DEVELOPING STRATEGIC METALS FOR THE FUTURE · MAGNESIUM MATTERS Reducing Agent 30% Aluminum...
Transcript of DEVELOPING STRATEGIC METALS FOR THE FUTURE · MAGNESIUM MATTERS Reducing Agent 30% Aluminum...
CORPORATE PRESENTATION – MAY 2016
DEVELOPING STRATEGIC METALS FOR THE FUTURE
Cautionary Statement on Forward-Looking Statements
This presentation is for viewing purposes only and does not constitute an offer or invitation to make an
investment. No part of it is to be seen as a contract of any kind. This presentation includes “forward-
looking statements” regarding business and project plans. Where the presentation expresses or implies
an expectation or belief as to future events or results, such expectation or belief is believed to have a
reasonable basis. However, forward-looking statements are subject to risks, uncertainties and other
factors, which could cause actual results to differ materially from future results expressed, projected or
implied by such forward-looking statements.
Qualified Person
Mr. Andris Kikauka, P. Geo., Vice President of Exploration for MGX Minerals and a Qualified Person
within the meaning of National Instrument (N.I.) 43-101 guidelines, has reviewed and approved the
technical content of this presentation.
DISCLAIMER
MANDATEAcquire, Develop and Operate Multiple Industrial &
Strategic Mineral Mines Across North America
OBJECTIVEBring 7-10 Industrial Mineral Mines Online Over Next
Decade; Build Significant Shareholder Value
PROFILENear-Term Production, Minimal Barriers to Entry,
Low Initial Capital Expenditures
Photo: Phase I Drilling @ Driftwood Creek – September 2014
MGX MINERALS INC.
Photo: Brisco-Driftwood mining district; On Site @ Driftwood Creek
INVESTMENT SUMMARY
INDUSTRIAL MINERALS FOCUSFocused on mining critical industrial minerals
to supply domestic market demand
TIER-ONE JURISDICTIONSOperating in secure and mining-friendly
regions of North America
NEAR-TERM POTENTIALDeveloping projects that offer near-term cash flow
and require low initial capital expenditures
DIVERSIFIED MINERAL ASSETSProject portfolio that will support objective of
multiple mines across multiple minerals
TIGHT SHARE STRUCTURE38 million shares outstanding; 49 million fully diluted
• Magnesium (Mg) is a non-metallic abundant alkaline earth metal that
represents an important material for today’s modern lifestyle-
smartphones, automobiles, aircrafts, and other everyday essentials
all require magnesium
• Magnesium’s unique characteristics make it 75% lighter than steel and
33% lighter than aluminum while still offering comparable strength-to-
weight ratios
• Magnesium Oxide (MgO) can be fused into three end-market products:
• Caustic Calcined Magnesia (CCM); 75-98% MgO purity
• Dead Burn Magnesia (DBM); 88-96% MgO purity
• Electro Fused Magnesia (EFM); 96+% MgO purity
WHAT IS MAGNESIUM?
MAGNESIUM MATTERS
Reducing Agent 30%
Aluminum Alloying 35%
Castings and Wrought products 15%
Desulfurization 10%
Other 10%
Primary Uses of Magnesium Metals
Source: U.S. Geological Survey Mineral Commodity Summaries 2015
• Magnesium is the third most used structural metal
behind iron and aluminum; 7 million tons consumed
worldwide in 2014; consumption growing 6% annually
• Magnesium considered a critical strategic metal by the
United States and European Union
• China responsible for approximately 80% of annual
worldwide production
• Only two operating magnesium mines in North America
Based on the results of the 2015 Requirements Report research, the NDS Program recommends new authorities for
twelve materials exhibiting a net shortfall: aluminum oxide, antimony, beryllium, carbon fiber, chlorosulfonated polyethylene,
europium, germanium, lanthanum, manganese metal,and Silicon carbide fiber.Magnesium
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MAGNESIUM: A CRITICAL METAL
UNITED STATES DEPARTMENT OF DEFENSE
STRATEGIC AND CRITICAL MATERIALS 2015 REPORT:
Source: Department of Defense 2015 Report on Stockpile Requirements
DRIFTWOOD CREEK MAGNESIUM DEPOSIT
CANADA’S NEXT MAGNESIUM OXIDE MINE
Photo: Magnesite-bearing gossan @ Driftwood Creek
• Located in Established Mining District: Driftwood Creek resides in the
Driftwood mining district of southeastern British Columbia; 164
kilometers north of Cranbrook, B.C.
