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MGX Minerals Has Altered the Lithium Playing Field

MGX Minerals announced a breakthrough in ingredient removal from lithium brine this week.

In the past, commercial lithium production relied on a process called hard rock extraction, which was laborious and expensive. Today, the majority of lithium is extracted from brine, which is exponentially cheaper but still time intensive. The method usually sources lithium brine found in dry lakebeds called salars, and the brine is easily pumped into a solar evaporation pond for as much as 24 months. Once the brine is evaporated, the solution is pumped down to a filtering plant where magnesium and boron can be removed to create high purity lithium.

Now, if high levels of magnesium are found in the lithium brine, it complicates this refining process because their ions are so similar, making it a Herculean task to separate them. That is, up until now. MGX Minerals (XMG:CNX)(MGXMF) announced a breakthrough in ingredient removal from lithium brine this week, solving the industry’s nagging and complicated magnesium problem.

Working alongside their partner Purlucid Treatment Solutions, MGX removed 76,000mg/L of magnesium from lithium brine bulk samples. Amazingly, this groundbreaking process removed all traces of magnesium from the brine. It should be noted that MGX announced in May that it had finalized an investment agreement for the purpose of staged acquisition of up to 100% of Purlucid. MGX currently owns 34% of the company.

Solving the Lithium Industry’s Magnesium Problem

“Magnesium in brine, often referred to as hardness in water, has traditionally been one of the major issues in processing of lithium concentrate. The lithium magnesium ratio was traditionally one of the primary factors in consideration of the viability of lithium brine projects. One of the major factors in development of South American brine sources was the relatively low magnesium content. Alternatively, high magnesium content brine sources have been slow to develop such as those in the United States, China, and the Middle East for this reason,” stated MGX Minerals CEO Jared Lazerson. “Removal of very high levels of magnesium opens up a large number of global lithium brine sources for consideration that were previously considered too high in magnesium. This represents a triumph of technology over perceived resource quality, in particular, that the magnesium has been extracted in a common form of widely used industrial mineral compound.”

As Lazerson stated, many lithium projects around the world, especially those in North America, are passed over because their high magnesium content. MGX and Purlucid’s technology, which incorporates the latter’s patented nanoflotation technology, has essentially leveled the playing field for lithium sites around the globe.

MGX and Purlucid were not only able to remove all traces of magnesium from the lithium brine, but they were able to transform the extracted material into a marketable form. The rapid removal process turned the magnesium into magnesium hydroxide, which can be used in antacids, wastewater treatment and even as a fire retardant.

MGX’s Momentum is at a Fever Pitch

This test represents another historic milestone for MGX, a company that is already having a banner year and recently uplisted to the OTCQB, as it steadily advances its revolutionary petrolithium operation. In addition, Purlucid is completing the buildout of its first commercial brine treatment plant. A pilot plant started running in August and a 125 barrel/day pilot plant has been running since July.

“This system represents the physical and operational templates that move us from bench scale to the field and provide the engineering basis for large commercial systems,” Lazerson said in the company press.

More operational expansions are coming soon setting the company up for an even bigger 2018. When all complete, the patented extraction process could yield lithium in a matter of days rather than the usual months or years required for evaporation or rock mining methods. As referenced above, the scalable system uses nanoflotation and membrane filtration to remove heavy metals and other contaminants, like magnesium, before sending the mineral-rich byproduct through a rapid evaporation process that employs thermal energy and chemical reagents.

MGX has already tested the process and proven its economic viability for oil companies – as a recycling treatment option for the industry’s annual 800 billion gallons of tainted wastewater – and as a boon to the lithium market that is looking to meet booming demands.

Big Deal Potential

To emphasize, in the energy sector, this technology is so revolutionary because for many years it was known that petroleum brine contained lithium carbonate and other minerals, but they were impossible to extract. MGX and Purlucid have effectively changed all of that just in time for the renewable energy revolution.

Furthermore, MGX has continued to add oil and gas claims by consolidating land around the Paradox Basin. The consolidated area, totaling more than 80,000 acres, is a combination of Federal, State and private property, but due to the high percentage of committed oil and gas leases MGX has been able to secure operating control in the unitized area. The move effectively provides MGX a base of operations for its petrolithium process and adds valuable feedstock supply.

It is no surprise with all this that the company has already entered into testing and analyses agreement with major oil companies across North America. But, this news is even more interesting when you couple it with MGX’s chairman of the board, Marc Bruner.

Marc Bruner, an unconventional oil and gas legend, came out of retirement specifically to help the company bring their petrolithium technology to the oil giants and accelerate this paradigm shift.

“MGX is the first Company to separate lithium from oil well wastewater,” Bruner stated in the January press release. “I am excited about bringing my experience in the unconventional oil and gas business into a new industry where creative thinking is required.”

Bruner served as founding Chairman of Ultra Petroleum and was involved in developing the Pinedale Anticline in Wyoming, now regarded as one of the largest unconventional natural gas fields in the U.S., as Ultra was grown into a $7 billion+ market cap company. He also founded Pennaco Energy, which was sold in 2000 to Marathon Oil (MRO) for $550 million. Throughout his career, Bruner has negotiated and completed deals with leading players in the energy space, including Halliburton (HAL), ExxonMobil (XOM)and Hess (HES).

Not Many Companies Out There like MGX

These milestones might be enough to satisfy other companies in the industry, but MGX is a different breed. The company’s diverse portfolio includes interests in lithium, magnesium and silicon assets throughout North America, including one of the largest lithium land positions of any single company on the continent at nearly 2 million acres. But, one part of the portfolio that gets overlooked is the 8 billion barrels of oil the company reported at Paradox Basin.

The news caught the attention of BayStreet, who noted: “While the 9 billion barrels number is at the very upper limit of Ryder Scott’s Paradox Basin assessment, even walking back the numbers to their realistic potential is still impressive for MGX’s future. The best estimate total (assessed with 50% probability) comes to nearly 6 billion barrels of oil, and 6.8 billion barrels of oil equivalent. Of the three tables shown in the company’s latest press release regarding the assessment, the best estimate prospective resource net to MGX is nearly 26.5 million barrels of oil equivalent (BOE). At the current price of $50/bbl, the gross value for that kind of resource is upwards of $1.32 billion.”

And, if those numbers don’t get your attention, every drop of wastewater created as a byproduct of the oil and gas extraction can be run through MGX’s petrolithium system, adding a nice cherry on top to their bottom line.

With a multi-versed portfolio, MGX does an impressive job of staying transparent and keeping a warchest of cash to keep their interests moving forward. The company is constantly working to develop and find new opportunity. If MGX’s strong and near-term metal potential is not enough reason to be excited, the company has single-handedly created a new lithium market.

MGX is truly proving itself as a strategic first mover and readers should expect more exciting news soon.

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