Today, MGX Minerals Inc. confirmed to have received and processed a first shipment of 40m3 wastewater brine from an oilsands producer in Alberta, Canada. The system treated highly concentrated evaporator blowdown (“EBD”) wastewater and will provide significant cost savings for the customer. This marks the historic beginning of an impressive revenue and growth cycle for MGX and its subsidiary, engineering partner PurLucid Treatment Solutions Inc.
Already recognized as a world leader in lithium extraction and water treatment by Standard & Poors Global Platts Metals as the winner of the Leadership Award in Base & Speciality Minerals 2018 and double nominated for the Standard & Poors Energy Awards this December, MGX’s cutting-edge petrolithium technology is able to clean highly toxic oil production wastewaters.
What makes this all the more attractive, especially for other oil producers globally to adopt this low energy, low cost and low CAPEX technology, is that nobody – except MGX/PurLucid – can do this.
On top of that, the environmentally friendly technology is able to rapidly extract minerals, such as lithium wherever there is this valuable mineral after the cleaning of the wastewater, thus providing a second potential revenue stream. Conventional lithium production from brine comes from capital and water intensive as well as space and time consuming evaporation ponds (12-18 months lead time versus less than 1 day when using the MGX/PurLucid technology).
MGX has demonstrated this technology and is now scaling up.
Becoming A World Leader
“Innovation distinguishes between a leader and a follower.” (Steve Jobs)
The first petrolithium plant, which just began processing at a centralized site in Edmonton, has a capacity of 750 barrels/day (5m3/hour). The next deployment, set for January, is connected to an $8.2 million CAD grant from the Alberta and Canadian Governments as part of a program to "accelerate development of innovative technologies that reduce GHG emissions" and to "support Canadian companies with the potential to become world leaders in their efforts to develop and demonstrate new environmental technologies that address climate change, clean air, clean water and clean soil".
The Daily Oil Bulletin (DOB), the "most trusted source of exclusive news, data and analysis for Canada’s oil and gas industry", reported last week that "Connacher To Field Test Purlucid Water Treatment Tech For Lower Costs, GHGs". While light on details, this exclusive article stated that the government-funded technology "could significantly reduce operating costs and GHG emissions related to SAGD water treatment". Further, that Connacher Oil & Gas Ltd. has just received the permit from the AER (Alberta Energy Regulator) for the 1,500 bpd (barrels per day) high temperature, high pressure water treatment system at its Great Divide/Algar site south of Fort McMurray.
In last week’s interview, Lazerson noted that "It is a real achievement to get these approvals. We are the only ones that can do deal with this type of wastewater inline and have the approvals. I am very proud of PurLucid and this achievement. It speaks to an extremely high level of professionalism."
Connacher is a Calgary-based in-situ oilsands developer and producer with a 100% interest in approximately 465 million barrels of proved and probable bitumen reserves, operating 2 SAGD ("Steam-Assisted Gravity Drainage") facilities in Alberta with a current production of approximately 11,000 barrels per day. Recently, Connacher was acquired by East River Oil & Gas Ltd., a private US-based oil and gas major.
In Connacher’s application to the AER, PurLucid noted that "Once successful treatment of produced water is achieved, the industry may be able to realize a large reduction in the energy and GHG intensity of heavy oil production from steam injection. Estimates by an independent auditor for SDTC/ERA indicate that reasonable adoption of the technology could reduce GHG emissions in Alberta by over one million tonnes a year in 2022 and by over two million tonnes a year by 2026.”
According to the DOB article, "The pilot will seek to confirm GHG reductions of 60 to 200 kilotonnes per year based on a standard 33,000-bbl/d SAGD facility using existing technology, as well a 60 to 70 per cent reduction in capital costs and 40 per cent reduction in operating costs."
Alberta is responsible for about 80% of Canada’s total crude oil production. As the world’s 8th largest producer of oil and gas, Alberta is home to the largest oilsands mines in the world and correspondingly represents Canada’s largest GHG emitter. The federal and provincial governments are working closely with the industry to find solutions to reduce GHG emissions and make Alberta more environmentally friendly. The MGX/PurLucid technology may very well emerge as a solution to reduce GHG emissions and clean highly toxic wastewaters from the production of oil and gas.