• Near-Term Production Profile: Bulk sample underway;
Mining lease application pending approval
• Mining and Milling: Amenable to open-pit mining and established
beneficiation methods
• Excellent Infrastructure: Access to rails, road, labor and electricity in
established mining district
• Favorable Geology: Magnesite mineralization traced over 2,000 meters;
remains open in both directions and at depth
DRIFTWOOD CREEK OVERVIEW
Driftwood Creek
DRIFTWOOD REGIONAL GEOLOGY
TWO ZONES DELINEATED TO DATE
2014-2015 CORE DRILLING
2014 Drilling
2015 Drilling
* Note: Intervals represent drilled thickness, not true widths
PHASE I EASTERN ZONE DRILLINGDDH From (m) To (m) Interval (m) MgO% CaO% SiO2%
14-1 1.00 27.00 26.00 42.55 0.75 5.86
14-2 2.00 51.00 49.00 43.04 1.06 5.18
14-2A 0.35 36.00 35.65 41.83 1.50 6.83
14-3 2.80 9.00 6.20 41.04 1.16 8.33
14-3 21.00 63.00 42.00 41.52 1.33 6.49
14-4 0.80 9.00 8.20 43.20 1.24 4.12
14-4 21.00 66.00 45.00 41.92 2.08 4.71
14-5 24.00 71.63 47.63 41.43 1.64 6.87
14-6 3.00 18.00 15.00 42.62 1.92 5.54
14-6 30.00 36.58 6.58 41.92 0.69 9.01
14-7 0.20 54.00 53.80 43.10 1.17 4.93
* Denotes drill hole ended in magnesite
PHASE II WESTERN ZONE DRILLINGDDH From (m) To (m) Interval (m) MgO% CaO% SiO2%
2015-1 6.0 63.0 57.0 43.07 1.30 4.47
2015-1 81.0 121.92 40.92 43.87 0.50 6.76
2015-2 2.74 45.0 42.26 42.60 0.67 7.56
2015-2 54.0 91.44 37.44 41.55 0.31 11.46
2015-3 0.61 65.53 64.92 40.71 0.92 13.13
2015-4 30.0 128.02 98.02 44.28 0.97 3.40
2015-5 63.0 90.0 27.0 44.21 0.47 3.94
2015-5 108.0 123.0 15.0 42.7 0.68 7.71
2015-6* 1.0 75.0 74.0 42.27 0.83 9.74
2015-6 87.0 114.3 27.3 42.48 0.5 9.42
2015-7 0.8 18.0 17.2 40.5 0.52 11.95
2015-7A 3.0 9.0 6.0 38.4 0.62 16.1
2015-8 36.0 90.0 54.0 43.63 0.41 5.98
2015-9 12.0 78.0 66.0 43.43 0.76 5.10
2015-10* 9.0 43.28 34.28 41.25 0.64 9.77
2015-11 3.0 12.0 9.0 40.73 0.79 11.86
2015-11A 1.5 15.0 13.5 39.15 0.72 14.96
2015-12* 24.0 112.78 88.78 43.81 0.68 4.63
DEPOSIT BLOCK MODELS
Figure 1 (Above): Driftwood Creek lithology profile, Western and Eastern zones, looking northwest
Figure 2 (Above Right): Driftwood Creek mining block grade distribution, Eastern zone
Figure 3 (Right): Driftwood Creek deposit lithology profile, Eastern and Western zones, looking north
Mining Beneficiation Secondary Processing Magnesium Oxide
MINE TO MARKET
Stated Cranbrook Mayor Lee Pratt:This is exciting news for the city and surrounding
region. MGX Minerals will be a great fit in Cranbrook helping diversify our industrial sector, one of our key economic priorities, and creating new employment
opportunities. There are strong synergies between MGX and the community, and I look forward to working with
MGX as they advance their development.
