MGX Minerals Chairman Marc Bruner on being attracted to first mover in Petro lithium

James West |

Originally published by MidasLetter.com. Click here to listen to the full audio

MGX Minerals (CNSX:XMG) (OTCMKTS:MGXMF) (FRA:1MG) Chairman and CEO of U.S. subsidiary Petrolithium Corporation of America outlines the reasons he sees MGX founder Jared Lazerson as a visionary, and why he thinks MGX is the “first mover” in the Petro lithium space.

James West: Marc, thanks for joining us today.

Marc Bruner: I’m glad to be here.

James West: Marc, let’s start with an overview of what attracted you to join MGX Minerals?

Marc Bruner: Well, I think the most important thing is, in the lithium business, they’re the first company to extract lithium out of oilfields brines, wastewater. I think the second thing is, at least in Canada, they have close to 1.5 million acres, and they are by far the leader and the biggest by a long shot in terms of owners of the mineral rights for the lithium brines in Canada. That’s the second thing.

Third thing is, Jared Lazerson and I have been chatting for like the last six months, sort of circling each other. I’ve come to get to know him very well, and I think he’s a real visionary. He watches his business very closely, and he’s on a mission to build a very large lithium company. And from the standpoint of lithium brines, it’s my belief he’s the leader out there as he’s come out with the first process.

James West: Sure. Interesting. Okay, so a bit about your background: you’re somewhat famous for your accomplishments in the oil and gas sector. Can you give me a quick bio, quick history?

Marc Bruner: Yeah. I’m a second generation oil-and-gas guy. My 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. I worked with him until his death in 1976; I’ve been in the oil and gas business ever since. I guess my claim to fame was, I was one of the pioneers of the unconventional oil and gas business. I was the Chairman of the Board and essentially the dealmaker for Ultra Petroleum, and I think in 2009, the Pinedale Anticline was the third largest unconventional oil and gas field in the world.

So yeah, I was the guy that essentially built Ultra, and it went from what, $10 million market cap to 16 billion. So I think it was the largest independent oil and gas company ever to come out of Vancouver, for sure.

So I did that, I started a company called Pennaco in 1999, I pulled a methane project in the Powder River Basin from Wyoming, and this company had a three year life. Essentially we raised a total of about $35 million in three years, and sold it to Marathon for $550 million. I was CEO and Chairman of Falcon Oil and Gas, and you probably know something about that; I guess it was, at least in the oil and gas sector, the most liquid stock in Canada for a while, for three years. And we raised $500 million to drill wells in Hungary and Australia, and now, with another company called Poltrol Petroleum, I have close to 10 million acres in the northern territory of Australia, looking for unconventional gas and oil on the Blue Basin. So yeah, so my history is in the unconventional sector more than anything else.

James West: Sure, so you’ve got a depth of experience convincing investors and stakeholders that the unconventional is very much the possible.

Marc Bruner: Well I think so, and the thing that really attracts me here is that the oilfields, okay, that produces the water, okay, and especially the stuff in Canada – I mean, it’s a wastewater product, right? Anyone that would come in and turn wastewater into an economical project has a big benefit. There’s a symbiotic relationship between the people that own the oilfields and MGX, because MGX owns the brines.

I think the other thing that’s important to consider is a lot of these oilfields are at the twilight of their existence. And you know, the oil companies have substantial plugging liabilities out here. Anything that will help mitigate those plugging liabilities and give those oil companies additional cash flow streams is a very good thing for both companies. So I think that’s, I’m very confident that as this process develops with striking the lithium from these oilfield brines in Canada, it’s going to work out very well for MGX.

James West: Sure.

Marc Bruner: In the United States, MGX has just announced that they have placer claims, staked placer claims, across Lisbon Field in the Paradox Basin. Paradox Basin happens to be one of the richest brine deposits, if not the richest brine deposit, in the United States, in my opinion. Some of the lithium contents are up to 1700 parts per million where we staked in this old field, and those lithium contents are commensurate with lithium contents down in Argentina and Chile, where you have some substantial deposits. But the nice thing about this deposit is that you don’t have political risk associated with it. With Jared’s extraction process, you could start producing lithium from day one, not have to wait up to 24 months to produce the lithium.

