Mr. Jared Lazerson reports

MGX MINERALS COMPLETES HAUL ROAD LAYOUT AT DRIFTWOOD CREEK MAGNESIUM PROJECT

Spring 2016 on-site operations have commenced ahead of schedule at MGX Minerals Inc.'s Driftwood Creek magnesium project. Layout and design of the haul road have been completed, including flagging, centre line, right-of-way and grade control. The haul road development and improvement are being done by Dominion Excavating in support of the current 100-tonne bulk sample program.

Bulk sample testing and off-take

The purpose of the bulk sample program is to provide definitive-grade and run-of-mine representative samples for testing in the milling and calcination processes, including pilot-plant-scale calcination at 800 C, 1,000 C and 1,800 C for production of light-burned CCM (caustic calcined magnesia), hard-burned CCM and DBM (dead-burned magnesia), respectively. Multitonne samples will be available to end-users for the purpose of finalizing off-take agreements and used internally by MGX in the development of magnesium oxide wallboard.

Magnesium oxide wallboard production

A portion of material from the current bulk sample program will be used in trial production of magnesium oxide wallboard. MGX continues to evaluate the development of a value-added magnesium oxide wallboard plant utilizing feedstock from Driftwood Creek. Magnesium oxide board is known to be environmentally friendly and similar to a light cement board, as well as fire, water and mould resistant, with superior acoustic qualities and a very smooth finish as compared with conventional drywall. Magnesium oxide board is significantly stronger than conventional wallboard and is heavily used in Asia, including the interior of Taipei 101, one of the tallest buildings in the world. While magnesium oxide board is widely used outside of North America, there are currently no Canadian-based or U.S.-based manufacturers, and all board is imported, significantly increasing the price to contractors and developers. A vertically integrated North American-based manufacturer could potentially cut the cost of magnesium oxide board to domestic markets, providing a superior product at a similar price. The wallboard market is diverse and the opportunity in specialized board may be the greatest as specialized fire-resistant Type X board (1.39 billion square feet) and water-resistant board (390 million square feet) make up 40 per cent of the 4.39-billion-square-foot annual U.S. wallboard sales (U.S. Department of Interior, 2014).

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