LONDON, July 6, 2017 /PRNewswire/ --
We now have a new way to extract a rare 'superfuel'- and it could be the most important energy development since shale oil
went commercial. Oh, and it only takes a day.
This 'superfuel' is the foundation of everything that defines our high-tech future - from crazed demand for rechargeable
batteries, energy storage systems and electric vehicles, to the millions of consumer electronics we boost demand for daily.
Miners included are FMC Corporation (NYSE:FMC), Hecla Mining Company (NYSE:HL), Goldcorp Inc. (NYSE:GG), Teck Resources Limited
(NYSE:TECK), Barrick Gold Corporation (NYSE:ABX).
The superfuel is lithium, and the craze is already on.
But we won't have enough-not because we can't find it; lithium is abundant. It's because demand is skyrocketing and we haven't
been able to extract it for a decent cost - until now.
Goldman Sachs Group projects that demand for lithium will triple by 2025 to 570,000 tons.
Credit Suisse forecasts that demand for lithium "will actually outstrip supply as we approach the later part of the decade, with demand potentially as high as 125
percent of total capacity."
As our tech-driven energy future unfolds in front of us and becomes a critical reality, there is nothing more important than
diversifying our lithium supply-but the difficulties of extraction make this challenging.
Now we have an answer: It's 'petrolithium'-a new process pioneered by a little-known company that has just made one of the
biggest leaps in lithium extraction.
That company is MGX Minerals [ MGXMF ] [ XMG ] [ 1MG ], and its 'petrolithium' technology represents a
game-changer for a commodity that is now threatened by a major supply squeeze.
The best lithium is found in the brine, but it's harder to extract. Until now, we've only had two conventional means of
lithium extraction: hard rock mining and solar evaporation. Neither are efficient, and both are costly.
Instead, we've been throwing our most critical commodity away because we couldn't get at it. Lithium from petroleum brine has
been treated as waste.
But when you've got a tech-driven energy revolution on your hands that requires massive amounts of lithium and no sign of
enough supply to feed it; well, waste not, want not.
MGX's technology changes all that. It separates the lithium carbonate from the brine water as it's being pulled up to the
surface.
Here are 5 reasons to keep a close eye on MGX Minerals [ MGXMF ] [ XMG ] [ 1MG ] as we reach lithium fever pitch:
#1 Amazingly Tight Supply Ahead
Already this year, the catalysts have been dramatic. The most notable of these being Tesla's battery gigafactory, which threw
its manufacturing doors open in January, and by next year will be producing so much it will DOUBLE the world's battery production
capacity.
And that's just Tesla.
German BMZ has launched the first phase of its
German battery factory, and LG
Chem is planning one in Poland, which is slated to open next year. Samsung
also hopes to start making batteries in Hungary beginning in 2018.
And that's just batteries.
And while the mass production of Tesla's Model 3 electric sedan is one of the more exciting and visible drivers of demand-with
370,000 vehicles already
ordered-there are other major drivers, such as massive energy storage systems that will push demand exponentially higher.
According to Macquarie Bank, the share of lithium demand from electric and hybrid vehicles alone is due to surge from
10 percent in 2015 to 33 percent by 2021.
With Tesla looking to 'absorb the entire world's lithium production', in the words of Elon
Musk, and seeking 'American lithium sources first', the ability to extract lucrative lithium from petroleum brine is a
major coup-and a major opportunity for first-in investors.
Just how big is it going to get?
Lithium expert Joe Lowry says, "Demand should double between
now and 2020, driven by the massive battery market, producers are in no position to keep up with this in the medium or long
term."
#2 A Very Timely Pioneer with a Patent
In this tech-driven energy era, pioneering a new technology to extract a critical commodity when it's facing a major supply
squeeze puts small-cap companies on the lucrative cutting edge.
This is what MGX Minerals [ MGXMF
] [ XMG ] [ 1MG ] has done-and the timing couldn't be better
for this breakthrough in chemistry and engineering.
In the same way that we purify water, we can now extract lithium with this new technology. Think 'reverse osmosis'-but
patented.
Petrolithium is ever-present in the wastewater from oil and natural gas production. This is a source of lithium we've never
even considered-and it's a massive source because of all the oil and gas produced, all the wells we frack and even Canada's huge oil sands industry.
So, we don't even have to discover new resources-they are there for the taking, with the right technology.
To make this happen, MGX is partnering with two Canadian companies David Bromely Engineering Ltd. and PurLucid Treatment
Solutions, Inc., whose past clientele included Shell and Suncor Energy, Inc.
This is how it works:
- 'Nano-flotation' removes oil, colloids and other metals from the lithium-bearing brines
- An advanced form of ultra-filtration is then used (like reverse osmosis) to remove the oil from the waste stream (this oil
is why we could never before recover the lithium from the wastewater)
- The resulting liquid is flash frozen and evaporated under reduced pressure
- High concentrations of lithium carbonate come out.
And this is the answer to our struggles with the current methods of extraction that simply aren't efficient or economical.
#3 The NEW Lithium
Without MGX's technology, there are only two ways to extract lithium: solar evaporation and hard-rock mining.
Here's where it goes wrong, and why lithium is selling for a whopping $10,000 a metric ton
(around $4.5 per pound):
- Hard-rock mining has a detrimental impact on our ground and surface water, soil, vegetation and wildlife
- Both processes are expensive
- Both process take up to 18 months to develop and another year to get production up to capacity
- Even after 18 months of development and another year of ramping up, they still leave some 50 percent of the lithium in
place.
