MGX Minerals Completes N.I. 43-101 Report for Alberta Lithium Brine Project

VANCOUVER, British Columbia, June 22, 2016 (GLOBE NEWSWIRE) -- MGX Minerals Inc. (“MGX” or the “Company”) (CSE:XMG) (FKT:1MG) is pleased to report the Company has received a National Instrument (N.I.) 43-101 compliant technical report (the “Report”) regarding its Alberta Lithium Properties (the “Properties”). MGX commissioned APEX Geoscience Ltd. (“APEX”) to prepare a N.I. 43-101 Technical Report on its Lithium Oilfield Brine project in Alberta, Canada. MGX’s Alberta lithium-brine properties, which are the subject of the Technical Report, consist of 30 Metallic and Industrial Mineral permits for a total land package of 243,185.6 hectares (600,924.7 acres). The 30 contiguous and non-contiguous Permits can be divided into 15 sub-Properties that are located in four general areas of Alberta:

1. The Red Deer group of permits are situated in the Red Deer, AB area of south-central Alberta and comprise 10 permits, including a contiguous cluster of six permits (Buck Lake sub-Property) and four non-contiguous permits (Bonnie Glen, Rimbey Homeglen, Erskine and Wimborne sub-Properties);
   
   
2. The South Peace River Arch group of permits is situated near the communities of Hines Creek, AB and Fairview, AB and south of the Peace River Arch in northwestern Alberta, and comprises 10 permits, including a contiguous cluster of four permits (Sand Lake sub-Property) and six non-contiguous permits (Clear Lake; Utikuma River; Lesser Slave Lake; Upper and Lower Smoky River; and Pouce Coupe sub-Properties);
   
   
3. The Fox Creek group of permits is located near the Town of Fox Creek, AB and includes two separate groups of contiguous permits: Fox Creek East sub-Property (4 permits) and Fox Creek West sub-Property (2 permits); and
   
   
4. The Southeast group of permits is located north of the city of Medicine Hat, AB and east of the city of Brooks, AB in southeastern Alberta and comprises four contiguous permits (Dishpan Lake sub-Property).
   
   

MGX, by making certain payments and share issuances, holds 100% rights on the Permits, which gives MGX the exclusive right to explore for and develop potentially economic deposits of metallic and industrial minerals within the boundaries of the Permits subject to meeting bi-annual expenditure requirements. In addition to these Permits, MGX has recently applied for additional Alberta Metallic and Industrial Mineral Permits; these permit applications have yet to be formally granted by the Government of Alberta.

Infrastructure and Brine Production

In general, the Permits are situated in areas where the energy sector is active year round providing excellent transportation roots, supplies services, equipment and personnel that is associated with Alberta’s vast oil and gas sector; consequently there is an unlimited availability of resources including: workers and resource field personnel; power; equipment; engineering expertise; etc.

MGX Minerals Inc.’s Lithium Oilfield Brine Project in Alberta aquifers are within Devonian reef complexes of the Beaverhill Lake Group (Swan Hills Formation), Woodbend Group (Leduc Formation) and Elk Point Group (Winnipegosis Formation). The brine is currently being pumped to the surface from depths of between 1,660 m and 3,300 m below surface as a waste product of hydrocarbon production.

Currently, the extracted brine is separated from the petroleum products and then re-injected back into the subsurface. Hence, the brine represents the largest-volume waste stream associated with oil and gas production. The first major oil discovery in Western Canada was made in the Late Devonian (Frasnian) Leduc Formation of the Woodbend Group near the city of Devon, AB in 1947 (Leduc #1 well). Oil has been produced from the Devonian petroleum system in the Alberta portion of the Western Canada Sedimentary Basin ever since. The remaining established reserves of conventional crude oil in Alberta is about 288,200,000 cubic meters- more than one third of Canada’s remaining conventional reserves- and the Cretaceous and Devonian reservoirs are the major sources for all remaining conventional oil. The vast Devonian hydrocarbon reserves can largely be attributed to the abundance of mature, excellent to good quality carbonate source rocks. These same porous Devonian rock units host significant volumes of formation water, which can possibly and are currently being assessed for their lithium-enriched brine potential.

Highlights

A historical account of fluid geochemistry of Devonian formations waters from wells that were spudded on the MGX sub-Properties shows that:

• Mineralization on MGX’s Properties consists of Li-enriched Na-Ca brine hosted in aquifers within Devonian carbonate reef complexes predominantly of the Woodbend-Winterburn groups (MGX’s Red Deer, South Peace River Arch and Fox Creek groups of permits) and Elk Point Group (MGX’s Southeast group of permits).
  
