-ion batteries as an electrolyte.  Additional samples were shipped this week to a major consumer of lithium feedstock for evaluation.  Negotiations remain ongoing for large volume off take.

 

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Construction of the first full commercial 7,500 Barrels-Per-Day (BPD) system using MGX's technology being made possible by $8.2M in government grants

 

Excerpt of November 6, 2017 news

MGX Minerals Engineering Partner PurLucid Awarded C$8.2M to Manufacture and Deploy Wastewater Treatment Systems Central to MGXs Petrolithium Recovery Process

 

VANCOUVER, British Columbia, Nov. 06, 2017 (GLOBE NEWSWIRE) -- MGX Minerals Inc.(“MGX” or the “Company”) (CSE:XMG) (FKT:1MG) (OTCQB:MGXMF) is pleased to report that engineering partner PurLucid Treatment Solutions (“PurLucid”) has been awarded a non-repayable contribution totaling up to C$8.2 million in government funding to support the commercialization of a low energy water treatment system for the oil and gas industry. Specifically, Sustainable Development Technology Canada (“SDTC”) and Emissions Reduction Alberta (“ERA”) have agreed to fund up to $3.2 million and $5 million, respectively. MGX currently owns a 34% interest in Purlucid and has the right to acquire 100% through successive future investments. Working with MGX, Purlucid invented and filed patent applications for apparatus and methods for brine treatment and selective lithium recovery that integrates with the MGX Petrolithium Recovery Process, greatly reducing the cost of recovery and enhancing the quality across the complex range of brines received from oil and gas wells. 
 

Utilizing its exclusively licensed pretreatment technology, Purlucid will fabricate and deploy a commercial-scale unit within an operating steam-assisted gravity drainage (SAGD) facility in Alberta. The project includes participants from oil production companies, a University and a global information technology company. The treatment system, proven in other applications, will be capable of operating at high temperatures and pressures to reduce energy loss while removing oil and mineral contaminants from oilfield wastewater. Several process units in existing boiler feed water treatment plants can be replaced with this single unit, not just in oil production but across thermal industries. Utilizing MGX resources, Purlucid will implement the lithium recovery process as a separate but associated project as early as January 2018.

 

Treatment of wastewater has always been a challenge and significant cost to oil and gas producers; it is also essential to implement petrolithium recovery.” said Dr. Preston McEachern, CEO and Founder of PurLucid. “We’re grateful to receive support from SDTC and ERA in the form of development contributions, to build the first commercial system at an operating oil production facility in Alberta and to demonstrate the large cost and energy savings that can be achieved with these systems. It is exciting, as this opens the door to further processing of the treated water for petrolithium recovery.

 

The system will utilize a highly charged Replaceable Skin Layer (RSL™) membrane and High Intensity Froth Flotation (HiFF) system, known as Nanoflotation, which collectively have demonstrated performance superiority over other processes typically used to remove contaminants. The technology allows high temperature water treatment at 10-30 times the efficiency of existing ultrafiltration systems and offers numerous environmental benefits, including contaminant removal, mineral recovery, reduced energy demand, smaller footprints and lower capital costs. The system is integral to the highly efficient processing of petrolithium brines for lithium recovery. The technology was a 2017 finalist for the Most Disruptive Technology in the World award by Katerva.

 

Extending from success achieved with the Purlucid pilot petrolithium recovery system deployed in August 2017, fabrication of the first small commercial Purlucid lithium recovery system will be completed in December 2017 and ready for use in 2018 on the treated brines from the grant supported project and other MGX brines successfully trialed with the bench-scale and pilot systems.    

 

About PurLucid
Purlucid is a water and wastewater treatment services company comprised of seasoned professional staff from existing large oil and gas service companies. Purlucid's distinct advantage over its competitors is its expertise in the industry and its knowledge of the changing market demand towards water reuse in addition to its technology portfolio that reduces costs and energy consumption while delivering high quality treated water. Purlucid has an active research and development program and its CEO holds academic positions at multiple Canadian universities where he promotes advanced research in water treatment and environmental engineering. Purlucid’s technology development is supported by contract CTO David Bromley, globally renowned for his expertise in water treatment and contributor to several books on the topic. The strong research-driven team at Purlucid developed a low energy lithium recovery process and continues its innovation platform to further advance mineral recovery as part of a water treatment approach.