Making Canadian Oil Competitive
While global oil prices have been falling dramatically over the last months, Canadian oil has been hit the hardest. Reducing operational costs is one of the solutions for Canadian oil to become more competitive again.
In mid-November, MGX announced to have received notice of publication of a patent for low-cost combined heat and power cogeneration for heavy oil and oilsands producers. The new technology feature combines steam and electricity production with the existing wastewater treatment and mineral extraction technologies. MGX’s new method generates electricity with pure water and mineral extraction, such as lithium and vanadium as by-products from contaminated oil and gas production wastewaters. MGX aims to make the Canadian heavy oil and oilsands industry not only more environmentally friendly but more competitive on a global scale.
The new technology design "substantively reduced cost and energy requirements while providing electricity for sale or internal use", the company stated. "When applied to heavy oil production in Alberta, the system can reduce the greenhouse gas emissions from 2.45 tpd/bbl capacity (0.48 tonnes / m3 of produced oil) to 1.19 tpd/bbl capacity (0.11 to 0.15 tonnes / m3 of produced oil). This reduces the energy requirement and associated GHG intensity by over 70%, making it similar to conventional oil recovery in other areas. In addition, because the capital used has revenue from both electricity and oil production, the cost of electricity production is comparable to the lower 25% of the market cost in North America and the cost of heavy oil production becomes similar to costs to produce light crude oil in the middle east."
The advanced system was designed within a consortium, including MGX, PurLucid and David Bromley Engineering Ltd. for the generation of electricity and excess steam for thermal oil recovery and extraction of minerals. This MGX-led consortium also includes power production, engineering and high-power demand clients evaluating opportunities for large-scale, low-cost power production.
In early November, Jared Lazerson gave an interview in which he, for the first time, talked about projected revenue from the wastewater treatment business.
The first petrolithium plant (NFLi-5), which just started commercially with a capacity of 750 barrels/day (5m3/hour), is projected to generate up to $1.7 million in revenue under full use on an annualized basis, with a CAPEX of about $750,000 USD. MGX owns this plant, PurLucid is the contractor, and revenue is split 80/20 for MGX (20% goes to PurLucid as a management fee).
With a capacity of 1,500 barrels/day, the second petrolithium plant (NFLi-10) is twice as big as the first one and comes with a CAPEX of about $4 million USD as it has titanium parts (it can handle more pressure, heat, etc. and is high end, long life). This second deployment, as previously described in the Daily Oil Bulletin and recently permitted, will go to the oilsands SAGD site and is government grant funded.
The third petrolithium plant will be ready in late Q1 or early Q2 of 2019, will go to an additional SAGD facility and also has a capacity of 1,500 barrels/day.
The fourth petrolithium plant (NFLi-20), already in fabrication, will have a capacity of 3,000 barrels/day at a CAPEX of $2.7 million USD. This plant is being built for MGX, which has not disclosed on the final deployment location, but with projects in oilsands, Western USA, and South America, we can only guess what MGX has planned.
In total, these 4 systems alone have capacity to generate up to $15.3 million in revenue annually based on current oilsands projects under full capacity, that is to say without any by-product credits from the extraction of lithium and other minerals.
In the not too distant future, we may look back at this time as Lazerson started to make reality of his visionary efforts to "provide solutions to the most important of global problems" as he stated in October. "The combination of cleaning wastewater and extracting minerals sets the stage for a bright future for MGX as we move into the revenue phase of our growth cycle with this globally applicable, low capital intensive, and most importantly, scalable technology."
Over the last few years, the stage has been set. Now, the curtain is opening and MGX appears as the principal performer transitioning the energy industry to the next, environmentally friendly level, creating values for shareholders and stakeholders along the road. MGX appears to have taken the lithium and water world by storm with unrivalled technology and a determination that reminds of us of some of the great innovators of our time. Having raised over $25 million in the past 12 months plus an additional $8 million financing announced last Friday and open for investment, MGX appears to have the horsepower behind them of major investment funds such as Sprott to purchase equipment and push the envelope even further in 2019.
