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MGX Minerals Acquires Additional 10,000 Acres of Oil and Gas Rights at Paradox Basin, Utah Petrolithium Project

VANCOUVER, BRITISH COLUMBIA / May 8, 2018 / MGX Minerals Inc. (“MGX” or the “Company”) (CSE: XMG / OTCQB: MGXMF / FSE: 1MG) is pleased to announce it has acquired an additional 10,331.32 acres of Oil and Gas Leases (“Leases”) located within the Company’s unitized 80,380-acre Blueberry Unit (“Blueberry Unit”). The newly acquired leases are located within the proposed 3D seismic geophysical survey area, which is scheduled to commence in August and will include approximately 9,000 data points. To date the Company has conducted a paleontology survey and is nearing completion of the archeological survey.

Under terms of the Purchase and Sale Agreement (the “Agreement”), MGX has the option to earn a Net Revenue Interest (“NRI”) on 9,158.4 gross/net acres within the Company’s area of mutual interest. Details of the Agreement are as follows:

  • Purchase Price of US$145,000. An initial installment of $50,000 has been paid with the remaining installments due on September 5, 2018 ($50,000) and March 5, 2019 ($45,000).
  • Seller delivered 83.0% NRI on 8,481.53 acres, and 82.5% on remaining 677.31 acres.
  • On or before December 15, 2021, MGX will drill a well on the largest of the acquired leases to a TVD of 8,000' or to a depth sufficient to test the Cane Creek Shale (Cycle 21) of the Paradox Formation. MGX has the option to extend the drilling obligation for an additional three years in exchange for payment of an additional $100,000.
  • MGX also has an option to acquire an additional lease covering 1,172.48 acres if and when that lease is issued by the BLM.

The Blueberry Unit (oil, gas and lithium) and Lisbon Valley Claims (lithium) now consists of approximately 115,000 acres of oil and gas leases and 118,000 acres of largely overlying and contiguous mineral claims. Brine content within the Lisbon Valley oilfield have been historically reported as high as 730 ppm lithium (Superior Oil 88-21P).

The Project is being simultaneously explored for oil, gas, lithium and other brine minerals to determine locations for deployment of the Company’s lithium and mineral extraction technology.

Blueberry Unit
MGX is currently earning a 75% working interest in the Project, with the remaining interest primarily controlled by the Paradox Partner. The Paradox Partner has been engaged by MGX as subcontracted operator of the Project. The Project is host to National Instrument (N.I) 51-101 estimated prospective resources (the “Estimate”) consisting of leasehold and royalty interests in San Juan County, Utah and Miguel County. Colorado. The estimate was prepared by the Ryder Scott Company, L.P. (“Ryder Scott”), an independent qualified reserves evaluator within the meaning of N.I. 51-101 - Standards of Disclosure for Oil and Gas Activities (“NI 51-101”), with an effective date of June 30, 2017. The Estimate was prepared in accordance with N.I. 51-101 and the Canadian Oil and Gas Evaluation.

Estimated Gross Volumes
Unrisked Prospective (Recoverable) Hydrocarbon Resources
Leasehold Interest in San Juan County, Utah and San Miguel County, Colorado of
MGX MINERALS INC.
As of June 30,2017

Formation

ULTIMATE RECOVERY OIL – MMBO

ULTIMATE RECOVERY GAS – BCF

COC*

LOW

BEST

HIGH

LOW

BEST

HIGH

 

Paradox Clastics

CB2

41.799

59.498

85.324

33.441

47.602

68.266

0.075

CB3

41.915

60.641

85.833

33.536

48.517

68.671

0.075

CB4

12.766

18.745

26.692

10.213

14.781

21.355

0.075

CB5

33.185

48.065

68.841

26.548

38.453

55.074

0.075

CB6

6.603

9.607

13.874

5.283

7.686

11.100

0.045

CB7

1.892

2.735

3.948

1.514

2.188

3.158

0.032

CB8

19.108

27.525

39.079

15.287

22.022

31.264

0.068

CB9

11.452

16.671

23.711

9.162

13.337

18.970

0.068

CB10

14.565

21.169

30.088

11.652

16.936

24.073

0.068

CB11

2.021

2.929

4.244

1.617

2.344

3.396

0.032

CB12

9.352

13.609

19.525

7.482

10.887

15.620

0.045

CB13

9.333

13.158

19.297

7.468

10.815

15.438

0.045

CB14

3.195

4.621

6.634

2.556

3.697

5.308

0.045

CB15

6.455

9.432

13.633

5.164

7.546

10.908

0.045

CB16

2.752

3.987

5.768

2.202

3.190

4.615

0.045

CB17

3.770

5.390

7.835

3.016

4.313

6.269

0.040

CB18

4.673

6.728

9.572

3.739

5.383

7.658

0.045

CB19

16.690

24.226

34.542

13.358

19.381

27.636

0.068

CB20

2.931

4.253

6.118

2.435

3.402

4.895

0.040

CB21
(Cane Creek)

35.336

51.338

73.971

28.272

41.073

59.177

0.097

CB22

5.635

8.261

11.957

4.508

6.609

9.566

0.045

Leadville

1.000

2.100

4.000

153.000

231.700

341.600

0.066

*COC – Chance of Commerciality = Chance of Discovery * Chance of Development

Lisbon Valley and Paradox Basin Geology
The Project is proximate to Lisbon Valley oilfield which has approximately 140 wells. According to production statistics, as reported by the Utah Department of Natural Resources, Oil, Gas and Mining Division, cumulative lifetime production within the Lisbon Valley oilfield has totaled 51.4 million barrels of oil as of June 2017 (“Oil Production by Field, Utah Department of Natural Resources, Division of Oil, Gas and Mining”; June 2017; Click Here). The Paradox Basin has been noted by the USGS as having one of the largest undeveloped oil and gas fields in the United States (“Assessment of Oil and Gas Resources in the Paradox Basin Province…”; USGS; 2011; Click Here).

Grant of Options
The Company also announces it has granted 4,100,000 incentive stock options (the “Options”), vesting immediately, in accordance with the terms of the Company’s stock option plan. The Options can be exercised into common shares of the Company at a price of $0.89 per share for a period of three years from the date of grant. Directors and officers of the Company received 2,300,000 of the Options granted.