MGX Targets US Lithium Brine Acquisitions for its Rapid Extraction Technology

In light of the pressing need for a new US lithium supply under the new tariff regime under the Trump Administration, MGX Minerals Inc. today announced a strategic joint venture with Belmont Resources Inc., entering into a Property Option Agreement to acquire up to 50% interest in Belmont’s flagship Kibby Basin Lithium Brine Property, located some 50 km north of the Clayton Valley and thus closer to Tesla’s Gigafactory near Sparks, Nevada. 

With the overappropriated Clayton Valley hosting the only lithium mine on US soil and a potential trade war escalating between China and the US at the very moment, the spotlight is, and will be, on domestic production of batteries and strategic commodities like lithium as such have officially been deemed critical to the economic and national security of the US. 

According to the agreement, MGX is acquiring an initial 25% interest in Belmont´s Kibby Basin Project for funding up to $300,000 CAD in exploration expenditures to be used for drilling. Kibby Basin is drill-ready, with drill permits received recently in June and a drilling contractor already selected. With drilling to start now, we will very soon find out, probably with the first drill hole, if the Kibby Basin hosts lithium-enriched brine. Hence, MGX’s strategic move looking for US lithium brine sources for its award-winning rapid extraction technology comes with a perfect timing.

The agreement allows MGX to earn an additional 25% interest in the Kibby Basin Project by funding an additional $300,000 CAAD in exploration expenditures for drilling at which time the project will become a 50/50 Joint Venture with access to MGX’s rapid lithium extraction technology. Upon exercise of the full option agreement, MGX will become the project operator and the 50/50 Joint Venture will be formed with Belmont covering further exploration in the Kibby Basin, which may include additional exploration drilling, well testing operations, and extraction plant installation and operation.

The benefits for Belmont (current market capitalization: $5 million CAD) are clear: MGX (current market capitalization: $123 million CAD) will provide its lithium extraction technology, which is nearing commercial deployment on several sites in Alberta, and take over the Kibby Basin Project as a financially strong operator with strong ties into the US. Belmont CEO, James Place, commented today in a separate press-release from Belmont: “This agreement puts Belmont on secure footing with regard to funding the next stage of evaluation of the Kibby Property and, at the same time, enables us to get a significant “leg up” on lithium production by partnering with one of the leaders in extraction technology.”

The Kibby Basin is probably the most prospective basin in Nevada to host lithium-enriched brine and its sheer size is compelling: "The target area is a large well-defined anomaly discovered by a magnetotelluric survey carried out by Belmont in January 2018."

In March 2018, Belmont received a Geophysical Report which included the results from a Spartan Magnetotelluric (MT) Survey over Belmont’s 100% owned Kibby Basin Property in Nevada. The survey was started in January by renowned Quantec Geoscience Ltd. and covered most of Belmont’s claims.

Now let’s take a look at the results:

 “Kibby has significantly higher conductivity than the other published MT survey results for similar lithium explorers in the region. We are optimistic that our lithium values will reflect that difference. If the results for conductivity relates to lithium concentration for the Kibby in the same way that other companies in the area have found, then Kibby could be a significant lithium brine source containing a conductive anomaly that is measured in cubic kilometres.” James Place, CEO & President of Belmont Resources Inc., in the press-release “Belmont submits drilling plans for Kibby basin” (June 14, 2018)

One of the best identified aquifers is interpreted to be 6 km long and 3.5 km wide, including a thick (up to 1 km) zone of very low resistivity (between 1 and 0.14 Ohm-meters; see 3D maps above).

Reading through several company’s technical reports and press-releases regarding resistivities (see comparison with other lithium projects here) gives me the impression that Kibby Basin’s resistivity results are very good and superior to many projects worldwide, especially to the ones that I have seen in the region. What I see in other company’s public information is that Kibby Basin’s best resistivity results are many times better than the best results of other companies, whereas Kibby Basin’s potential pay zone appears relatively large.

The  resistivity survey shows that the conductivity becomes greater as it goes deeper – so once the drillers hit brine, the concentrations should increase as they drill deeper until the center of the anomaly is hit.

With drilling to start now, we will soon find out if there is lithium in Kibby Basin. This could turn out big for both companies, so MGX agreed to acquire 4 million units of Belmont at a price of $0.05 CAD per unit, with each unit consisting of 1 common share of Belmont and 1 share purchase warrant exercisable 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 exercisable within 3 years. If MGX exercises all warrants, the company would own 18 million shares of Belmont, representing a significant stake in Belmont as the company currently has around 71 million shares issued and outstanding. 

Full size / Resistivity survey on the Kibby Basin Property in January 2018.

Full size / Satellite image of lithium prospective basins in Nevada. Source: GoogleEarth

Full size / The Kibby Basin (basin removed topography looking south-southwest; presumably this would be the topography if the basin fill was removed). 

