MGX Minerals releases positive PEA for B.C. magnesium project

MGX Minerals Inc. [XMG-CSE] on Tuesday Mar 6 announced a positive Preliminary Economic Assessment for its Driftwood Creek Magnesium project in southeastern British Columbia.

The company has filed a technical report which examines the merits of building a conventional quarry pit mine with a processing and furnace/kiln combination to produce a saleable Dead Burn Magnesium oxide (DBM) product along with a caustic-calcined magnesium oxide (CCM) as a separate saleable product.

“We are extremely pleased with the results of the PEA, which display Driftwood’s ability to become a high-margin, low-cost producer of magnesium oxide in a politically secure jurisdiction,” said MGX President and CEO Jared Lazerson.

“We believe this significant milestone outlines a clear path forward and provides numerous opportunities to further enhance the economics of the Project with the pre-feasibility study,” he said.

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.

Highlights of the PEA include the following:

• Pre-tax net present value (NPV @ 5% of $529.8 million, IRR of 24.5% with a 3.5-year payback
• Initial capital costs of $235.9 million (total life of mine $239.8 million includes sustaining/closure costs of $3.9 million and contingency costs of $40 million)
• Conventional quarry pit mine with 1,200 tonne-per day process plant using conventional crushing, grinding, flotation upgrading, calcination, and sintering to produce a saleable DBM product
• LOM average head grades of 43.27% MgO
• Mine life of 18.8 years
• Pre-tax cash flow during production of $1.051 billion.

The Driftwood Creek Project is located in southern British Columbia, approximately 210 km northwest of Cranbrook. Infrastructure currently exists in the form of paved highways and forest service roads, a CPR spur line (at Brisco, B.C.) and a major power line within 15 km of the property.

The plant will be located in Cranbrook, where all mineralized run-of-mine material will be hauled and processed.

The PEA is based on a high grade (43% MgO) and largest (7.8 million tonnes) mineable resource at surface, resulting in recoveries (90% average) with conventional processing (crushing, grinding, flotation upgrading, calcination, and sintering to produce a saleable DBM product).

The DBM product will be bagged and transported to market for sale as a powder with a purity of 94.6% MgO.

On Tuesday, MGX shares rose 4.38% or $0.06 to $1.43. The 52-week range is $1.96 and 73 cents.