MGX: Riding the Energy Transition

C.XMG, MGX Minerals, lithium, chile

To get a handle on MGX Minerals (C.XMG) and its frenetic CEO Jared Lazerson you have to understand Lazerson’s underlying vision of energy technology in transition. For Lazerson the renewables revolution, the need for efficient energy storage solutions and the broad range of “battery” metals all coalesce into a set of opportunities.

So many opportunities that MGX put out fourteen news releases in January 2018 alone covering everything from drilling results on the company’s lithium properties to its nano filtration lithium extraction system and advances on its new zinc air mass energy storage system. (The 5 KW system is pictured above.)

“This is really a zinc battery,” said Lazerson. “It really solves the next bottleneck for renewable energy.” That bottleneck is easy to describe: the wind does not always blow and the sun does not always shine which means that renewables like wind turbines and solar cells have to store the energy they generate for those times where they will not be generating any. The obvious solution is batteries but, until now, mass battery storage has been very expensive, hard to maintain and difficult to scale.

MGX’s zinc/air battery is based on well-understood technology which was developed by a major Vancouver based zinc mining firm.

“The battery company, ZincNyx Energy Solutions, had developed this technology and secured patents for the technology under the wing of the larger company,” said Lazerson. “But the major decided that it did not want to be in the battery business. It was a bit of a distraction. In fact, the major was planning on shutting down the battery company.”

“The battery company’s employees were looking for a buyer,” said Lazerson. “MGX was able to acquire the company and all its intellectual property for a small cash payment and some shares. And we bought it as a going concern.”

The zinc battery technology itself is surprisingly easy to understand. Power – from the grid or a solar farm or a wind turbine is fed into the system where it is used to strip the oxygen from a zinc oxide fuel which is then stored in a fuel tank. When energy is required that fuel – now a zinc electrolyte –  is run through a fuel cell where the oxygen – drawn from the atmosphere is reunited with the fuel which creates energy which can then be used. It is a closed system so the fuel is recycled. There are no emissions and the system is remarkably efficient.

“It is a scalable system,” says Lazerson. “What it does is decouple storage from power generation. If you need to store more energy you can simply use a larger fuel tank. Plus, the zinc electrolyte lasts for months with very little loss.”

ZincNyx had developed a 5 Kilowatt system. On January 30, MGX put out a press release announcing that work had begun on a 4X scale up of the system to 20 KW/160KWh system. This would put the Zinc Air Mass Storage System into the utility scale battery class.

“The ZincNyx story is a Vancouver story,” said Lazerson. “The facility is down on South West Marine Drive. And it is a story where we not only obtained a significant new technology, we also bought the IP. We announced the acquisition of 20 US patents and the filing of international patents.”

The range of applications for the ZincNyx technology is huge. Whether it is a backup power supply for a private home or maritime applications where the technology could back up or replace diesel engines, the long life and low heat of the ZincNyx system are very attractive.

While ZincNyx is an exciting new venture for MGX, the company is also forging ahead with its nano-filtration lithium technology.

“We’ve run lithium brine and wastewater over two dozen sites through the system,” said Lazerson. “The pilot plant held up very well and we are seeing very high recoveries particularly of impurities resulting in a clean lithium chloride concentrate for offtake.  We are in final flow testing of a small commercial plant which will be ready in the next six weeks. That plant will have a 750 barrel a day capacity. Then we will move up to a plant which can process 7500 barrels a day.”

“We are in the lithium business,” said Lazerson. The MGX business strategy is evolving but the company is committed to retaining ownership of its plants. “If there is high quality brine we’ll pay for the equipment and pay royalty to the owners, it’s about as win-win a situation as you can get and MGX plays the role of the developer and we move quickly,” said Lazerson.

This approach means that MGX is looking for high recovery and good grade situations. “We have an office in Chile,” said Lazerson. “In Chile you see very good grades and very minimal impurities. We’re also looking at opportunities in California in the geothermal sector.”

Add to that MGX’s ownership and exploration of several pure lithium plays – both hard rock and brine – and a picture of a company deeply engaged in the battery metals market emerges.

With all of this activity, it is actually difficult to characterize MGX as a mining or exploration company. In fact, it is more a technology company with some mining and exploration assets. Which gives Lazerson more than a few regulatory headaches.

“We’re in a bit of a regulatory circle because we don’t have a 43-101 compliant resource which means we are not allowed to talk about our actual numbers,” said Lazerson. “But, unlike a conventional exploration or mining company, we have a lot of actual data on costs and recoveries. We could put out numbers all day long but we defer to 43-101 which essentially prohibits stating economics without a compliant resource.  We are working with independent 3rd parties as a workaround.  We will be in the field shortly at which time we will be able to state the actual numbers and this is probably the best solution.”

In fact, as the MGX technology projects come online, the company will begin reporting those “actuals” because they are material. If Lazerson’s view of the renewables revolution is right, MGX stands ready to profit, in hard dollars, from the shift to renewable energy. There may never be a 43-101 or Feasibility Study and it simply won’t matter: MGX will be making serious money from very real technology.

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