VANCOUVER, BRITISH COLUMBIA / February 22, 2017 / MGX Minerals Inc. (“MGX” or the “Company”) (CSE: XMG / FKT: 1MG / OTC: MGXMF) is pleased to announce the Company has entered into an arm’s length Earn-in Agreement (the “Agreement”) with Scientific Metals Corp. (“STM”) pursuant to which MGX can acquire an initial 50% interest in the Paradox Basin Lithium Brine Property (the “Property”) located in Utah.
The Property consists of 111 mineral claims encompassing 2,220 acres located approximately four kilometers’ northwest of Intrepid Potash’s Cane Creek operation. Approximately eight wells have been drilled on the Property with additional historic wells in the immediate area. Historic exploration, as reported by Southern Natural Gas and documented by the Utah Geological and Mineralogical Survey, reported 500 ppm lithium from well No. 1 Long Canyon ("Concentrated Subsurface Brines in the Moab Region, Utah", Utah Geological and Mineralogical Survey, June 1965).
Lithium occurs in the basin in oversaturated mineral brine (40 per cent minerals, 60 per cent water) and was discovered during oil exploration when drill wells intercepted the main brine zone (clastic break 31) of the Paradox formation. ("Concentrated Subsurface Brines in the Moab Region, Utah", Utah Geological and Mineralogical Survey, June 1965).
Under terms of the Agreement, MGX has the option to acquire a 50% interest in the Paradox Property by: (i) making a cash payment of CDN$50,000 to STM upon execution of the Agreement; (ii) issuing 150,000 MGX common shares to STM upon execution of the Agreement; and (iii) incurring minimum exploration expenditures on the Paradox Property of no less than CDN$250,000 over the course of a 12-month period. If MGX earns its 50% interest, the parties will negotiate and enter into a joint venture agreement pursuant to which the parties shall be equally responsible for all future exploration and development expenses on the Paradox Property. Further, MGX will have the right to participate in an amount of up to 15% of the gross proceeds of any equity or debt financings of STM for a period of 18 months from the date of execution of the Agreement.
MGX has not undertaken any independent investigation of the drill results, fluid analysis or other information contained in this press release nor has it independently analyzed the results of the previous exploration work in order to verify the accuracy of the information or whether the information was prepared in accordance with the requirements of National Instrument 43-101. The Company believes that the historical drill results, fluid analysis and other information contained in this press release are relevant to continuing exploration on the Paradox Property. MGX and STM intend to conduct a review of recent and historic well logs, along with chemical analysis in the area and reprocessing of seismic data focusing on mineral brine.
The technical portions of this press release were prepared and reviewed by Andris Kikauka (P. Geo.), Vice President of Exploration for MGX Minerals. Mr. Kikauka is a non-independent Qualified Person within the meaning of National Instrument (N.I.) 43-101 Standards.