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Sector:  Mining, Energy, Industrial, Transportation   :

News Release - November 17, 2017 15:08 PM ET 

MGX Minerals engineering partner awarded C$8.2M to manufacture and deploy first full commercial 7,500 BPD system using MGX's technology, MGX initiates geophysics at Utah Petrolithium Project

NEW YORK, NY, November 17,  2017 /Sector Newswire/ -- MGX Minerals Inc. (CSE: XMG) (OTCQB: MGXMF) this week announced the completion of drilling at its Case Lake Lithium Project. This news falls on the heels of two news releases the week prior; 1) that MGX Minerals has initiated a Geophysical Survey at its Utah Petrolithium Project, and 2) that engineering partner PurLucid Treatment Solutions (“PurLucid”) has been awarded a non-repayable contribution totaling up to C$8.2 million in government funding for the construction of a full commercial system using MGX's technology.

To the left below is excerpt copy of a recent Mining Journal article (note: near-term $5/share price target based on MGX's proprietary extraction technology being advanced). To the right is excerpt copy of recent news releases.

3 distinct business lines: 

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$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.

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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. 

Full copy of the Mining Journal Review may be viewed at http://miningmarketwatch.net/xmg.htm online.

This release may contain forward-looking statements regarding future events that involve risk and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual events or results. Articles, excerpts, commentary and reviews herein are for information purposes and are not solicitations to buy or sell any of the securities mentioned. Readers are referred to the terms of use, disclaimer and disclosure located at the above referenced URL(s).

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