Fresh core from recently drilled Hole #9 at the Main Dyke with a 42 cm long spodumene blade (assays pending; MGX Minerals Inc. owns a significant stake in this hard-rock lithium asset in Ontario, Canada, where around 30 holes are being drilled now).
The market eagerly awaits some initial OPEX and CAPEX figures from MGX Minerals Inc.´s pilot plant testing; i.e. revovery of low-grade lithium from oil and gas production wastewaters and brines with subsequent high-grade concentration suitable for upgrading, via a tolling company, into industrial-grade (99% lithium carbonate) and battery-grade (99.99 lithium hydroxide) lithium products.
Already, MGX Minerals Inc. (market cap.: $71 million CAD) capitalizes on its cutting-edge brine technology by acquiring stakes in valuable lithium brine and hard-rock projects in North America via payment of shares. On August 2, 2017, MGX partnered with Power Metals Corp. (market cap.: $25 million CAD) in the following deal:
MGX will issue 3 million shares to PWM (1 million shares every 5 months), worth 2.8 million CAD at yesterday´s price of $0.93 CAD/share.
For that, PWM will transfer all of its US petrolithium brine assets in Utah:
(1) Paradox Basin: JV with American Potash Corp. on 55 km2 of known brine-hosting clastic stratigraphy;
(2) Coyote Project: 12 m2 adjoining the producing Lisbon Valley Oil & Gas Field with historic brine content of up to 730 mg/l lithium.
Before the deal, MGX already controlled large land packages both in the Paradox Basin and the Lisbon Valley. A week after the deal with PWM, MGX reported results of the independent assessment for its own Paradox Basin Petrolithium Project (P50 Potential: 6 billion barrels of oil in place across 22 zones; i.e. a lot of lithium as well). Together with PWM´s assets, MGX now clearly controls some of the most prospective grounds Utah. The company controls even larger petrolithium properties in Alberta, Canada (see here), where MGX has also entered initial agreements with large oil and gas producers in order to eventually offer them the petrolithium technology for the treatment of wastewaters and recovery of minerals, first and foremost lithium.
But that´s not everything MGX gets from the PWM deal.
MGX also receives a 20% working interest in all of PWM´s hard-rock projects (all current ones and any future assets acquired within 36 months). MGX can increase its stake to 35% for payments of $10 million CAD. On top of that, MGX is granted a potentially highly lucrative option to purchase up to 10 million PWM shares at $0.65/share within 36 months (currently trading at $0.31). So let´s take a look at PWM´s hard-rock lithium projects in Ontario, Canada, and why these may evolve to a strong and valuable hard-rock lithium development portfolio also for MGX, the well-diversified brine-specialized lithium company:
(1) Case Lake
A spodumene pegmatite swarm (80 km east of Cochrane, northeastern Ontario) with 3 spodumene/lithium-bearing dykes exposed at surface: North (>100 m strike length), Main (>350 m strike length) and Northeast (>75 m strike length). Currently, PWM is drilling the North and Main Dykes as well the unexposed South Dyke (around 30 holes to estimate grades and to extend along strike and down dip). Total of 5 (known) dykes on property; due to parallel occurence: great exploration potential to find more (burried) dykes.
Yesterday, MGX and PWM made a striking announcement of having successfully intersected significant mineralization in the first 1,000 m of drilling (12 holes completed; 11 holes intersected spodumene). Assays are pending, but it already looks like a great "discovery" as very coarse-grained spodumene crystals (up to 10 cm long!) were encountered. Hole #8 into the Main Dyke cut 35 m of continuous spodumene mineralization. This project may turn out world-class (the upcoming drill results will provide an official indication, which may start to positively effect MGX´s share price as well). See more details here.
Spodumene megacrysts in contact with quartz and feldspar in the Central Zone of the Main Dyke (Source: PWM).
(2) Paterson Lake
A 1,198 ha property (75 km north of Kenora, northwestern Ontario), only 3 km away from Avalon´s Big Whopper Pegmatite (600 m strike length with 250 m of maximum vertical depth). See more details here.