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• Definitive agreement signed to acquire
Cranbrook mill site from Tembec Inc.
• Centrally located in Cranbrook, British Columbia
industrial park; complex spans 38 hectares (98 acres)
• Fully serviced industrial site with access to natural
gas, water, power and railroad
• Provides centralized location to process
mineralized material from numerous operations
throughout region
CRANBROOK MILL SITE ACQUISITION
AREA IN PROGRESS COMPLETED
Mine Preparation
100-Tonne Bulk Sample
N.I. 43-101 Resource Estimate
Mine Plan Optimization
Drill Programs (2)
Haul Road Layout
EnvironmentalAIA Study
Environmental BaselineAOA Study
PermittingOperating Permit Application
Construction Permit Application
Mining Lease Application
Final Land Survey
FinancingConstruction/Equipment
Processing PlantExploration
DRIFTWOOD CREEK PATH TO VALUE
MILESTONE TIMEFRAME
Mine Plan & Operating
Permit ApplicationSpring 2016
Construction & Assembly Summer 2016
Commence Mining Fall 2016
DRIFTWOOD CREEK TIMELINE
March 15, 2016
MGX Acquires LIDAR Mapping Data - Prepares Maiden N.I. 43-101 Resource Estimate at
Driftwood Creek
February 25, 2016
MGX Completes Haul Road Layout at Driftwood Creek
January 11, 2016
MGX Receives Approval of Mining Lease for Driftwood Creek
December 11, 2015
MGX Reports Mobilization for Bulk Sample at Driftwood Creek Now Underway
October 29, 2015
MGX Reports Phase II Drill Results- 88 Meters of 43.41% Magnesium Oxide in Hole 2015-12
RECENT DRIFTWOOD PRESS RELEASES
UPCOMING DRIFTWOOD MILESTONES
• Completion of Maiden National Instrument (N.I.) 43-101 Mineral Resource Estimate
for Driftwood Creek
• Completion of 100-tonne Bulk Sample from Driftwood and Shipment to Industrial Furnace
Company in Rochester, New York for Pilot Plant Testing
• Mining Lease application decision (currently under review by British Columbia Chief
Gold Commissioner)
• Completion of Cranbrook mill site purchase from Tembec for CA$3.7 million
• Lithium (Li) is the lightest and least dense element found on earth;
positions it as best solution for high-density portable energy storage
• Lithium-ion batteries represent the most viable solution for lightweight
and durable power sources in the emerging rechargeable battery market
• Lithium does not occur as a pure element in nature and instead
concentrates over time within endogenous (i.e. granitic pegmatites) and
exogenous (brine solutions) environments
• Spot prices for Lithium Carbonate have increased 7x over last 15 years
LITHIUM: A METAL FOR THE FUTURE
GOLDMAN SACHS
EMERGING THEME RADAR:
Source: Goldman Sachs Equity Research, Emerging Theme Radar, December 2, 2015
What if I told you that lithium is the new gasoline. Oil derivatives have
been the primary source of transportation energy since the commercialization of the
internal combustion engine ...electric vehicles (EVs) appear poised for a sustained period of superior
growth...
