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VANCOUVER, BRITISH COLUMBIA / TheNewswire / June 18, 2015 - MGX Minerals Inc. ("MGX" or the "Company") (CSE: XMG / FKT: 1MG) is pleased to report the Company has entered into a Mining Lease Agreement (the "Agreement") to explore, develop and mine the Needles magnesite deposit ("Needles" or the "Deposit") located in San Bernardino County, California.
Needles has been explored intermittently since the 1930's. Exploration to date has focused mainly on an area of interest located within patented claims, where mineralized magnesite beds occur discontinuously across an approximate strike length of 800 meters and are believed to reach widths of up to 200 meters in areas. A 1985 evaluation by the California Geological Survey (DMG Open-File Report 85-18) noted the unusually pure magnesite mineralization and suggested that Needles may contain in excess of 500,000 short tons of magnesite based on the 43 samples collected previously by the United States Geological Survey (USGS).*
"We believe the acquisition of Needles further solidifies our portfolio of magnesite properties and expands our operations into the United States," stated MGX President and CEO Jared Lazerson. "Needles is strategically located to provide magnesium oxide wallboard to the southwestern United States, which represents one of the largest construction markets in North America."
The Company has begun preliminary planning at Needles to build and operate the only magnesium oxide (MgO) wallboard production plant in the United States. Initial production is targeting 10 million sheets of wallboard annually.
Magnesite ore will be calcinated to produce caustic calcined magnesia (CCM), which will act as a feedstock to produce MgO wallboard. MgO wallboard is generally known to be stronger and lighter than traditional wallboard as well as being fireproof and non-toxic. MgO wallboard is often used in areas prone to flooding as the boards can retain moisture, dry out, and still retain their shape and integrity.
Pursuant to the Agreement, MGX has the right to lease Needles for up to 100 years, with renewal options occurring every ten years, and by making annualized lease payments (USD) of $12,000, $24,000, and $36,000 in years 1-3 respectively and $36,000 per annum plus cost of living adjustment thereafter. Additionally, the Company must pay $5,000 within 30 days and issue $10,000 in MGX common shares. The Company must incur a minimum of $350,000 in exploration and development expenditures before June 15, 2018. The underlying landowner will retain a 10% net profit interest which may be purchased by MGX at any time by making a one-time payment of US$10 million.
*These are historical resource estimates that do not comply with the current CIM Definition Standards on Mineral Resources and Mineral Reserves as required by NI 43-101. A Qualified Person has not done sufficient work to upgrade or classify these historical resources estimates to current mineral resources prepared in accordance with NI 43-101. The issuer is not treating the historical estimate as current mineral resources and the historical estimate should not be relied on.
Qualified Person
Andris Kikauka, Vice President of Exploration for MGX Minerals, and a non-independent Qualified Person as defined by N.I. 43-101, has reviewed the information contained in this news release and has verified the data.
About MGX Minerals
MGX Minerals is a diversified Canadian mining company listed on the Canadian Securities Exchange (CSE: XMG). MGX is engaged in the acquisition and development of industrial mineral deposits in western Canada and the United States that offer near-term production potential, minimal barriers to entry and low initial capital expenditures. MGX's flagship project is the Driftwood Creek magnesium property in the East Kootenay region of British Columbia. Development plans include construction of a quarry mine and processing plant to produce magnesium oxide. The Driftwood Creek project is currently under permitting review for granting of a mining lease and applications for associated operating permits are in various stages of preparation. MGX owns the majority of significant magnesite properties in the Province of British Columbia as reported by the British Columbia Geological Service.
For more information please visit MGX's website at www.mgxminerals.com.
Contact Information
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", "postulate" and similar expressions, or are those, which, by their nature, refer to future events. MGX cautions investors that any forward-looking information provided by MGX 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 MGX's public filings for a more complete discussion of such risk factors and their potential effects which may be accessed through MGX's profile on SEDAR at www.sedar.com.
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