MGX Minerals shares rally on U.S. petrolithium site survey update

MGX Minerals Inc. [XMG-CSE; OTCQB-MGXMF] said Tuesday January 2 that it has completed a site survey in preparation for 3-D geophysics at the company’s Paradox Basin petrolithium project in Utah. The purpose of the geophysical survey is to outline subsurface geological formations and structures that are favourable for accumulations of oil and gas as well as lithium brine-bearing formations.

MGX is a Canadian mining and clean technology processing company that is focused on commercializing new brine processing technology, enabling the company to deal with complex/dirty brines.  Up until now, rich complex lithium brine projects with high magnesium and lithium rations have been passed over as technology did not exist to economically separate the two.

MGX’s proprietary/patented technology now positions scores of complex lithium brine projects that were previously untouchable across the globe to be developed with better economics than solar evaporation.

The Paradox Basin petrolithium project is located next to the Lisbon Valley Oilfield (also within the Paradox Basin), where about 140 wells are located that produced in excess of 50 million barrels of oil with historical brine content of up to 730 ppm lithium.

The site survey covered 80,380 acres of unitized Federal, State and private lands known as the Blueberry Unit. The Blueberry Unit and Lisbon Valley Claims consist of over 110,000 acres of oil and gas leases and approximately 118,000 acres of largely overlying and contiguous mineral claims. MGX is currently earning a 75% working interest in the project, with the balance being controlled by a private Utah corporation.

The project is being simultaneously explored for oil, gas, lithium and other brine materials as part of the company’s North and South American exploration, testing, and analyses strategy to determine locations for deployment of the company’s lithium and mineral extraction technology.

There is no ready market for lithium. Lithium prices are determined by the purity and chemistry of the material as well as the length of the contract between buyer and seller.

Brines (in salt ponds) and spodumene (hard rock) represent the two main sources of commercial lithium production.

Investor interest in the sector is related to the increasing application of rechargeable lithium-ion batteries, particularly in the automotive sector, as well as the impact on demand of battery manufacturing plants that are being built by Tesla Motors Ltd. [TSLA-NASDAQ] and others.

MGX shares rose 1.02% or $0.01 to 99 cents in early afternoon trading on Tuesday. The 52-week range is $2.75 and 47.5 cents.