“This technology represents a landmark shift in environmental services and, where there are significant concentrations of lithium, a by-product that, with the rapidly increasing demand for lithium, may now represent to the energy industry, a shift similar to that which resulted from the commercialization of natural gas. There is no doubt that on a daily basis in North America the oil and gas industry generates far more wastewater brine feedstock containing lithium (LiCl) then current global commercial lithium brine operations, largely due to the very long time solar evaporation takes, the traditional method of lithium brine extraction. As natural gas was once seen as a hinderance or waste product, to be flared off, there is a similar parallel to wastewater treatment and mineral extraction. The potential to offset surging wastewater management costs with our technology both in direct processing of water and, where applicable, extraction of lithium, may begin to solve the single biggest ancillary cost in oil & gas today. I am proud to say this technology driven shift began last week.” (Jared Lazerson, CEO of MGX Minerals, on November 26, 2018)
MGX Minerals Inc.
#303 - 1080 Howe Street
Vancouver, BC, Canada V6C 2T1
Phone: +1 604 681 7735
Shares Issued & Outstanding: 125,324,075
Canadian Symbol (CSE): XMG
Current Price: $0.62 CAD (11/23/2018)
Market Capitalization: $78 Million CAD
German Symbol / WKN (Frankfurt): 1MG / A12E3P
Current Price: €0.41 EUR (11/23/2018)
Market Capitalization: €51 Million EUR
Report #83 “MGX Starts Petrolithium Revenue And Growth Cycle Next Week"
Report #82 “New MGX Patent To Make Heavy Oil And Oilsands Producers Much More Competitive"
Report #81 “Belmont reports final lithium assays from first hole of 2018 and gets ready for continued drilling at Kibby Basin in Nevada"
Report #80 “MGX-Belmont Announce Next Round of Encouraging Lithium Drill Results from Nevada"
Report #79 “MGX-Belmont sample up to 580 ppm lithium in sediments at Kibby Basin Nevada Joint Venture"
Report #78 “MGX Identifies Large Geophysical Anomaly at Salinitas Lithium Project, Salinas Grandes, Argentina"
Report #77 “MGX-PurLucid Achieve 99.7% Lithium Recovery Along With Breakthrough in Component Costs"
Report #76 “MGX-Belmont Drilling Finds Multiple Brine Prospective Zones at Kibby Basin Lithium Joint Venture in Nevada"
Report #75 “MGX engages one of the world‘s most respected lithium upgrading and commercial scale-up experts"
Report #74 “MGX-ZincNyx start product certification for the mass market"
Report #73 “MGX-ZincNyx Announce Mass Production of Zinc-Air Battery Fuel Cell and Charging Components"
Report #72 “MGX Moves to the Big Time, Acquires Chilean Lithium Brine Projects"
Report #71 “MGX provides Update on Deployment of Several Plants for Rapid Lithium Extraction and Wastewater Treatment in Alberta“
Report #70 “The Drills are Turning at MGX-Belmont‘s Kibby Basin Lithium Joint Venture in Nevada“
Report #69 “MGX Engages Hatch Engineering for Scale-Up of its Rapid Lithium Extraction Plant in the Western United States“
Report #68 “MGX and Belmont to Start Drilling at Kibby Basin Lithium Project in Nevada on Saturday“
Report #67 “MGX Expands to Argentina, Home to One of the Largest and Richest Lithium Resources in the World“
Report #66 “MGX and Belmont Form Nevada Lithium Joint Venture at Kibby Basin“
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 #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“
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.com. Please read the full disclaimers for both featured companies within the full research reports as a PDF (here) as fundamental risks and conflicts of interest exist. The author, Stephan Bogner, holds a long position in MGX Minerals Inc. and is being paid a monthly retainer from Zimtu Capital Corp., which company also holds a long position in MGX Minerals Inc.