MGX Signs Definitive Agreement to Acquire Lithium Brine Projects in Chile - Permitting in Place to Commence Drill Program
October 09 2018 - 8:00AM
InvestorsHub NewsWire
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MGX Signs
Definitive Agreement to Acquire Lithium Brine Projects in Chile –
Permitting in Place to Commence Drill
Program
Vancouver, BC --
October 9, 2018 -- InvestorsHub NewsWire -- MGX Minerals
Inc. (“MGX” or the “Company”) (CSE:
XMG / OTCQB:
MGXMF / FSE:
1MG)
is pleased to announce it has signed the Definitive Option
Agreement, after completing the due diligence in relation to the
Memorandum of Understanding dated August 8th 2018, to
acquire 50% of the issued shares of Chilean Lithium Salars SpA
(“CLS”). CLS is a wholly owned subsidiary of Chilean Lithium Salars
Pty Ltd. (“CLSH”) and holds a 100% interest in three prospective
lithium exploration Projects (the “Projects”) located in Chile,
including Francisco Basin, Laguna Brava and Laguna Escondida
Lithium Projects.
Two samples from
the Laguna Brava Project were received at PurLucid Treatment
Solutions Inc. (“PurLucid”) facilities in Calgary, Alberta to
undergo pilot testing to prepare a Rapid Lithium Extraction unit
deployment. Drilling contractors will be on site this week to
prepare the drilling program at Francisco Basin Project, which will
be overseen by SRK Consulting to deliver a 43-101 complaint
Resource Estimation as soon as the exploration program is
completed.
Following the
positive response from the Chilean state agency National Geology
and Mining Service (“SERNAGEOMIN”) and the Environmental Assessment
Service (“SEA"), the Company plans to ship a rapid lithium brine
system shortly. The Special Lithium Operation Contract “CEOL”, is a
requirement to carry any lithium related commercial activity in
Mining Concessions granted after 1983.
Francisco
Basin Lithium Project
The Francisco
Basin lithium project (“Francisco Basin”) is located 30km south of
Maricunga salar, 100 km southeast of the regional center of Copiapo
and accessible via a regional highway and established tracks. The
lease area comprises 12,900 hectares. Historical exploration work
on the project was previously limited to hydrology studies. In
January 2018, CLSH completed a reconnaissance brine sampling at the
project. This sampling confirmed the presence of lithium enrichment
in the surface brines. The samples were assayed at the University
of Antofagasta (“Antofagasta”), Antofagasta, Chile which has one of
the two leading laboratories in the world for this type of brine
analysis. In May 2018, sampling continued and a 2.5L sample was
taken near the southern shore of the surface Northern lagoon and
sent to Servicios Quimicos Ltda. (“SERQUIM”), Antofagasta, Chile
for content analysis. CLSH reported results to date are shown in
Table 1.
A geophysical
program comprising an electromagnetic survey was completed in April
2018. The survey was based on a grid of sections which indicated
the presence of high conductivity brines in two zones with
significant thickness and horizontal coverage. The presence of
anomalous lithium levels in the water body area located in the
Northern lagoon, which is potentially underlain by a fault bound,
saturated basin of undetermined thickness and the presence of
widespread felsic to intermediate volcanic rocks as a lithium
source.
Table 1.
