Shares in MGX Minerals (XMG.CD) have doubled this year as investors seek exposure to the predicted electric vehicle revolution that many of the conventional resource firms do not provide.
It has acquired acreage that establishes it as Canada’s biggest holder of lithium brine assets with around 2 million acres’ worth in North America.
Much of it is in the Paradox Basin in Utah, which could position MGX to provide lithium to Tesla’s (TSLA.O) battery factory in neighboring Nevada. MGX CEO Jared Lazerson said commercial confidentiality rules meant he could not comment on whether any agreements had been signed.
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Lithium is not rare and some analysts say high prices will prove a bubble as more production comes online. Processing capacity, however, can be an issue and auto makers are locking in contracts with suppliers.
Lazerson says MGX’s advantage as the car industry wakes up to its need for lithium for battery-powered electric vehicles is that it can bring on production quickly and at a relatively low capital cost using brine wastewater in oilfields. Economics are favorable as lithium production effectively boosts the oil price.
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Lazerson says pilot projects using oilfield brine have been successful and the aim is to ramp up to processing 1,200 cubic meters of brine per day around the end of the year. So far it has processed up to 20 cubic meters per day.
MGX seeks to keep capital expenditure low and to maximize what Lazerson says is first-mover advantage by using small nanofiltration units that can be moved to wherever the brine is.
Read more at Canada's MGX Minerals Sets Out to Lead Way from Oil to Petrolithium
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