Near Tesla`s Gigafactory: Historically up to 730 ppm lithium in supersaturated brine to be further concentrated and extracted with its technologies (under development)

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Today, MGX Minerals Inc. announced to have entered into a Joint Operating Agreement to act as operator and acquire a 75% working interest in certain underlying oil and gas leases located contiguous to the company´s Lisbon Valley Petrolithium Project, about 65 km southeast of Moab in the salt anticline belt on the southwest edge of the Paradox Basin in San Juan county, Utah, USA. The region is home to the former Rio Algom uranium mill facility, an active copper mine operated by Lisbon Valley Mining Company, and a natural gas processing plant.

Today´s agreement for the oil and gas leases will provide access to the brine-bearing acquifer systems of the Paradox Basin. Upon closing of the agreement, MGX plans to conduct well-sampling and collect data to advance understanding of the Paradox Formation.

Historic lithium brine content has been reported as high as 730 ppm lithium at Lisbon Valley. Most recently on March 6, MGX reported that its technology partner, PurLucid, has achieved an upgrading of Alberta (Sturgeon Lake) brine from 67 to 1,600 ppm lithium in the filtration and pre-treatment phase of the lithium extraction process. That´s a 20-fold increase in lithium concentration (while removing most contaminants in a low energy process). It will be interesting to see if and how much the Utah brine can be concentrated further as the historical lithium grade of 730 ppm could rival South America, the largest lithium brine producing area in the world.

Preparations to permit the PetroLithium #1 borehole well will commence upon closing of today`s announced agreement.

Agreement Terms

To earn a 75% working interest, MGX will make payments totaling US$2,000,000 on or before September 1, 2018. The Company can choose to accelerate payments and issue consideration totaling $1,700,000 on or before September 1, 2017, in which case the vendor will waive any additional payments due. MGX has granted the vendor a Carry Period (“Carry Period”) in which MGX shall be responsible for 100% of all expenses incurred. The Carry Period shall be considered satisfied once MGX has made all required payments or drilled at least one well on the Leases on or before February 28, 2020. Upon satisfying these conditions MGX shall earn an undivided 75% working interest in the Leases and the vendor shall be responsible to contribute proportionate expenses equal to their interest in the Leases.

Geologic Setting

The Lisbon Valley oil and gas field is located approximately 40 miles southeast of Moab in the salt anticline belt on the southwest edge of the Paradox Basin in San Juan county. The oilfield was first discovered by Pure Oil Company in 1960. The Lisbon field produces oil and gas from the southwest flank of a faulted anticlinal trap in the Devonian sandstones and Mississippian limestones (Segal et al., 1986). The Paradox Basin covers large parts of San Juan, Garfield, Wayne, Emery, and Grand Counties in southeastern Utah. The Basin was a structural and depositional trough associated with the Pennsylvanian-age Ancestral Rocky Mountains. The subsiding basin developed a shallow-water carbonate shelf that locally contained carbonate buildups along its south and southwest margins.

MGX plans to conduct well-sampling and collect seismic data to advance hydrogeological understanding within the Pennsylvanian-age Paradox Formation, which consists of a thick (>3,667 m) evaporite sequence. The most active period of subsidence extended from mid-Pennsylvanian to Late Triassic time. Thick cyclic accumulations of salt were deposited early and influenced by irregular and episodic movements of the faults, resulting in salt redistribution and flexure of the overlying rock. As a result, there are a large number of identified clastic zones.

(Picture from "Well Database of Salt Cycles of the Paradox Basin, Utah" by Terry W. Massoth and Bryce T. Tripp)

Excerpts from "Concentrated Subsurface Brines in the Moab Region, Utah" (1965) by E. Jay Mayhew and Edgar B. Heylman, Utah Geological & Mineralogical Survey

The most concentrated brines to date have been found in Pennsylvanian rocks, especially inthe thin clastic breaks which separate the salt beds in the Paradox Formation. The clastic breaks consist of black, fetid shale, siltstone, dolomite, anhydrite, and some fine-grained sandstone. The beds are frequently brecciated. Whereas a number have been responsible for brine flows, clastic break 31, between Hite´s salt bed 15 and salt bed 16, has been consistently responsible for flows of supersaturated brine in the Big Flat-Long Canyon area (Glen Ruby, personal communication). Clastic zone 17, between Hite´s salt beds 8 and 9, is responsible for a brine flow in the Pure Oil No. 1 Hobson-U .S .A., section 30, T. 26 S., R. 20 E., Grand County. In a few of the Big Flat wells, the drilling fluid was not weighted enough, and blowouts occurred upon striking high pressure zones. Such blowouts were prevented in other wells by drilling with properly weighted mud. Other brine zones are present in the Paradox Formation and could be produced simultaneously with the main and more consistent zones. In some cases, oil occurs along with the brine in the clastic breaks, and two wells are currently producing sweet oil from the Cane Creek Marker, a well developed clasti c break between Hite´s salt beds 21 and 22, near the base of the formation.