Company Details

MGX Minerals Inc.
#303 - 1080 Howe Street
Vancouver, BC, Canada V6C 2T1
Phone: +1 604 681 7735 

Shares Issued & Outstanding: 122,655,926


Canadian Symbol (CSE): XMG
Current Price: $0.91 CAD (07/12/2018)
Market Capitalization: $112 Million CAD


German Symbol / WKN (Tradegate): 1MG / A12E3P
Current Price: €0.602 EUR (07/12/2018)
Market Capitalization: €74 Million EUR 

Technical Perspective

Updated Chart (15 min. delayed):

Previous Coverage

Report #65 “MGX-Highbury Expand Work to Gasify Petcoke into a Synthetic Crude Oil Equivalent“

Report #64 “MGX Delivers Update on Commercial Deployment of its Wastewater Treatment and Lithium Extraction Systems“

Report #63 “MGX is Drilling for Solar Grade Silicon Metal in British Columbia“

Report #62 “MGX-ZincNyx Now Ready To Start Commercialization Of Battery Systems For Mass Storage Of Energy“

Report #61 “MGX Minerals Raises $15,5 Million in an Oversubscribed Financing to Speed Up Lithium and Advanced Material Projects“

Report #60 “Sneak Preview of Big Oil Entering the Business of Big Batteries“

Report #59 “MGX Wins Industry Leadership Award from S&P Global Platts“

Report #58 “MGX Nears Commercial Deployment of 4 Petrolithium and Water Treatment Systems in Alberta“

Report #57 “MGX Announces Quadrupling of Power Output of Zinc-Air Fuel Cell Battery“

Report #56 “MGX Sets The Record Date For Its First Dividend“

Report #55 “The First ZincNyx Energy Storage Plant to be Deployed in New York City“

Report #54 “MGX in Final Stages of Commercial Deployment, Second Petrolithium Contract Already in the Making“

Report #53 “MGX-Highbury Accomplish Almost Complete Gasification of Petcoke, Produce High-Grade Vanadium Concentrate“

Report #52 “MGX Set to Alter Lithium Landscape, Partners with Investment Bank Heavyweight Capstone Headwaters“

Report #51 “Congratulations! MGX Nominated in 2 Categories as a Finalist for the S&P Global Platts Metals Awards“

Report #50 “MGX Gets Serious About Magnesium, Engages Hatch for Magnesium Metal Scoping Study“

Report #49 “MGX to Acquire and Commercialize Clean Technology for Extraction of Lithium and Aluminum from Spodumene“

Report #48 “MGX Minerals Issues PEA for a World-Class Magnesium Project in British Columbia“

Report #47 “High-Grade Battery Metals From Dirty Petcoke“

Report #46 “Big Times Ahead For Several Joint Ventures from MGX Minerals“

Report #45 “MGX Partner Broadcasting on US Television“

Report #44 “The Big Rethinking Begins: Multiple Lithium Projects in Chile Test the Rapid Lithium Extraction Technology from MGX“

Report #43 “Global Lithium Dominance? MGX Doubles Performance of Lithium Extraction Filters“

Report #42 “Scores of Tail Winds for MGX becoming a Leader in the New Energy Economy“

Report #41 “MGX Goes Big, Develops Utility-Scale Battery Storage System“

Report #40 “Positioned to Profit from Transition to New Energy Economy“

Report #39 “MGX Assembles Dream Team For California Lithium Strategy“

Report #38 “MGX: The Next GreenTech Energy Giant“

Report #37 “MGX Partners with Highbury Energy to make Petroleum Coke more Clean“

Report #36 “Technological Breakthrough in the Mass Energy Storage Industry“

Report #35 “Eureka! MGX Starts Developing Silica Projects after Acquisition of Mass Storage Battery Technology“

Report #34 “MGX Going Big on Petrolithium: The first large-scale integrated petroleum and lithium project ever developed“

Report #33 “Driving into the Realms of Tesla & Co: MGX Acquires Mass Storage Battery Technology from Teck Resources“

Report #32 “Backed by Private and Institutional Heavyweights: MGX cashes up for Lithium Extraction and Exploration“

Report #31 “MGX Revolutionizes the Lithium World - Commissions First Rapid Lithium Extraction System“

Report #30 “Full Steam Ahead: MGX Engages Senator Polanco (Ret.) to Head California Lithium Brine Strategy“

Report #29 “MGX to Target Geothermal Market for Extraction of Lithium and Gold“

Report #28 “MGX Minerals Commences Development of the World‘s First Petrolithium Field“

Report #27 “Canadian Government Backs MGX Minerals‘ Petrolithium Cleantech“

Report #26 “MGX Minerals Solves the Magnesium Problem of the Lithium Industry“

Report #25 “Hard-Rock Lithium Exposure for MGX“

Report #24 “One of the Largest Initial Oil Estimates in US History“

Report #23 “MGX starts Petrolithium pilot plant to deliver hard facts for strategic partners“