Francisco Basin Assay Samples
Sample |
Na g/L |
K g/L |
Li ppm |
Mg g/L |
SO4 g/L |
B ppm |
Dens |
Northern Lagoon - January
2018 |
LNF 01 |
75.2 |
4.59 |
372 |
2.00 |
4.07 |
799 |
1.179 |
LNF 02 |
72.5 |
4.34 |
372 |
1.92 |
4.07 |
832 |
1.170 |
LNF 03 |
69.5 |
4.06 |
369 |
1.85 |
3.74 |
767 |
1.163 |
LNF 04 |
74.5 |
4.32 |
374 |
1.75 |
4.02 |
832 |
1.174 |
LNF 05 |
80.0 |
4.40 |
388 |
1.78 |
4.71 |
961 |
1.188 |
LNF 06 |
67.9 |
3.98 |
361 |
1.73 |
3.85 |
821 |
1.181 |
LNF 07 |
79.8 |
4.66 |
387 |
1.74 |
4.44 |
864 |
1.183 |
LNF 08 |
73.4 |
4.31 |
371 |
1.86 |
3.93 |
842 |
1.172 |
LNF 09 |
76.8 |
4.39 |
374 |
1.70 |
4.05 |
864 |
1.174 |
LNF 10 |
80.0 |
4.56 |
384 |
1.86 |
4.38 |
896 |
1.185 |
Northern Lagoon - May
2018 |
LNF 01 |
103.0 |
6.62 |
694 |
3.54 |
28.70 |
- |
- |
Southern Lagoo - January
2018 |
LNF 11 |
2.35 |
0.19 |
7.9 |
0.15 |
3.07 |
248 |
1.007 |
LNF 12 |
0.57 |
0.41 |
3.0 |
0.003 |
1.55 |
151 |
1.121 |
LNF 13 |
1.27 |
0.01 |
0.4 |
0.07 |
0.61 |
65 |
1.002 |
The Francisco
Basin salar is within a large, fault-bound, alluvium-filled basin
to the immediate south of the Copiapo Volcano. The basin is closed,
drains a large area and the salar appears to be the lowest point
within the drainage.
The rocks in the
drainage surrounding this salar are dominantly volcanic, ranging in
age from Eocene to Miocene, juxtaposed with some older rocks. To
the west is a Cretaceous sedimentary sequence separated from the
volcanic rocks of the Francisco Basin area by the Cerro Guerrita
Fault. To the east, an older Oligocene to Miocene volcanic sequence
is overlain by the Copiapo volcanic rocks.
The Francisco
Basin alluvial basin sits at the junction of three catchments.
These river systems presumably provide the fill for the basin and
are in part, along with the limits of the salar, structurally
controlled. The alluvial fill may be covering post-Copiapo aged
faulting.
Laguna
Brava Project
The Laguna Brava
salar (“Laguna”) is geologically prospective for lithium brine. The
catchment is large and dominated by volcanic rocks, many of which
have been altered by hydrothermal fluids associated with volcanism.
The lake is also fed by active hot springs. Historical sampling of
surface brines indicated significant lithium enrichment. In
December 2017, CLSH undertook a four-hole reconnaissance drilling
program at a southern access point of the salar to investigate the
deeper aquifer. Prior to the CLSH reconnaissance drilling program
in December 2017, no previous work had been undertaken to assess
the volume and grade of the subsurface resource. Previous work
recommended that the subsurface brines be investigated on the basis
of his conclusion that Laguna Brava is geothermally fed. The
presence of hot springs being present either at the margins or
beneath salars is common within the Chilean Altiplano, other
notable locations include the Salar de Coposa in Region I and Salar
de Atacama in Region II. The principal origin of lithium in the
Salar de Atacama is interpreted to be the lithium-bearing
geothermal waters from the El Tatio Geyser Field, located north of
the salar. The geothermal fluids enter the northern part of the
Salar de Atacama via surface and subsurface flow. It has also been
reported that the chemistry of the salar brines is almost identical
to the chemistry of the geothermal fluids of El
Tatio.
Furthermore, work
by Risacher et al., (2003) has shown that subsurface brines
contained within the volcanic geology are of a much higher
concentration, typically 250,000–350,000 mg/L TDS. Given this
hypothesis, CLSH commissioned a reconnaissance drilling program in
December 2017 comprising four bores; the locations are shown in
Figure 6-4. Two bores reached the design depth of 120 m, and the
other two bores were abandoned due to collar collapse because of
high water flows. The results from this program confirmed the
presence of lithium at depth. Results were as follows
(Sanchez, 2018):
Table 2. Assay
Results from Reconnaissance Drilling
Bore |
No. of
Samples |
Li
(mg/L) |
Na
(mg/L) |
K
(mg/L) |
Mg
(mg/L) |
So4
(mg/L) |
B
(mg/L) |
Density |
LBRC001 |
5 |
190 |
31860 |
1842 |
1453 |
8726 |
504 |
1.066 |
LBRC002 |
11 |
167 |
28376 |
1635 |
1175 |
8189 |
494 |
1.058 |
LBRC003 |
24 |
184 |
30979 |
1730 |
1288 |
8995 |
536 |
1.064 |
LBRC004 |
16 |
201 |
34059 |
1999 |
1587 |
8513 |
519 |
1.071 |
Average |
185 |
31,320 |
1800 |
1375 |
8605 |
515 |
1.065 |
Figure 1.
