Magnesium: A Metal For The Future

A strategic metal with a North American solution.

Two-thirds of the world's magnesium originates from China. The United States has designated magnesium as a strategic metal. As demand continues to rise and the metal becomes more difficult to source, MGX’s Driftwood Creek magnesium deposit represents a North American solution to a growing global problem.

Located in southeastern British Columbia, Driftwood Creek is the largest undeveloped magnesium deposit in North America. It offers the potential to mine a strategic metal in a geopolitically stable, mining-friendly jurisdiction that meets the highest environmental and ethical standards.

$1.05 Billion

Estimated pre-tax life of mine cash flows from production at Driftwood

66%

Percentage of annual global magnesium production originating from China

Current Sources of Magnesium Are Insecure

Global Production of Magnesium

Sources: Global Magnesium Market Overview / USGS Minerals Commodities Summary, 2017

Demand for Magnesium Is Rising Steadily

Global Magnesium Oxide Demand and Market Value Estimates
Source: Future Market Insights, August 2016; Assumes Long-Term Price of US$4,000/tonne
  • Magnesium is 75% lighter than steel and 33% lighter than aluminum while still offering comparable strength-to-weight ratios
  • Automobile manufacturers increasingly shifting towards magnesium-alloy to reduce vehicle weights and meet fuel-efficiency standards
  • Producers of consumer technology products (cell phones, laptops, cameras, etc.) favor magnesium alloys due to light weights and increased durability
  • Recent advances in magnesium battery technology show strong potential for future additional non-structural applications
  • Research to develop magnesium-based cathode designs viable for battery storage being pursued by numerous organizations worldwide

Developing North America's Next Magnesium Oxide Mine

MGX is poised to become the next producer of magnesium oxide in North America. The 2018 N.I. 43-101 Preliminary Economic Assessment completed on Driftwood Creek highlighted the robust nature of the high-grade deposit:

  • Pre-tax NPV @ 5% of $529.8 million, IRR of 24.5% with a 3.5-year payback
  • Post-tax NPV @ 5% of $316.7million, IRR of 19.3% with a 4.0-year payback
  • Initial capital costs of $235.9 million (Total life-of mine ("LOM") - $239.8 includes sustaining/closure costs of $3.9 million and contingency costs of $40.0 million)
  • Conventional quarry pit mine with a 1200 tonne per day ("tpd") process plant using conventional crushing, grinding, flotation upgrading, calcination, and sintering to produce a saleable DBM product
  • Cash costs of $350/tonne MgO
  • All-in sustaining costs ("AISC") of $351/tonne MgO
  • Average annual MgO production of 169,700 tonnes over a 19-year mine life
  • LOM average head grades of 43.27% MgO
  • LOM MgO recoveries of 90%
  • LOM strip ratio of 2.4 to 1 of rock to mineralized material

Driftwood Creek is currently undergoing a comprehensive work program to prepare for completion of a N.I. 43-101 Pre-Feasibility Study. The current tonnage and grades of the Driftwood Creek mineral resource, using a 42.5% MgO cut off, are shown in the table below:

 CLASS TONNES
x1000
MgO
%
Al2O3
%
CaO
%
Fe2O3
%
SiO2
%
LIO
%
 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


  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 US$8.82/t, processing+ g&a costs of US$106/t, and a commodity price of US$600.00/t 95%MgO DBM.

  3. Mineral resources are reported within the constrained shell, using a cutoff grade of 42.5% MgO (based on a 20-year LOM) to determine “reasonable prospects for eventual economic extraction.”

  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 = Measured and Indicated.

* The reader is advised that the preliminary economic assessment summarized is only intended to provide an initial, high-level review of the project. The PEA mine plan and economic model include the use of inferred mineral resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the preliminary economic assessment will be realized.