As resource explorers across Canada grab their ankles and hope for the best in a continually dropping market, a small handful are swinging a heavy hammer and taking no prisoners.
MGX Minerals (
CSE:XMG,
Forum) has found success in magnesium exploration, combined with Scrooge McDuck-style spending habits and aggressive low-cost moves to production.
In the last several weeks the company has permitted and
expanded its Driftwood Creek magnesium project, secured a
comprehensive agreement with Eaton Corp and Highbury Energy to develop that property,
acquired another deposit in Needles, California, and
another one in British Columbia,
increased a financing (itself a major achievement in this market),
mobilized for exploration at its White Moon magnesium deposit, and today
acquired a 100% interest in the Longworth Silica Property.
President and CEO Jared Lazerson told me last week, “The reasons we’re doing well are simple.”
“First, we’re not playing golf. We’re very much an exploration company and now a development company,” said the CEO, wearing a dog-hair covered baseball cap and actual dirt from an actual mineral deposit to confirm his claim. “We don’t hire someone else to do the work, we do the work ourselves.”
“Investors understand that we’re putting their money to work, in a sector that is under-developed and under-appreciated but has great potential,” he added.
“Added to that, the government of BC wants projects like this going forward. Industrial minerals with strong end user demand and good environmentals and existing supply at a low grade out of China – that’s a situation where the government is very happy to permit, especially if you’re doing things the right way.”
MGX stock has climbed from $0.12 in early February to $0.44 today, with growing volume and very few backsteps along the way. News has been consistent and results have been strong.
Today’s news, in which the company took on 100% ownership of 15 contiguous claims over 1,084 hectares, 85 kms east of Prince George BC, opens the ferro silicon market to the company with claims previously explored by Silver Standard Resources.
Ferro silicon is used to remove oxygen from steel, while also increasing its resistance and elasticity. Notably, it can be combined with magnesium to create magnesium ferro silicon, a pre-alloy. Projections indicate a likely 8% growth in that market per year going forward, while Lazerson believes increased availability of the product to end users will substantially increase that growth rate.
MGX will issue 700,000 shares at a deemed price of $0.30 to Zimtu Capital for the property.
Lazerson sat for a podcast interview with Stockhouse last week that revealed extensive details of the MGX business plan, how the company is financing in a down market, and where they feel they’ve got a leg up on competitors.
--Chris Parry
https://www.twitter.com/chrisparry