Today, MGX Minerals Inc. announced results from the successful commissioning of its first wastewater treatment system currently under contract with a major oilsands SAGD producer in Alberta, Canada.
The commercial-scale 5m3/hour (750 barrel/day) NFLi-5 advanced wastewater treatment system is capable of processing evaporator blowdown water (EBD) and started operations in late November 2018.
Today‘s reported commissioning results are based on a 3-week study period in December 2018 and demonstrate that the system was “highly successful in achieving all treatment chemical key performance indicators“, the company stated. “Most notable were treatment outcomes, which included removal of silica, calcium and magnesium totaling 99.7%, 88% and 72%, respectively. Additionally, total suspended solids in the treated product were non-detectable, effectively creating a clean water by-product for reuse.“
This now marks the historic achievement of having successfully deployed a fully functional commercial system capable of cleaning highly contaminated EBD production wastewaters from the oilsands industry. No other company can achieve such on a commercial-scale, which gives MGX Minerals a prominent first mover advantage in this multi-billion industry eagerly looking for ways to significantly reduce operational costs and environmental footprints (e.g. GHG emissions and toxic wastewater disposal).
The innovative cleantech company recorded $30,000 CAD in revenue during this 3-week commissioning period, whereas potential revenue from the extraction and sale of lithium is not included. Significant upside from both revenue streams is possible. This initial start-up is in preparation for an additional in-line deployment of a new 10m3/hour (1,500 barrel/day) system, which is now underway.
Below table provides a summary of the average results (all permeates combined) for each of the 3 weeks:
Most importantly, hourly throughput during the commissioning phase was also reported as “stable and optimization of control systems were successful in maintaining flow balance, overcoming any concerns of outdoor operations in cold weather conditions“. In other words: No technical issues were recorded; the system runs smoothly and performs successfully.
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. MGX has now effectively demonstrated this technology and is already scaling up.
The next deployment of the 10m3/hour (1,500 barrel/day) system 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 oilsands operator has already received the permit from the AER (Alberta Energy Regulator) for this 10m3/hour high temperature, high pressure water treatment system at its Great Divide/Algar site south of Fort McMurray. MGX‘s CEO, Jared Lazerson, said in an interview 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“.
In the oilsands producer‘s application to the AER, MGX‘s engineering partner PurLucid Treatment Solutions Inc. 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 a Daily Oil Bulletin 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 to make Alberta more environmentally friendly. The MGX/PurLucid technology is poised to emerge as a key solution to reduce GHG emissions and clean highly toxic wastewaters from the production of oil and gas.
The first petrolithium plant (NFLi-5), which already started commercially with a capacity of 750 barrels/day (5m3/hour), was 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 under full capacity, that is to say without any potential by-product credits from the extraction of lithium and other minerals, not to speak of the possible deployment of many more systems during 2019.
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. “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 has taken the lithium and water world by storm with unrivalled technology and a determination that reminds of some of the greatest innovators of our time.
Having raised over $25 million since 2017, plus an additional $8 million most recently, MGX is backed by the horsepower of major investment funds, such as Sprott, to purchase equipment and push the envelope even further in 2019.
It‘s “Go Time“ for MGX to change an entire industry for the better, with an easily adoptable, environmentally friendly cleantech solution.
“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: 139,069,193
Canadian Symbol (CSE): XMG
Current Price: $0.385 CAD (01/16/2019)
Market Capitalization: $54 Million CAD
German Symbol / WKN (Frankfurt): 1MG / A12E3P
Current Price: €0.265 EUR (01/16/2019)
Market Capitalization: €37 Million EUR
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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. Cautionary Statement: MGX Minerals Inc. (“MGX“) may decide to advance its petrolithium projects into production without first establishing mineral resources supported by an independent technical report or completing a feasibility study. A production decision without the benefit of a technical report independently establishing mineral resources or reserves and any feasibility study demonstrating economic and technical viability creates increased uncertainty and heightens economic and technical risks of failure. Historically, such projects have a much higher risk of economic or technical failure. Please read the full disclaimer within the full research report as a PDF (here) as fundamental risks and conflicts of interest exist. MGX Minerals Inc. has paid Zimtu Capital Corp. to provide this report and other investor awareness services.The author, Stephan Bogner, holds a long position in MGX Minerals Inc. and is being paid by Zimtu Capital Corp. for the preparation and distribution of this report, whereas Zimtu Capital Corp. also holds a long position in MGX Minerals Inc.