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Sector:  Mining, Energy, Industrial, Transportation   :

News Release - March 16, 2018 4:38 PM ET 

MGX Minerals Advances Next Generation Zinc Air Fuel Cell Battery, and Engages Hatch Ltd. for Magnesium Metal Study at Magnesium Project

• MGX advancing several Lithium projects of significance, including Chilean salar brine testing.

• MGX targeting mid-2019 for manufacturing of fuel cell battery with potential to rival Tesla's Powerwall/Powerpack.

• MGX at the beginning of Petrolithium growth curve.

Breakthrough Technologies on 2 Fronts Poised to Propel MGX Minerals Valuation

MGX Minerals Inc. (CSE: XMG) (FKT:1MG) (OTCQB: MGXMF) is a Canadian-based mining and clean technology processing company focused on accelerating emerging energy and energy commodity technologies that disrupt the status quo. The Company is multi-faceted, advancing several projects with potential to increase shareholder value;

1) Lithium Brine Processing Technology: The Company's flagship is its focus 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. MGX Minerals Inc. is also positioned technology-wise to commercially exploit the mineral rich brine that is a residual by product of geothermal power generation. MGX is looking to bring the first 750bpd wastewater brine plant in Alberta in production this Q1-2018. The Company's first major contract will be for a contract with a major oil sands company, for a 1,200m3 (7500bpd) per day, $45/m3 revenue agreement. MGX Minerals has recently announced improved refinement of its nanofiltration lithium technology, and has commenced initial design of a 2400 cubic meter per day (~13,000 barrels) plant.

2) Mass Energy Storage Zinc-Air Battery: MGX Minerals is quickly positioning itself as a leader in mass energy storage solutions with tech that is cost-effective, easily scalable, and eliminates all short-term energy downtime. MGX is advancing innovative modular energy storage batteries through proprietary (100%-owned) patented zinc-air technology through its wholly owned subsidiary ZincNyx Energy Solutions Inc., a private company acquired from the mining giant Teck Resources in December 2017. Think Tesla's Powerwall and Powerpack but without lithium, powerful, quick charging, and low cost; this innovative regenerative zinc-air flow battery technology is designed for energy storage in the 5 kW to 1 MW range for extended periods of time. The tech allows for low cost mass storage of energy, and can be deployed into a wide range of applications, including utility-scale storage and power grid load stabilization, long term backup power for industrial, commercial, and military facilities, remote location off grid and micro grid applications, and diesel generator replacement or hybridization. Since the ZincNyx system uses zinc dendrites as fuel and consumes them as part of its normal operation, it is immune to the growth of zinc dendrites which have traditionally plagued zinc-air flow batteries (see related Jan. 9, 2018 news "MGX Minerals Announces Major Advancement in Mass Storage Battery Technology; Solves Zinc Dendrite Formation Limitation") -- A MAJOR BREAKTHROUGH WHICH PAVES A PATHWAY TO NEAR-TERM COMMERCIALIZATION; ZincNyx has begun the commercial development for the mass production of its scalable 20kWh capacity zinc-air mass storage battery (See related January 30, 2018 news "MGX Minerals Commences Development of Next Generation Zinc Air Mass Storage System"). Unlike conventional batteries, which have a fixed energy/power ratio, ZincNyx’s technology uses a fuel tank system that offers flexible energy/power ratios and scalability.  The storage capacity is directly tied to the size of the fuel tank and quantity of charged zinc fuel making scalability a major advantage of the flow battery system.  In addition, further major advantage of the zinc-air flow battery is the ability to charge and discharge simultaneously and at different maximum charge or discharge rates as each of the charge and discharge circuits is separate and independent.  Other types of standard and flow batteries are limited to a maximum charge and discharge by the total number of cells as there is no separation of the charge, discharge and size of the fuel storage system (see overview of MGX Minerals' modular energy storage zinc-air battery further below).

The key difference between the Tesla Powerwall versus MGX's ZincNyx Fuel Cell Battery is the ZincNyx storage capacity is much larger; in order to increase storage simply increase the size of the fuel tank and add more fuel (zinc in this case). To increase storage of a Tesla battery you have to add both output and storage capacity. This decoupling of output power and storage is key and makes the ZincNyx system much cheaper in terms of storage capacity. So the real question is how much energy can you store, not just what is the rated output capacity. In terms of size, the system will be about the same size from 5kW to 20kW, as everything is shrinking in size in the production design phase at the moment with the exception of the fuel tank itself. A standard 5kW system will have 40kWh storage, the new 20kW system will have 160kWh storage. The target price, like others in this space, has been $250/kWh for an 8 hour backup system. This would result in $10k for the 5kW system and $40k for the 20kW system. Depending on the application and configuration, the price can be significantly higher or lower. The fuel cells, needed for output, are the expensive part of the battery. With economies of scale, prices would go down.

MGX Minerals is targeting mid-2019 for large scale manufacturing of its ZincNyx Fuel Cell Battery and already has manufacturing partners in place.

3) Industrial Minerals Project, in Invermere, BC, Canada: The Driftwood Property contains a valuable magnesium deposit, a major asset of the Company. On March 6, 2018 MGX announced a Positive PEA for its Driftwood Creek Magnesium; Pre-Tax NPV of C$529.8 Million and 24.5% IRR. Assuming a sales price of $779 ($600 USD) per tonne for Dead Burn Magnesium (DBM) oxide with All-in Sustaining Production Costs at $351/t, the PEA calculates an impressive Pre-Tax NPV (at 5%) of nearly $530 million, resulting in a very respectable IRR of 24.5% with a quick 3.5 year paypack period. With a processing capacity of 1,200 t/day, the annual production is estimated at 169,700 t of magnesium oxide (MgO). During the 19 year mine life, the payable metal production totals around 3.1 million t of MgO, which translates into around $1.1 billion of Pre-Tax Cash Flows (on average $72.6 million of Pre-Tax Cash Flow per year).
 
These robust numbers are realizable for just $236 million of initial capital costs and would make MGX a rare breed of low-cost producers globally enjoying high operational margins in a safe and stable jurisdiction. Total LOM ("Life Of Mine") capital expenditures amount to only $240 million and include $3.9 million for closure costs and a contingency of $40 million. The highly lucrative and robust PEA is based on a high-grade (43% MgO) and large (7.8 million t) mineable resource at surface, resulting in high recoveries (90% on average) with conventional processing (crushing, grinding, flotation upgrading, calcination, and sintering to produce a saleable DBM product). The DBM product will be bagged and transported to market for sale as a powder with a purity of 94.6% MgO. The quarry-style mine would benefit greatly of not being located within a known environmental protection area. MGX Minerals has engaged Hatch Ltd. for magnesium metal study at Driftwood Creek which is expected to further increase the economics of the project.

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Near-term share price target: $5+/share for CSE:XMG -- Source: Market Equities Research Group ; MGX Minerals Inc. currently has a market cap of ~C$110 million (~95 million shares outstanding trading (post Dec. 28, 2017 financing and acquisition of ZincNyx) at ~$1.15/share), Market Equities Research Group 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 MGX Minerals generate revenue and lithium streaming contracts, 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.

• Company website: https://www.mgxminerals.com

• SEDAR filings: URL

• Recent Technology Journal article: http://technologymarketwatch.com/xmg.htm  

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