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Water handling on its own is going to be massive too: In the USA water disposal is now blamed for creating earthquakes in Oklahoma on a magnitude of 1000 quakes/year, up from only 8 quakes/yr ten years ago. At first the earthquakes were thought to be the process of fracking, but now it is believed to be the actual water disposal. The disposal of water is tied to fracking, as fracking increased water use six times and operators end up putting way more water down the disposal holes. The government has stepped in and capped things, grandfathering existing disposal wells, and new production is effectively frozen out. Since government basically went around and froze things in 2016 when oil was low, even if a petroleum company had a field that was permitted for X amount, now that oil prices are higher and the companies want to bring more production online they are limited by not having anywhere to deal with the water. There are a number of fields at half or less production that can’t go higher because of the water handling issue. MGX Minerals is right now working with major oil companies, in discussion, on how to remedy the situation and minimize or eliminate downhole disposal. In Pennsylvania and the Eastern seaboard downhole disposal is now completely banned, but not because of earthquakes, out East they simply do not want to risk dirty water (especially with toxic hydrocarbons) getting into the aquifers.

 

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Lithium holdings of MGX Minerals Inc.

 

Even though many companies are approaching MGX about solution, MGX Minerals is also amassing a host of lithium projects from which to build an empire around on its own.

 

Below is a portfolio summary:

 

Project Location Stage
Paradox Basin Utah Well Testing
Sturgeon Lake Alberta Well Testing
Lisbon Valley Utah Exploration
Fox Creek/Fox Creek West Alberta Exploration
FBV/Stettler Alberta Exploraiton
Stettler/Erskine Alberta Exploraiton
Wimborne Alberta Exploration
Haynes/Erskine Alberta Exploration
Homeglen Rimbey Alberta Exploration
Bonny Glen Alberta Exploration
Leduc Alberta Exploration
Redwater Alberta Exploration
Buck Lake Alberta Exploration
Swan Hills Alberta Exploration
Lower Smoky River Alberta Exploration
Lesser Slave Lake Alberta Exploration
Utikuma Lake Alberta Exploration
Upper Smoky River Alberta Exploration
Pouce Coupe Alberta Exploration
Sand Lake Alberta Exploration
Clear Lake Alberta Exploration
Nipisi Alberta Exploration

See MGX Minerals website www.mgxminerals.com for more details on the above listed individual projects.

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Driftwood Creek Magnesium Project, in Invermere, BC, Canada

 

Besides having the worlds most sophisticated water treatment for complex brine, MGX also has a valuable magnesium deposit as a strategic holding (from before the Company was into lithium).

 

MGX Minerals Inc. has been in the industrial mineral space for ~5 years, and before its opportunity in lithium the company was advancing its magnesium property near Invermere BC, about 1.5 hrs from Calgary Alberta. The deposit is formidable and currently sits at ~8Mt Measured and Indicated of Magnesium carbonate equivalent.

 

The PEA is almost done, and the deposit is a major asset of the Company that over time will be worth quite a bit. The in situ value of Magnesium oxide is ~$1.4 billion to $1.5 billion, its extremely high-grade; ~43% average grade. The eventual mine would operate much like a cement operation; have a quarry, have kilns for the calcination of the magnesium carbonate, put it in rail cars, and get ~US$400/t to $US450/t for the magnesium oxide.

 

  • Established Mining District: Resides in Driftwood mining district 164 kilometers north of Cranbrook, B.C.
  • Production Profile: 20-year Mining Lease approved; 100-tonne bulk sample completed; PEA underway
  • Mining and Milling: Potentially amenable to open-pit mining and established beneficiation methods
  • Excellent Infrastructure: Access to rails, road, labor and electricity
  • Exploration Potential: Mineralization traced over 2,000 meters; remains open along strike and at depth

N.I. 43-101 Mineral Resource Estimate:

CLASS TONNES x1000 MgO% Al2O3% CaO% Fe2O3% SiO2% LIO%
Measured 2,828 43.24 1.08 0.90 1.39 5.19 47.16
Indicated 5,200 43.29 1.17 0.80 1.35 6.17 46.40
M+I 8,028 43.31 1.14 0.84 1.36 5.82 46.67
Inferred 846 43.20 1.30 0.47 0.51 6.87 45.09


Although the magnesium project is not the focus of the Company, it is good to know such an asset with solid intrinsic value exists in the Company's name.

