By Peter Kennedy
MGX Minerals Inc. [XMG-CSE] has struck a deal to earn up to a 50% interest in Belmont Resources Inc.’s [BEA-TSXV, L3L1-Frankfurt] Kibby Basin Lithium project in Nevada. Once the option is exercised, the companies will become equal partners at Kibby Basin and Belmont will have access to MGX’s lithium extraction technology.
MGX Minerals is a diversified resource company that is focused on the development of large-scale industrial mineral portfolios in specific commodities and jurisdictions that will fuel the new energy economy.
The company says it is uniquely positioned to pursue this strategy as it holds significant interests in lithium, magnesium, and silicon assets throughout North America.
Under an agreement announced on July 16, 2018, Belmont can earn the first 25% interest in the Kibby Basin Project by funding up to $300,000 worth of exploration drilling.
The target area is a large well-defined anomaly discovered by a magnetotelluric survey carried out by Belmont in January 2018.
MGX can snap up an additional 25% interest in Kibby Basin by funding another $300,000 worth of drilling. At that point the project will become a 50%/50% joint venture, providing Belmont with access to MGX’s lithium extraction technology.
MGX Minerals shares advanced on the news, rising 6.45% or $0.06 to 99 cents on July 16, 2018. The stock is trading in a range of $1.96 and 75 cents.
Brines (in salt ponds) and spodumene (hard rock) represent the two main sources of commercial lithium production.
Investor interest in this sector is tied to the fact that lithium is a key ingredient in the production lithium-ion batteries used to manufacture electric vehicles.
Analysts agree that the booming electric vehicle market will dramatically boost the demand for battery quality lithium.
These optimistic forecasts help to explain why lithium carbonate prices have jumped to around US$18,000 per tonne from US$6,450 per tonne in early 2015. Lithium hydroxide has been trading at around US$18,500.
Lithium chemicals prices are largely set by contract negotiations between producers and customers.
The two main lithium products for the production of lithium-ion batteries are lithium carbonate and lithium hydroxide. Lithium carbonate is mostly produced from concentrated lithium chloride brines in Chile and Argentina, but is also produced from lithium spodumene concentrate conversion in China.
MGX has emerged as a potential joint venture partner at Kibby after Belmont recently said it has initiated discussions with companies in the lithium extraction space that have requested samples from the Kibby Basin property.
On Monday, MGX said it has agreed to acquire 4 million units of Belmont by way of a non-brokered private placement priced at $0.05 per unit. Each unit will consist of one common share of Belmont and one transferable share purchase warrant.
Each whole warrant will permit the holder to acquire one additional share of the company at $0.08 in the first year and $0.10 in the second year after closing. Additionally, MGX will be granted warrants to purchase up to 10 million shares of Belmont at $0.20 per share. The warrants are exercisable for a period of three years.
As reported by Resource World on June 14, 2018, MGX has found a way to extract lithium from waste water produced by Alberta oil sands operations.
This company recently said its NFLI-5 commercial scale rapid lithium extraction system is ready for deployment following a successful demonstration in the Calgary laboratories of MGX’s partner PurLucid Treatment Solutions Inc.
PurLucid’s technology separates heavy metals and hydrocarbons from brine, purifies wastewater and creates a steady flow of brine feedstock for MGX’s rapid recovery process.
MGX and PurLucid have integrated their respective technologies and fabricated pilot plants that operate as standalones or can be integrated directly into oilfield operators’ existing infrastructure.
Combined, MGX says this Cleantech process does not require the construction of large, multi-phase, lake sized, lined evaporation ponds, greatly reducing the physical footprint and enhancing the quality of extraction and recovery across a complex range of brines that were previously considered un-processable due to complexity or geographical location outside of solar evaporation appropriate zones.
This includes oil and gas wastewater, natural brine, and other brine sources such as lithium-rich mine and industrial plant wastewater.
The final product is lithium fluoride, which can be refined for use in batteries.
Meanwhile, Belmont has arranged to raise another $175,000 by way of non-brokered private placement of 3.5 million Belmont units at $0.05 per unit. It said proceeds of the private placement will be used to fund exploration at Kibby Basin.