Report #22 “Time to bet: Sprott takes a position in MGX“

Report #21 “Petrolithium: First Come First Served“

Report #20 “Successful Independent Verification of the MGX Lithium Extraction Technology“

Report #19 “MGX to Drill the World‘s First PetroLithium Well in Utah“

Report #18 “MGX Reports Upgrading of Lithium Brine from 67 to 1600 ppm Lithium“ 

Report #17 “MGX technology nominated for prestigious Katerva Award, the Nobel Prize of Sustainability“ 

Report #16 “Unconventional oil play legend Marc Bruner to take MGX and PetroLithium to the next level“ 

Report #15 “Total Conviction: MGX forms PetroLithium Corp. to expand into the US oilfield brine markets“ 

Report #14: “MGX Extracts Lithium from Oil Wastewater - Begins Monumental Integration with Big Oil“

Report #13 "MGX Partners with Oil Major on Lithium Brine, New Energy Industry Facing Fundamental Shift“

Report #12 "Game Changing Potential: MGX Minerals‘ Pilot Plant for Rapid Production of Lithium Nears Completion“

Report #11 "MGX assays 34 g/t gold from surface sampling in British Columbia“

Report #10 “Official: MGX owns magnesium worth multi-billions of dollars and starts pilot plant shortly“

Report #9 “One of the world‘s largest lithium resources on the horizon?“

Report #8 “Ready for significant lithium brine work in Alberta“

Report #7 “At the forefront of Alberta‘s lithium brine riches“

Report #6 “Pioneering Lithium in Alberta: MGX Minerals Teams Up“

Report #5 “Time to Put a Lithium Production Process in Place“

Report #4 “MGX Minerals Taps Into Canada‘s Potentially Largest High-Grade Lithium Resources“

Report #3 “MGX Minerals Receives Mining Lease for 20 years (in British Columbia!)“

Report #2 “MGX Minerals Accelerates Towards Production“

Report #1 “MGX Minerals Plans To Enter The Magnesium Market“

Company Details

Belmont Resources Inc.
Suite 600 - 625 Howe Street
Vancouver, BC, V6C2T6 Canada 
Phone: +1 604 683 6648

Shares Issued & Outstanding: 70,727,620


Canadian Symbol (TSX.V): BEA
Current Price: $0.065 CAD (07/12/2018)
Market Capitalization: $5 Million CAD


German Symbol / WKN (Frankfurt): L3L1 / A1JNZE 
Current Price: €0.042 EUR (07/12/2018)
Market Capitalization: €3 Million EUR 

Technical Perspective

Updated Chart (15 min. delayed): 

Previous Coverage

Report #11: “Ohm-m! The Divine Sounding of Resistivity” 

Report #10: “Belmont Resources (BEA.V): Cheapest US lithium play may just be what others promised” 

Report #9: “It‘s Time For Belmont To Shine In Nevada” 

Report #8: “Bingo! Belmont finds striking drill targets for lithium brine deposits at Kibby Basin in Nevada” 

Report #7: “The Missing Puzzle Piece to Discover Lithium Aquifers in the Kibby Basin of Nevada?” 

Report #6: “Belmont on track to eclipse the Clayton Valley” 

Report #5: “Belmont getting ready to drill for untapped lithium brines at Kibby Basin in Nevada” 

Report #4: “The perfect lithium basin?”

Report #3: “Prominent gravity low identified on Kibby Basin Lithium Brine Property in Nevada” 

Report #2: “Dark clouds over Clayton Valley and green lights for Belmonts Kibby Basin Project” 

Report #1: “Early Report on Belmont Resources”

Disclaimer: This report contains forward-looking information or forward-looking statements (collectively "forward-looking information") within the meaning of applicable securities laws. Forward-looking information is typically identified by words such as: "believe", "expect", "anticipate", "intend", "estimate", "potentially" and similar expressions, or are those, which, by their nature, refer to future events. Rockstone Research and MGX Minerals Inc. cautions investors that any forward-looking information provided herein is not a guarantee of future results or performance, and that actual results may differ materially from those in forward-looking information as a result of various factors. The reader is referred to the MGX´s public filings for a more complete discussion of such risk factors and their potential effects which may be accessed through the MGX´s profile on SEDAR at www.sedar.comPlease read the full disclaimers for both featured companies within the full research reports as a PDF (here and here) as fundamental risks and conflicts of interest exist. The author, Stephan Bogner, holds a long position in MGX Minerals Inc. and Belmont Resources Inc. and is being paid a monthly retainer from Zimtu Capital Corp., which company also holds a long position in MGX Minerals Inc. and Belmont Resources Inc.

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Name: MGX Minerals Inc.
Canada Symbol: XMG
Germany Symbol / WKN: 1MG / A12E3P
Shares Issued & Outstanding: 122,655,926
Phone: +1 604 681 7735

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