 

 


MGX Minerals Inc.'s Technical Leadership, Management, and Governance  Skip to top

The current management team and board of directors has a well rounded combination of people that each contribute expertise in disciplines necessary for a successful mining entity:

 

Marc Bruner – Marc Bruner / Chairman of the Board

Mr. Bruner was previously the Chairman and CEO of Falcon Oil & Gas Ltd. and served as Ultra Petroleum’s founding Chairman where he was involved in developing the Pinedale Anticline in Wyoming, which is now recognized as one of the largest unconventional natural gas fields in the United States. While serving these companies, Mr. Bruner oversaw negotiations and contracts with global oil and gas companies including Halliburton, Exxon Mobil, Questar Gas and Hess Corporation. Previously, Mr. Bruner founded Pennaco Energy Inc. to explore and develop coal bed methane properties in the Powder River Basin of Wyoming and Montana. In March 2000, the company was sold to Marathon Oil for US $550 million.

  

Jared Lazerson – President, CEO and Director

Mr. Lazerson has worked in the mining and technology industries since 1994 with companies including Osprey Systems (GPS and Digital Mapping), United Helicopters, Copper Island Mines and Manto Resources. He holds a BA in International Relations from the University of Pennsylvania. Mr. Lazerson has been involved with MGX for 5 years and has seen the market capitalization grow from $2M to over $75M, and has been responsible for all aspects of growth of the Company.

   

 Michael Reimann (Ph.D) – Michael Reimann (Ph.D) / CFO and Director

Dr. Reimann graduated in Engineering Physics from the Royal Military College of Canada, and obtained a Ph.D. in Physics from the University of British Columbia. He has over 45 years of experience in senior corporate management in both public and private companies. Most recently Mr. Reimann served as CFO of Skana Capital (TSX.V: SKN) and PNG Gold (TSX.V: PNG).

 

Andris Kikauka (P. Geo) – VP of Exploration and Director

Mr. Kikauka is a geologist with over 30 year of experience. From 1996 to 2012 he was Project Geologist overseeing exploration programs at Goldrea Resources. Mr. Kikauka is Project Geologist for Rio Minerals as well as a director of American Manganese Inc. (TSX.V: AMY), which is focused on mineral properties and commodities used in the steel industry. He holds a B.Sc. in Structural Geology, Mineralogy & Petrology from Brock University.

 

Lyndon Patrick (LLB) – Director

Mr. Patrick is a Vancouver-based, independently practicing lawyer. He has practiced in British Columbia since 2001 in the areas of litigation and real estate. He holds an LLB from the University of Alberta, and an MA and BA from the University of British Columbia. Mr. Patrick is an independent director of the Company.

 

H. David Read (MBA)– Director

Mr. Read has been a financial analyst for approximately 40 years. Mr. Read is a former director of Geostar Metals Inc. (TSX.V: GOS) and of Mena Hydrocarbons Inc. (TSX.V: MNH). He holds a BA from University of British Columbia and an MBA from Stanford University. Mr. Read is an independent director of the Company.

 

 

Note: This article is not intended to be a complete overview of MGX Minerals Inc. or a complete listing of MGX Minerals' projects. Mining MarketWatch urges the reader to contact the subject company and has identified the following sources for information:

 

For more information contact MGX Minerals Inc.'s head office at: Ph (604).681.7735

 

Company's web site: www.mgxminerals.com   SEDAR Filings: URL

 

 

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*Content found herein is not investment advice see Terms of Use, Disclosure & Disclaimer. This is a journalistic article and the author is not a registered securities advisor, and opinions expressed should not be considered as investment advice to buy or sell securities, but rather journalistic opinion only. Technical mining terms used by the writer may be used/expressed in simplified layman terms and should not be relied upon as appropriate for making investment decisions unless the reader contacts the company directly for independent verification. *Estimates of potential made by the mining analyst and journal(s) are non 43-101 and not from the Company.

 

     

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