One of the primary problems in developing a commercial brine operation is establishing a large and sustained brine flow from a reservoir of sufficient size. For this reason, the porous Mississippian dolomites and limestones appear to offer promise, especially where they have been faulted into contact with rich Paradox salt beds. Such faulting has probably occurred at Lisbon Valley, Moab Valley, Salt Wash, and elsewhere along the edge of the region of salt flowage. No gauges of brine flow are available from wells penetrating Mississippian beds. Drill-stem tests were conducted at several wells in the region which recovered several thousand feet of brine in the drill pipe, indicating that quantities of brine are present but that pumping might be required in order to produce them. Most wells have been drilled on surface or subsurface anticlinal highs in search of oil and gas, and it remains to be seen what kind of brine flow could be obtained from wells drilled in synclinal areas where the hydrodynamic drive might be greater. The richest brines have specific gravities between 1.13 and 1.4, and might be expected to migrate into synclinal areas.

The main brine zone (clastic break 31) has rarely´been cored, but it has been adequately sampled and logged. 

Brine flows have been encountered in clastic zone 31 over a distance of six miles north-south and eight miles east-west, and it remains to be proved if brine is present and the zone is communicable over a much larger area.

One reason for the presence of supersaturated brine in the clastic breaks is that the clastic beds frequently overlie rich potash and magnesium zones. In the classica l concept of the evaporite cycle , the most soluble compounds li are the last to precipitate. Therefore, the clastic units often overlie the end products of the preceding evaporite cycle . Potassium and magnesium chlorides and certain complex evaporite minerals can be found among the end products of evaporation. 

The fractured clastic zones form an excellent reservoir for brines derived from underlying evaporite units. The fracturing is caused by salt flowage, and it is possible that, when brine is removed from these zones, salt will flow into voids from which brine has been removed. This would help maintain high reservoir pressure and assist in a high ultimate recovery of brine. Cores have exhibited fractures filled with salt when brine has not been present.

The brine is interesting but not commercial unless a method of continuously reliable production can be worked out. 

Supersaturated brines, containing substantial quantities of many elements, are present in the subsurface of southeastern Utah, particularly in the Moab region. The town of Moab is in the central part of the Paradox Basin where the salts are well developed and the brines are supersaturated. Clastic breaks between various salt beds provide potential reservoirs for brine accumulation. Clastic break 31, a 5 to 30 foot zone separating Hite´s salt beds 15 and 16, is brine productive throughout the Big Flat-Long Canyon area, with some flows gauged in excess of 150 barrels (6,300 gallons) per hour. In addition to the clastic breaks in the Paradox Formation, porous dolomites and limestones of Mississippian age are within reach of the drill under much of southeastern Utah. With proper development of production techniques, concentrated brines could be commercially extracted in southeastern Utah.




Company Details

MGX Minerals Inc.
#303 - 1080 Howe Street
Vancouver, BC, Canada V6C 2T1
Phone: +1 604 681 7735

Shares Issued & Outstanding: 61,574,237

Canadian Symbol (CSE): XMG
Current Price: $1.41 CAD (03/22/2017)
Market Capitalization: $87 Million CAD

German Symbol / WKN (Tradegate): 1MG / A12E3P
Current Price: €0.98 EUR (03/22/2017)
Market Capitalization: €60 Million EUR



Previous Coverage

Report #18 “MGX Reports Upgrading of Lithium Brine from 67 to 1600 ppm Lithium“ 

Report #17 “MGX technology nominated for prestigious Katerva Award, the Nobel Prize of Sustainability“ 

Report #16 “Unconventional oil play legend Marc Bruner to take MGX and PetroLithium to the next level“ 

Report #15 “Total Conviction: MGX forms PetroLithium Corp. to expand into the US oilfield brine markets“ 

Report #14: “MGX Extracts Lithium from Oil Wastewater - Begins Monumental Integration with Big Oil“

Report #13 "MGX Partners with Oil Major on Lithium Brine, New Energy Industry Facing Fundamental Shift“

Report #12 "Game Changing Potential: MGX Minerals‘ Pilot Plant for Rapid Production of Lithium Nears Completion“

Report #11 "MGX assays 34 g/t gold from surface sampling in British Columbia“

Report #10 “Official: MGX owns magnesium worth multi-billions of dollars and starts pilot plant shortly“

Report #9 “One of the world‘s largest lithium resources on the horizon?“

Report #8 “Ready for significant lithium brine work in Alberta“

Report #7 “At the forefront of Alberta‘s lithium brine riches“

Report #6 “Pioneering Lithium in Alberta: MGX Minerals Teams Up“

Report #5 “Time to Put a Lithium Production Process in Place“

Report #4 “MGX Minerals Taps Into Canada‘s Potentially Largest High-Grade Lithium Resources“

Report #3 “MGX Minerals Receives Mining Lease for 20 years (in British Columbia!)“

Report #2 “MGX Minerals Accelerates Towards Production“

Report #1 “MGX Minerals Plans To Enter The Magnesium Market“

Disclaimer: Please read the full disclaimer within the full research report as a PDF (here) as fundamental risks and conflicts of interest exist.

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Name: MGX Minerals Inc.
Canada Symbol: XMG
Germany Symbol / WKN: 1MG / A12E3P
Shares Issued & Outstanding: 61,574,237
Phone: +1 604 681 7735

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