MGX Minerals Advances BC Magnesium Project Towards Preliminary Economic Assessment

VANCOUVER, Sept. 27, 2016 /CNW/ - The needle moved almost immediately, when Canadian-based MGX Minerals [CSE:XMG] [Frankfurt: 1MG] announced a massive, high-grade resource estimate on their Driftwood property.

Today the company has announced the official filing of the 43-101 Report on the Driftwood, located in British Columbia, Canada. With the filing, the company has also officially moved into the Preliminary Economic Assessment (PEA) phase of the project.

Less than a month ago, over the Labour Day long weekend, the company's shares closed at 50% higher by market close in the European markets.

Known as the Driftwood Property, located in British Columbia, the project's resource was estimated at more than 8 million tonnes of magnesium-oxide (MgO) grading at 43.31%.

Analysts at Rockstone Research http://www.rockstone-research.com/index.php/en/research-reports/1611-Official:-MGX-owns-magnesium-worth-multi-billions-of-dollars-and-starts-pilot-plant-shortly made the case that the in-situ value of such a resource was greater than $1.3 billion USD, using current market prices on MgO are going for more than $400 USD/t.

As impressive as that valuation was, the Rockstone Research Report also highlighted the potential for production of pure magnesium metal (Mg), which currently sells for $4,000 USD/t in the US (global price being approximately half that). According to their estimates, Driftwood's 8 million tonnes of MgO could potentially produce 1.7 million tonnes of Mg, for an in-situ value of about $6.8 billion if sold to the US market.

Given how 80% of the world's magnesium comes from China, this discovery was a welcome sight for global magnesium buyers. Reducing the supply risk by having a nearer production operation helps all consumers of the metal.

For MGX, the project is incredibly promising. With a shall depth of less than 100m from the surface, and very high grades or nearly half magnesium (43.31%), Driftwood has a pair of positive markings.

Beyond the 8 million tonne measured plus indicated (M+I) resource itself, Driftwood also has an additional 846,000 tonnes grading 43.2% MgO inferred. As well, the project has the potential for opportunities to expand the mineral resource both along strike and at depth with some additional drilling.

According to MGX's current corporate presentation, the company had already targeted Winter of 2016-17 for a Mine Plan and Operating Permit Application on the proposed Driftwood magnesium mine.

Where MGX has a logistical advantage over current Asian magnesium production facilities is that the Driftwood Creek operation won't produce any tailings. When getting permits for mines, environmental advantages can be crucial, especially in jurisdictions like British Columbia.

Driftwood's advantages in this area have led MGX's management to believe that it is entirely possible for the company to be in production by the end of 2016. (http://www.proactiveinvestors.com/companies/news/123152/mgx-minerals-thinks-outside-the-box-in-pursuit-of-grand-goal-123152.html)

MGX received a 20-year mining lease for Driftwood Creek back in January. Since then they've conducted two rounds of diamond drilling, and somewhat recently completed a 100-tonne bulk sample program.

The company is already in the process of transporting and assembling a pilot plan, near the completed 100-tonne bulk sample's current stock-pile location.

Through the pilot program at the new mill, MGX plans to process mineralized bulk sample materials using reverse flotation to produce both a high-purity magnesite tailing, and a silica sand float by product.

MGX will then be shipping the magnesite materials (MgCO3) off site to receive calcination optimization testing, in order to produce MgO, as well as undergo thermal and electrolytic analysis to produce pure Mg metal.

As part of its drive toward its magnesium production goals, MGX recently successfully fundraised through a trading rights offering (CSE: XMG.RT), with the net proceeds to be used for both the Driftwood magnesium flagship project and its bluesky lithium projects.

The Driftwood resource estimate came on the heels of MGX's recent announcement of a potential major lithium brine acquisition within neighbouring Canadian province, Alberta.

MGX's Sturgeon Lake Brine acquisition came with a 2-million tonne lithium resource estimate, with the catch being that the resource is not-yet NI 43-101 compliant. The company continues to work towards proving the project's lithium can be produced, which comes with the ongoing testing of their chemical separation processing pilot project. Strategic partnerships have been made in the lead up to MGX's lithium brine pilot program.

In the meantime, this round of advancement for the 8 million tonne resource is big news for MGX Minerals, as well as the BC mining sector as a whole.

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SOURCE StockSocial.com

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