MGX's technology was a 2017 finalist for the Most Disruptive Technology in the World award by Katerva.
MGX Minerals Inc. (CSE: XMG) (OTCQB: MGXMF) is the subject of a Mining MarketWatch Journal review. MGX Minerals Inc. 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.
Full copy of the Mining Journal Review may be viewed at http://miningmarketwatch.net/xmg.htm online.
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:
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.
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.
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.
Near-term share price target: $5+/share for CSE:XMG ; MGX Minerals Inc. currently has a market cap of ~C$77 million (~77.6 million shares outstanding trading at ~$0.99/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.
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.
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.
Full copy of the Mining Journal Review may be viewed at http://miningmarketwatch.net/xmg.htm online.
The above content is for information purposes only and not a solicitation to buy (or sell, but I can;t imagine why you would like to do that) any of the securities mentioned. However you would be remiss in not exploring how you might want to get involved.