So many advantages associated with what we’ve just done in the Paradox Basin, and we’re very excited about it being our first acquisition in the United States.



James West: Right. So do you think that, from a geographical perspective, considering the bias of the new administration towards American-sourced raw materials and goods, you think that there’s a potential assuming that MGX reaches commercial production and commercial volumes of lithium production from these projects, that they could realistically expect to have relationships with the likes of Tesla and other consumers of lithium for the battery space?

Marc Bruner: Oh, I think absolutely. I mean, one of the things that I really like about this Paradox Basin, we know so much about it. There’s hundreds of wells that have been drilled in it. the thing that I like is these lithium brines are anywhere between 3700 feet and 8000 feet deep, and in terms of the reservoir mechanics, what we call pressure gradients are 0.55 is over-pressured, which essentially means when you produce the brines you don’t have to put pumping units or anything like that on it. You’ll have a natural flow up the tubing because of the over pressure. We believe that there’s going to be substantial water production, and you’re going to be able to marry that with the oil and gas production that comes out, because they’re both going to be mixed together, right?

So you’ll have oil and gas revenue, plus you’re going to have the extraction of the lithium and other minerals that have value. So I think it’s going to be a great marriage. This is going to redefine what unconventional is in the United States, with the new technology. This is, in my view, going to be the new energy. So you’re going to see a marriage between the oil and gas business and the heavy water and the lithium extraction, and I think Tesla’s realized that. Tesla is going to be wanting to go to the biggest area with the biggest reserves that can come into production the quickest. I think with the new administration of Mr. Trump, he’s already indicated he’s going to be oil and gas friendly, and I think as his administration learns more and more about this new energy, the lithium batteries, they’re going to be very, very supportive, possibly with even additional tax breaks that we don’t even know about yet.

This is going to be a paradigm shift, in my opinion.

James West: Last month, Lithium Americas, who’s operating a joint venture with SQM, one of the largest producers of lithium in the world, they raised $112 million from Bangchak Petroleum, which is the national oil company of Thailand, because Bangchak Petroleum is trying to pivot away from fossil fuels towards capturing the opportunity inherent in the evolution of electric vehicles and the battery revolution. Do you see from your experience in the oil and gas space, is it possible that the super majors might start to pivot and embrace getting involved in the supply side of lithium ion batteries?

Marc Bruner: Yes, I think that’s important. I think one of the things that is important in terms of the opportunity we just closed on in the Paradox Basin is that you have one landowner in here, and oil and gas leases, if you’re not dealing with the Bureau of Land Management, which we are, if you have multiple landowners, there’s challenges associated with how oil is going to be treated and title is going to be adjudicated for who actually owns the brines. So this is one of the things you really have to think about. That’s what makes the Paradox Basin and having one landowner, the Bureau of Land Management, so important, okay?

So I think that, you know, except for that, yes, the majors are going to want to be involved, but as I say, it’s a brand new industry, and there’s different things that you have to have to make it work, and title is one of them. And as long as that can be handled, yeah, you’re going to see the majors move into some of the different areas, but it’s going to take some time. And I think that the exciting thing, for example, going back to the paradox basin, is that we have those issues already settled. And we have the extraction process already developed.

So I think that the first that’s on the market with large reserves is going to be the prime mover out here, and that’s what we intend to be.

James West: All right, Marc, that’s a great overview. I’d like to thank you for your time today.

Marc Bruner: It’s a pleasure. Look forward to talking to you again. Thanks.

Disclosure

MGX Minerals is a Midas Letter portfolio holding and also provides financial assistance in the production of content such as this.

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Companies

Symbol Name Price Change % Volume
XMG:CNX MGX Minerals Inc. 1.34 0.04 3.08 92,827
MGXMF MGX Minerals Inc 1.01 0.03 3.10 44,335

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