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

MGX Minerals 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.?

Originally published by Click here to listen to the full audio

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

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.


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