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“GOLDMAN SACHS
EMERGING THEME RADAR:
AN INCREASINGLY PRECIOUS METAL
0
5
10
15
20
25
30
35
40
45
2011 2012 2013 2015 2020
Lithium Demand Forecast ($ Billions)
Source: U.S. Geological Survey Mineral Commodity Summaries 2016
Batteries, 35%
Glass/Ceramic, 32%
Lubricants, 9%
Chemicals, 9%
Other, 15%
Primary Lithium Applications
• Strategic land position spanning 300,000 hectares throughout
mining-friendly Province of Alberta
• Properties located within and around past producing oil fields that
are fully serviced with roads, power and wellheads in place
• Permits cover some of the highest reported levels of lithium-bearing
brine throughout Province reaching up to 140 mg/L lithium(1)
• 16 past producing wells identified to date within Swan Hills formation
near Fox Creek covering an area of approximately 8.0 x 3.2 kilometers
• Six permits located within Fox Creek area with reported historic lithium
values ranging between 115-140 mg/L lithium
ALBERTA LITHIUM PROPERTIES
(1) All assays referenced are from the geoScout Oil & Gas Industry database as reported by well operators and monitored by the Government of Alberta
• Reduction in production time of lithium brine
by >99% over current production time for brine
• Multiple end market products including lithium
carbonate, sodium chloride and calcium chloride with
potential for production of boron and bromine;
• Strategic sourcing of reagents to reduce input costs
• Application of energy efficient technology to reduce
operating expenditures (OPEX)
• Utilization of existing oil and gas infrastructure as
well as equipment to reduce capital expenditures
(CAPEX) and decrease construction time
SCOPING STUDY RESULTS
The Company is actively working on bringing its Alberta Lithium Properties into production within the next 12 months.However, readers are cautioned that the Company has not completed a pre-feasibility or feasibility study whichestablishes mineral reserves with demonstrated economic and technical viability. Further, the Company cautionsreaders that any potential production may not be economically feasible and historically projects taken to productionwithout establishing reserves through a feasibility study have a much higher risk of economic or technical failure.
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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Lithium Carbonate Prices (Mt)
RECENT ALBERTA LITHIUM PRESS RELEASES
April 18, 2016
MGX Minerals Announces $500,000 Strategic Private Placement for Alberta Lithium
Development Financing
April 14, 2016
MGX Minerals Receives Initial Process Design and Scoping Study for Production of Lithium
Carbonate
April 14, 2016
MGX Minerals Further Expands Lithium Land Position to 300,000 Hectares in Alberta
February 29, 2016
MGX Engages Cementation AG for Pilot Plant Engineering at Alberta Lithium Fields
STOCK INFORMATION
CAPITALIZATION
Shares Outstanding 38,923,017
Options / Warrants 10,517,662
Fully Diluted 49,440,679
CSE: XMG
FWB: 1MG
STOCK EXCHANGES
1-YEAR PERFORMANCE
TRADITIONAL MINING RISKS MGX BUSINESS MODEL
Significant Capital
Requirements
Major capital
requirements to
construct mine
Minimal Capital
Investment
Less capital required;
quicker payback periods
Margin Contraction
Capital intensive and
vulnerable to cost
overruns
Fixed Operating InputsLong-term supply and
energy contracts
Mine PerformanceSubject to variance in
grade, dilution, etc.Open Pit, Quarry Mining
Shovel and scoop mining
with no tailings
Permitting RisksSignificant risks and
timeline to obtain
permits
Streamlined PermittingSmall mine permit
applications
THE MGX ADVANTAGE
LEADERSHIP TEAM
BOARD OF DIRECTORS
Lyndon Patrick (LLB), Director
H. David Read (MBA), Director
Jared Lazerson, Director
Michael Reimann (Ph. D), Director
Andris Kikauka (P. Geo), Director
MANAGEMENT TEAM
Jared Lazerson, CEO
Michael Reimann (Ph.D), CFO
Andris Kikauka (P. Geo), VP Exploration
TECHNICAL CONSULTANTS
Glen Rodgers (P. Eng, P. Geo), Engineering Consultant
Peter Klewchuk (P. Geo), Geological Consultant
Norman Tribe (P. Eng.), NI 43-101 Independent Technical Consultant
For Further Information Please Contact:
Jared Lazerson
President and CEO
Phone: 1.604.681.7735
Email: [email protected]
Web: www.mgxminerals.com
CONTACT INFORMATION