Here's where MGX's 'petrolithium' technology changes the game:
- MGX can recover almost all the lithium from oil and gas wastewater
- The process takes a single day (not 18 months)
- It produces clean water as a by-product, so it's a win-win situation for the environment and industry
- The technology is simple to install in lithium hotspots that are already in operation
- Recently, the process was further advanced to limit evaporation and crystallization and primarily rely on nanofiltration
for 90 percent.
#4 Plug-In Profits
There aren't many people in the oil and gas industry who aren't interested in 'plug-in' profits these days.
Technology like this turns already profitable operations into more profitable ones, and oil services giants like Halliburton
and Baker Hughes are always eyeing new plug-in profits.
Oil has been stumbling since it crashed in mid-2014, so the upside for operators who could bank on the lithium they've been
throwing away could be enormous.
Think of funding fracking while simultaneously producing the most sought-after commodity of our tech-driven energy revolution
(yes, lithium). This is exactly where big oil profits from clean tech.
Even if MGX Minerals [ MGXMF ]
[ XMG ] [ 1MG ] ' s new lithium extraction
technology cornered only 10 percent of the market, it would still be huge. MGX could end up being the next Osmonics-the small
reverse-osmosis water company that GE bought in 2003 for $275 million.
And the momentum is building quickly. In January, MGX
successfully extracted lithium from heavy oil wastewater as part of its pilot plant in support of its 487,000-hectare Alberta lithium project.
Starting in Alberta, MGX envisions using its patented technology to target the region's
12,000-20,000 bpd of oil production-for lithium.
But that was just the first catalyst, the news flow here has been non-stop.
- In March, MGX acquired 110,000 acres of oil and gas leases in Paradox Basin, Utah. This gave it access to the brine-bearing aquifer systems where they are preparing to
permit the Petrolithium #1 borehole.
- In early April, they added additional claims to Paradox Basin.
- In late April, MGX received independent lab-testing results of its technology, demonstrating that it can 'rapidly separate lithium and other
valuable minerals from the wastewater brine.'
- In the first week of May, MGX finalized the acquisition of PurLucid Treatment Solutions, Inc., rendering it a full-service lithium
extraction and water treatment company for oil and gas developers.
- The first real pay day came on 4 May, when MGX signed a lithium extraction demonstration agreement with a major oil and gas operator-this cat isn't yet out of the bag, but when it
is released, we're prepared for a major bump.
#5 First Shale, Now Lithium - Next, Two Processes in One
This is where shale and lithium meet, and it's a very lucrative crossroads-especially for a small company that has pioneered
the first ever technology to extract lithium from oil and gas wastewater.
The shale revolution that was brought to its knees but has risen again again-even if not to its earlier heights-doesn't need
to be in direct opposition to the energy transformation driven by everything battery-powered and stored.
Technology like MGX's is what brings them together. Where there is oil and gas, and waste water, there is lithium. It's also
where the two meet up on solid ground with the environment. Desperately needed lithium is extracted from oil wastewater, and
what's returned is clean.
As lithium demand heads into dangerous territory for supply, and it's all about efficient extraction processes, a flurry of
upcoming news flow from this little-known pioneer is bound to attract attention in all the right places, but for first-in
investors, this is the ground floor of it all.
As MGX Minerals [ MGXMF ] [
XMG ] [ 1MG ] CEO Jared Lazerson
puts it: "The extraction of lithium from oil production water now ties the future of big oil to the new energy industry."
Honorable mentions :
- FMC (NYSE:FMC): One of the Lithium oligarchs. Plans to rapidly ramp hydroxide production from 10,000 metric
tonnes in 2016 to 18,000 metric tonnes in the current year. Next to Chilean SQM, FMC has most long-term supply contracts with
battery manufacturers and is well positioned for long-term growth.
- Hecla Mining (NYSE:HL): 2016 was a big year for Hecla (market cap US$2.04 billion ), with silver production up 48% and gold
up 24%, though 2017's production targets won't be as big. Hecla has managed to reduce its costs
significantly, but lower silver prices could cap its profitability.
- FMC Corp. (NYSE:FMC): Strong growth in lithium is expected to drive margins for FMC and major expansion, leading
analysts to give it an outperform rating. The company's full year 2016 results were impressive, with lithium segment earnings of
$21 million-up an amazing 90 percent from Q4 2015.
- Teck Resources (NYSE:TECK): Zinc hasn't been Teck's best friend of late, but that looks set to change in the
medium term, as supply continue to dwindle and as we hear news that the world's top producer of the metal-Glencore-isn't planning
to bring shuttered mines back online. Supply will remain tight. Keep in mind this, though: Teck's Q1 earnings and revenue fell
short of expectations because of weaknesses at its zinc unit, sending it shares down about 6% in late April. In particular,
there's been a 23% drop in production at its Red Dog mine due to lower grades of zinc.
- Barrick Gold Corp. (NYSE:ABX) and Goldcorp Inc. (NYSE:GG): All eyes are on the billion-dollar partnership
these two giants are forming in Chile's gold belt. Goldcorp is putting up $1 billion to get in on this deal as miners scramble for new sources of growth. This joint venture will see the
two giant miners operate three properties in Chile's Maricunga region, and these will be major
catalysts for both.
By Charles Kennedy
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