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MGX Minerals Inc
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MGX Minerals begins drilling at Driftwood Creek

2019-10-31 17:50 ET - News Release

Mr. Jared Lazerson reports


MGX Minerals Inc. has mobilized for drilling at the Driftwood Creek magnesium oxide project located in southeastern British Columbia. Drill and support equipment have arrived at the site, and drilling is expected to commence next week. The company has recently received a 50-site drilling permit from the Province of British Columbia.

The objective of the exploration program is to complete comprehensive infill and extension drilling at Driftwood as part of the larger, continuing work program to prepare a National Instrument 43-101 prefeasibility study. The PFS will build on the positive NI 43-101 preliminary economic assessment completed in March, 2018 (see press release dated March 6, 2018). That PEA study was independently prepared for MGX by AKF Mining Services Inc., Tuun Consulting Inc. and Samuel Engineering Inc. in accordance with CIM (Canadian Institute of Mining, Metallurgy and Petroleum) guidelines and National Instrument 43-101 (Standards of Disclosure for Mineral Projects).

Highlights included:

  • Life-of-mine pretax cash flow during production of $1,051-million;
  • Pretax net present value discounted at 5 per cent of $529.8-million, IRR (internal rate of return) of 24.5 per cent with a 3.5-year payback;
  • Posttax NPV discounted at 5 per cent of $316.7-million, IRR of 19.3 per cent with a 4.0-year payback;
  • Initial capital costs of $235.9-million (total life of mine (LOM: $239.8-million includes sustaining/closure costs of $3.9-million and contingency costs of $40.0-million);
  • Conventional quarry pit mine with a 1,200-tonne-per-day (tpd) process plant using conventional crushing, grinding, flotation upgrading, calcination and sintering to produce a saleable DBM product;
  • Average annual MgO (magnesium oxide) production of 169,700 tonnes during a 19-year mine life;
  • LOM average head grades of 43.27 per cent MgO;
  • LOM MgO recoveries of 90 per cent;
  • LOM strip ratio of 2.4 to 1 of rock to mineralized material.

The tonnage and grades of the Driftwood Creek project mineral resource at a 42.5-per-cent-magnesium-oxide cut-off are shown in the attached table.

                                                 MINERAL RESOURCE

Class        Tonnes (000s)        MgO (%)      Al2O3 (%)        CaO (%)      Fe2O3 (%)       SiO2 (%)        LOI (%)

Measured          4,702.7          43.31           1.01           0.95           1.29           5.06          47.83
Indicated         3,144.4          43.22           1.00           1.05           1.42           4.67          47.99
M&I               7,847.1          43.27           1.00           0.99           1.35           4.90          47.89
Inferred             55.8          42.95           0.93           0.66           1.43           6.07          47.46

Notes and assumptions:
1. Mineral resources are not mineral reserves and do not have demonstrated economic viability. 
There is no certainty that all or any part of the mineral resources estimated will be converted 
into mineral reserves.
2. The Lerchs-Grossman (LG) constrained shell economics used a mining cost of $8.82 (U.S.) per 
tonne, processing and general and administrative costs of $106 (U.S.) per tonne, and a 
commodity price of $600 (U.S.) per tonne, 95 per cent MgO DBM.
3. Mineral resources are reported within the constrained shell, using a cut-off grade of 42.5 
per cent MgO (based on a 20-year LOM) to determine reasonable prospects for eventual economic 
4. Mineral resources are reported as undiluted.
5. Mineral resources were developed in accordance with CIM (2010) guidelines.
6. Tonnages are reported to the nearest kilotonne (kt), and grades are rounded to the nearest 
two decimal places.
7. Rounding as required by reporting guidelines may result in apparent summation differences 
between tonnes, grade and contained metal.
M&I equals measured and indicated.

About MgO

Magnesium oxide (magnesia) is a widely used industrial mineral that comes in various forms, including dead burned magnesia (DBM) and fused magnesia (FM). End uses include fertilizer, animal feed and environmental water treatment, as well as industrial applications, primarily as a refractory material in the steel industry. The majority of refractory-grade MgO used in the United States and Canada is imported from China. MGX aims to provide a stable, secure, long-term supply of MgO to the North American market with quality MgO products of consistent grade and purity.

Qualified person

Andris Kikauka (PGeo), vice-president of exploration for MGX Minerals, has prepared, reviewed and approved the scientific and technical information in this press release. Mr. Kikauka is a non-independent qualified person within the meaning of National Instrument 43-101 standards.

About MGX Minerals Inc.

MGX Minerals is a diversified Canadian resource and technology company with interests in global advanced material, energy and water assets.

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