The New Holy Grail

Everyone has heard of the search for the Holy Grail and in the world of matter in which we exist some the biggest advances have been made, arguably, because we have learned how to create accessible energy on a large scale. We mean a Really Large Scale.
Think of the scale of providing fuel for well over 1 Billion cars. This is not to mention airplanes and military vehicles and whatever else is not counted as a conventional car. And that number is growing as more countries join the middle class.
Oil has undoubtedly been the world’s Holy Grail of energy for the past 100 years or so but we all know the dire warnings and consequences we face if we cannot kick the oil habit.

Enter a white knight on a shining electric car known as lithium!

As of June 2016 there are approximately 1 million electric vehicles so even grade 2 math students should be able to do some ciphering and realize electric cars have a LOT of room for growth.
What the world needs now is fuel to create efficient batteries to drive electric cars and it turns out that lithium, a soft white metal which is the lightest of all the alkali metals is that fuel in today’s technological reality.
Lithium has been called “white petroleum” and “petrolithium” because it could literally replace oil as the main driver of vehicles in a few short years.
This doesn’t mean oil is going away and the waste created by processing oil is still a serious problem which remains to be dealt with. More on this almost immediately…
Enter MGX Minerals Inc., (CSE:MXL) (OTC-BB:MGXMF) a microcap resource company trading on the Canadian Stock Exchange.
MGX Minerals is a mineral exploration company which is addressing both of these issues at the same time with a patent pending process (US provisional patent No. 62/419,011) to extract lithium and potentially other valuable minerals from heavy oil wastewater.
According to President and CEO Jared Lazerson there are millions and millions of barrels lithium brine bearing water produced each day in North America coming from oil wells.
This is an ironic coincidence but a very happy one for MXG Minerals because according to the company they working very hard to prove they can economically ‘mine’ lithium from this source. One of the most astonishing facts is they have managed to speed up the process of deriving lithium concentrate from 18 months down to one day!!!
According to a Globenewswire article: “Current conventional production of lithium from brine takes up to 18 months due to the solar evaporation phase.
MGX’s process eliminates the solar evaporation step, reducing potential production to one day and representing a reduction of >99%.”

We have to emphasize this fact because speed to market is going to determine who ends up leading this lithium supply chain and 18 months is a lifetime in the mineral supply business. Sometimes speed is the Holy Grail as any ambulance driver will attest to…

When the company realized they might be able to solve an imminent energy problem on a massive scale, they sprung into action and began acquiring mineral permits to the tune of almost 500,000 acres. This land alone produces more than 1 million barrels of wastewater per day. These permits are all focused on major oil and gas producing areas in the province of Alberta.
This prescient action makes MGX the largest holder of mineral permits covering known lithium-bearing brine areas in Canada.

So how far along is the company in this process of finding or you might say extracting the Holy Grail?

On Jan 03 2017 the company announced they had successfully extracted lithium from heavy oil wastewater, causing the company shares to increase more than 25% in valuation.
https://www.mgxminerals.com/investors/news/2017/221-mgx-minerals-extracts-lithium-from-oil-wastewater.html

Clearly some Holy Grail lithium enthusiasts have been observing the progress of MGX Minerals!
In fact they are one of the most liquid companies trading on the Canadian Stock Exchange and their following continues to grow as more investors are realizing the magnitude of success which they could attain upon reaching their extraction goals successfully. They continue to optimize the process with their scientists.
It is a two stage process with the first stage done by partner Purlucid Treatment Solutions and MGX minerals working on the final extraction stage.

According to their partner Purlucid, as reported by Dr. Preston MacEachern,  21% of the Li is left in the brine on which they are working diligently to extract as they can.
The end resulting brine will be the focus of optimization because it still contains high concentrations of sodium, potassium and boron. The end of the first stage treatment process by Purlucid will result in the removal of all suspended solids, 99.97% of the hydrocarbons and reduced scale forming ions such as silica to levels suitable for reuse in steam generating processes.

The deal between the two companies allows for MGX Minerals the right to acquire 100% of Purlucid in stages for $5 million. A pending government grant will hopefully assist the companies to achieve their goal with less need to dilute or take on debt should they receive this grant. We don’t see much reason why they wouldn’t receive monies given the importance of their mission but we are not privy to the inner machinations of the government research council at this time.
For the more technical readers out there, during production of heavy oil, heavy oil evaporator blowdown (EBD for short) is one of the byproducts of steam-assisted gravity drainage (SAGD for short). MGX is working with partner Purlucid Treatment Solutions to integrate the technologies of both companies and develop a commercially useable pilot plant. And they are doing it full speed ahead! They have approximately $1/2 million cash on hand so they don’t need to go to the market for more money immediately.

Now we don’t want to say the sky is the limit, but literally the sky is the limit! If they can win the race to be a major lithium supplier and solve a dirty, dirty oil wastewater problem at the same time. Jared Lazerson and company may well be put up for knighthood, if not sainthood itself!!
Stay tuned all you Holy Grail seekers!!
MGX also operates  a silicon property which is fairly backburnerish at the moment. Further up the scale is a magnesium property north of Cranbrook B.C called Driftwood Creek on which they have completed a 100 ton bulk sample and received a 20 year mining lease in January. The company hopes that Driftwood Creek will be North America’s next magnesium oxide mine. They have outlined more than 8 million tons grading more than 43% magnesium which is very high grade for this mineral even though high grades are fairly normal with magnesium.  All of this ore is located above the 100 meter level so they feel that there is a lot of room for more mineralization.

This company is not sitting around on their haunches by any stretch of the imagination.

In fact if we use a little imagination we may well see them become a world beater company with their lithium extraction technology and their designation may be as a “clean tech” company which everybody loves much more than mining company we have noticed. A change to a more visible stock exchange would not be unreasonable to expect as they develop since this is a normal course action for junior companies. Although the company cannot yet show economical numbers for their process they are indeed working full bore at this very task. There is a great deal of excitement being generated with this exclusive technology which could disrupt the energy industry and provide a great deal of the lithium needed in the very near future. This could help us break our dependency on fossil fuels and their potentially horrendous consequences. Bring on the White Knight!!!! Away with the black night! A new Holy Grail is in sight!

WE LOVE THIS TECHNOLOGY AND COMPANY! We own MGX Minerals shares and they are a client – do your own due diligence.

Happy Investing!

Dr. Kal KoTECHa

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