  
• The Devonian formation/aquifer brine samples on the MGX Properties were collected from depths of between 1,665 m and 3,666 m below the surface.
  
  
• Devonian formation waters from selected wells on the MGX Properties reportedly contain up to 140 mg/L Li (21 separate well analyses average 100 mg/L Li). All 15 sub-Properties have at least one well with a recorded lithium content of >75 mg/L Li.
  
  
• Potassium was recorded in four separate Devonian wells yielding between 4,570 and 7,270 mg/L all of which were recorded in the area of the Red Deer group of permits.
  
  
• Formation water from a single well, 00/15-22-033-26W4-0, was analyzed for bromide (956 mg/L Br) and iodide (18 mg/L I).
  
  
• One Triassic sample contained significantly less lithium (26 mg/L Li) and potassium (430 mg/L K) showing that the Devonian brines contain higher concentrations of the elements of interest.
  
  

Devonian Oil & Gas Pools

As the Devonian petroleum system has generally been subject to hydrocarbon production for decades, many of the fields/pools are classified as mature or have extinguished their hydrocarbon resources. Consequently, an important consideration for Li-brine companies is to investigate Devonian fields/pools with viable petroleum reserves and active hydrocarbon production (i.e., operational lifespan) to ascertain/estimate the Li-brine potential of the associated aquifer going forward. With respect to MGX’s Properties, the Bonnie Glen, Erskine and Wimborne sub-Properties are all reported to have significant remaining established commingled natural gas reserves (15 x 106m3; 24 x 106m3; and 629 x 106m3, respectively; Alberta Energy Regulator, 2015). In addition, the Fox Creek area is undergoing hydrocarbon resurgence in that hydraulic fracturing technology has made tight oil and gas associated with the Woodbend Group (Duvernay Formation shale) accessible to current and future development.

A total of 4,969 oil, gas and water wells – regardless of stratigraphic target age – have been spudded on MGX’s Properties. Of the 4,969 wells, 228 wells penetrate the Devonian within the MGX Permits; the current well status of these wells includes: 41 active wells; 32 suspended wells; 148 abandoned wells; and seven wells of unknown status, which are typically related to shallow water wells. The majority of the Devonian wells, regardless of well status, occur in MGX’s Bonnie Glen; Rimbey Homeglen, Wimborne and Erskine sub-Properties (Red Deer group of permits in central Alberta) and Fox Creek group of permits in west-central Alberta. Importantly, production records show that these wells are capable of producing substantial volumes of formation water. For example, well 11/08-14-033-26W4, on the Wimborne sub-Property, produces about 900 bbls of formation water per day.

Recommendation

The Technical Report has shown that historical formation water geochemical analyses within MGX’s Properties contain up to 140 mg/L Li, which is equivalent to the highest lithium-enriched brine samples documented to date in Devonian aquifers of the Western Canada Sedimentary Basin. It is recommended, therefore, that MGX conduct a two-phased program to verify and assess Li-brine at its properties. The total estimated cost of both phases is CDN$600,000. Recommended Phase One work, which is estimated at CDN$180,000, involves a formation water geochemical sampling program with the objectives of verifying the historical brine chemistry that is presented in this Technical Report. Pending the results of the Phase One exploration work, the purpose and objective of the Phase Two exploration work is to: 1) prepare inferred mineral resource estimations at selected MGX sub-Properties; and 2) conduct laboratory-scaled test work to explore and optimize the elemental recovery process. The total cost of the Phase Two exploration work is estimated at CDN$420,000.

Technical Information

The Report summarizing the Properties was prepared in accordance with N.I. 43-101 standards by APEX and has been filed under the Company's profile on SEDAR. The Qualified Person (“QP”) for the Report is D. Roy Eccles, M.Sc., P. Geol. This press release has been reviewed and approved by Mr. Eccles and the Company's Vice-President Exploration Mr. Andris Kikauka, both Qualified Persons under National Instrument (N.I.) 43-101 Standards.

About MGX Minerals

MGX Minerals (CSE:XMG) is a diversified Canadian mining company engaged in the acquisition and development of industrial mineral deposits in western Canada that offer near-term production potential, minimal barriers to entry and low initial capital expenditures. The Company operates lithium, magnesium and silicon projects throughout British Columbia and Alberta. For further information, please visit the Company’s website at www.mgxminerals.com.

Figure 1. General location of MGX Minerals Ltd.’s northern Alberta lithium-brine properties

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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.

Contact Information
Jared Lazerson
President and CEO
Tel: 604.681.7735
Email: jared@mgxminerals.com