(3) Gullwing – Tot Lake
A 1,216 ha property (30 km northeast of Dryden, northwestern Ontario), only 13 km away from International Lithium´s Mavis Lake Fairservice Pegmatites (partner Pioneer Resources drilled 12 holes in March 2017: 26.3 m @ 1.7% Li2O and 17.9 m @ 1.47% Li2O). See more details here.
(4) Larder River
Property in the same South Mountain Batholith of extruded igneous rock that contains Brazil Lake (Larder is in the center of this batholith and Brazil Lake is at the south end). Larder River has, at surface, extrusion of light colour granite rock just like Brazil Lake. These granites host pegmatite dykes, which contain high grades of lithium, tantalum and rubidium. Brazil Lake pegmatite boulder sampling in 2011, looking for new pegmatites to drill test, showed results in the same range for lithium as the anomalies seen in the soil sampling program at Larder River. A core drilling program of 28 holes in 2011 at Brazil Lake encountered extensive LiO2 mineralization. See more details here.
What becomes clear is that MGX shares act as a strong (acquisition) currency, apparantly with strong upside potential. More value may be attributable to the partnership such companies aim to extend once MGX´s brine technology is deployable commercially. MGX has achieved the feat of acquiring significant stakes in 6 lithium projects for less than 4% of its current share float (total of 76,195,199 shares issued and outstanding). However, it may have a more significant effect on its market valuation going forward.
MGX Minerals Inc.
#303 - 1080 Howe Street
Vancouver, BC, Canada V6C 2T1
Phone: +1 604 681 7735
Shares Issued & Outstanding: 76,195,199
Canadian Symbol (CSE): XMG
Current Price: $0.93 CAD (09/21/2017)
Market Capitalization: $71 Million CAD
German Symbol / WKN (Frankfurt): 1MG / A12E3P
Current Price: €0.615 EUR (09/22/2017)
Market Capitalization: €47 Million EUR
Report #24 “One of the Largest Initial Oil Estimates in US History“
Report #23 “MGX starts Petrolithium pilot plant to deliver hard facts for strategic partners“
Report #22 “Time to bet: Sprott takes a position in MGX“
Report #21 “Petrolithium: First Come First Served“
Report #20 “Successful Independent Verification of the MGX Lithium Extraction Technology“
Report #19 “MGX to Drill the World‘s First PetroLithium Well in Utah“
Report #18 “MGX Reports Upgrading of Lithium Brine from 67 to 1600 ppm Lithium“
Report #17 “MGX technology nominated for prestigious Katerva Award, the Nobel Prize of Sustainability“
Report #16 “Unconventional oil play legend Marc Bruner to take MGX and PetroLithium to the next level“
Report #15 “Total Conviction: MGX forms PetroLithium Corp. to expand into the US oilfield brine markets“
Report #14: “MGX Extracts Lithium from Oil Wastewater - Begins Monumental Integration with Big Oil“
Report #13 "MGX Partners with Oil Major on Lithium Brine, New Energy Industry Facing Fundamental Shift“
Report #12 "Game Changing Potential: MGX Minerals‘ Pilot Plant for Rapid Production of Lithium Nears Completion“
Report #11 "MGX assays 34 g/t gold from surface sampling in British Columbia“
Report #10 “Official: MGX owns magnesium worth multi-billions of dollars and starts pilot plant shortly“
Report #9 “One of the world‘s largest lithium resources on the horizon?“
Report #8 “Ready for significant lithium brine work in Alberta“
Report #7 “At the forefront of Alberta‘s lithium brine riches“
Report #6 “Pioneering Lithium in Alberta: MGX Minerals Teams Up“
Report #5 “Time to Put a Lithium Production Process in Place“
Report #4 “MGX Minerals Taps Into Canada‘s Potentially Largest High-Grade Lithium Resources“
Report #3 “MGX Minerals Receives Mining Lease for 20 years (in British Columbia!)“
Report #2 “MGX Minerals Accelerates Towards Production“
Report #1 “MGX Minerals Plans To Enter The Magnesium Market“
Disclaimer: Please read the full disclaimer within the full research report as a PDF (here) as fundamental risks and conflicts of interest exist. The author hold a long position in MGX Minerals Inc. and is being paid a monthly retainer from Zimtu Capital Corp., which company also holds a long position in MGX Minerals Inc.