Location of Laguna Brava 2018 Reconnaissance
Drilling
![](https://investorshub.advfn.com/uimage/uploads/2018/10/9/ihnw-TPQGGVAUVTAMWVKZXBYKPU.png)
A geophysical
program comprising electromagnetic and gravity surveys was
completed by CLSH in February 2018. The electromagnetic survey
based on sections around the periphery of the salar indicated the
presence of high conductivity brines exceeding 100 meter thickness
at the margins of the salar. The survey indicated that drill holes
completed prior to the program were in an area with brines of
relatively low conductivity.
Within the
vicinity of the Laguna Brava salar, the Project includes additional
concessions covering Lagunas del Gilguero and the southern margin
of Piedra Parada.
Laguna
Escondida Salar
The Laguna
Escondida project (“Laguna Escondida “) is located approximately
200 km east–northeast of the regional capital and is accessible via
a provincial highway to within 10–15 km of the
project.
Regional
Geology
The Portfolio of
projects are located within the Central Volcanic Zone in the
foothills of the Andes mountain range on the eastern side of Chile.
All the projects are located at altitudes exceeding 4,000 m. The
geology of this region, like the rest of Chile, is dominated by the
eastward subduction zone under the entire country generating uplift
that has created the Andes Mountains and the Coastal Cordillera
(Moreno and Gibbons, 2007). This subduction has intensely deformed
the older rocks and generated volcanic activity that spans
geological history from the Mesozoic to the
present.
Figure 2.
Location of Laguna Brava, Francisco Basin and Laguna Escondida
project
![](https://investorshub.advfn.com/uimage/uploads/2018/10/9/ihnw-TPQGGVAUVTAMWVKZXBYKPUBRNGR.png)
Terms of
the Option Agreement
To acquire an
undivided 50% interest in CLS, MGX has agreed to make Option
Payments totaling US$1.5 million. The first US$100,000 portion of
the Option Payments are payable in cash at the discretion of CLS
while the remainder of Options Payments will be payable in common
shares of the Company. MGX has agreed to incur exploration
expenditures totaling US$2 million and also complete an NI 43-101
resource estimate on at least one of the Projects no later than 20
months after the Effective Date of the MOU. MGX will act as project
operator and appoint Mr. Aldo Boitano, current project manager for
CLS, as project manager to work alongside Kura Minerals. CLSH shall
contribute an equal amount of expenditures to maintain its
respective interest in CLS. MGX also maintains the right to
participate as a service provider of the engineering, construction
and/or procurement of a brine processing plant using its rapid
lithium extraction technology. Closing of the transaction remains
subject to due diligence.
Rapid
Lithium Brine Extraction
Technology
MGX has developed
a rapid lithium extraction technology eliminating or greatly
reducing the physical footprint and investment in large,
multi-phase, lake sized, lined evaporation ponds, as well as
enhancing the quality of extraction and recovery across a complex
range of brines as compared with traditional solar evaporation.
This technology is applicable to petrolithium (oil and gas
wastewater), natural brine, and other brine sources such as
lithium-rich mine and industrial plant wastewater. The technology
was recently chosen as winner of the Base and Specialty Metals
Industry Leadership Award at the 2018 S&P Global Platts Global
Metals Awards, held in London in May (see press release
dated May 18, 2018).
Qualified
Person
Andris Kikauka (P.
Geo.), Vice President of Exploration for MGX Minerals, has
prepared, reviewed and approved the scientific and technical
information in this press release. Mr. Kikauka is a non-independent
Qualified Person within the meaning of National Instrument 43-101
Standards.
About MGX
Minerals
MGX Minerals is a
diversified Canadian resource company with interests in advanced
material and energy assets throughout North America. Learn more at
www.mgxminerals.com.
Contact
Information
Jared Lazerson
President and CEO
Telephone: 1.604.681.7735
Web: www.mgxminerals.com
Neither the
Canadian Securities Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the Canadian Securities
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Forward-Looking
Statements
This press
release 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. The Company cautions investors that any forward-looking
information provided by the Company 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 Company's public
filings for a more complete discussion of such risk factors and
their potential effects which may be accessed through the Company's
profile on SEDAR at www.sedar.com.
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