Technically and fundamentally, MGX Minerals Inc. is in a highly interesting situation right now, especially thanks to today´s news, in which the record date of the proposed spin-out of its wholly owned subsidiary, ZincNyx Energy Solutions Inc., has been disclosed: If you are a shareholder of MGX on Friday, June 29, 2018, you will receive the payment of a dividend: Shares of ZincNyx, which company has been proposed to become a standalone public entity to be listed on an exchange.
Over the next 60 days (until the record date), a run on the shares of MGX could occur as such dividends are quite rare in the junior resource space and typically highly lucrative as no costs are involved for existing shareholders to receive "free shares" of a new public company.
• What makes this spin-out even more attractive is that the spin-out shares are not expected to be subject to any statutory hold periods, i.e. the shares will be free trading on the first day of listing on an exchange.
• What makes the next 60 days potentially "explosive" is that if you are short on June 29, you will have to pay the appropriate dividend back, which is virtually impossible because MGX wholly owns this private company. So anyone that is short on that day will be somewhat in "trouble"... So over the 60 days, we may see some significant short covering and "turn of the tides" in the market.
• What makes this spin-out so interesting for shareholders to hold is that tens of millions of dollars have been invested into the ZincNyx battery storage technology over the last years by Teck Resources, the original private company that Teck acquired, and Canadian government funds. Importantly, the technology now looks ripe for demonstration in New York City later in 2018 and commercial deployment (initial target production of 1,000 units annually) by early 2019.
• On April 4, MGX announced that the final assembly, site preparation and deployment are underway for its initial lithium extraction system for oilfield wastewater (petrolithium). The installation at 2 separate petrolithium sites in Alberta is expected to be largely complete by June 2018. Therefore, another good reason for investors to own the stock may emerge over the next 30-60 days.
Technical Perspective: Thrust Imminent
Live Chart (15 min. delayed): http://schrts.co/vHgP4v
Unrivaled Low-Cost Energy Storage Solution
Most interestingly, the ZincNyx technology is unrivaled because compared to other flow battery designs (e.g. based on vanadium), ZincNyx is simpler (e.g. only 1 tank instead of 2) and has lower exposure to commodity prices. "This is a low-cost solution, and it will remain a low-cost solution”, Lazerson emphasized. While vanadium pentoxide prices have risen by over 20% in 2017, and ferrovanadium by almost 10%, the zinc price has rarely gone beyond $1.60/pound since 1989, trading at $1.55 last December. The 2 key ingredients in lithium-ion batteries, cobalt and nickel, were priced at $35 and $5.60 per pound, respectively, last December.
ZincNyx has assembled an experienced team of professional engineers, scientists and business managers to execute the development and commercialization of a dependable renewable energy source. ZincNyx has developed a patented regenerative zinc-air fuel cell battery technology that efficiently stores energy in the form of zinc particles and contains none of the traditional high cost battery commodities such as lithium, vanadium, or cobalt. The company owns an intellectual property portfolio of more than 20 granted patents. It has strategic alliances with the National Research Council of Canada, the University of British Columbia and the Simon Fraser University.
Energy storage is a growing industry in a fast-expanding market. From the ever-increasing need for renewable energy storage in developing countries to the requirement for reliable backup power in cities all over the world, ZincNyx offers an environmentally sustainable solution for a wide range of applications. ZincNyx has the lowest cost and most reliable technology for long run applications in the 10 kW to 1 MW segment. ZincNyx will target an estimated $10.5 billion market for its modular and scalable energy storage system:
“Solar is going to be the key. I think, though, with the right partners, we’ve got something great here,” ZincNyx CEO Suresh Singh told Business in Vancouver. He expects the energy grid is going to change fundamentally in the coming years after companies spent years focusing on solar energy solutions. Because the price of solar has fallen so significantly recently, Singh said the focus is now being directed toward storing all the energy that is generated. Energy storage solutions have increasingly become a holy grail of sorts for tech companies.
According to Vancouver Sun: The market is driven mostly by other jurisdictions, such as California — where the utility regulator has mandated that renewable-energy suppliers start develop certain amounts of storage capacity — as well as China, Japan and Germany, where increasing amounts of renewable energy coming into the system can overwhelm their respective grids.
Energy storage is a billion dollar market with worldwide applications. With a cost-effective solution for energy storage, clean energy is made reliable and available as and when required with the ZincNyx technology. The technology allows for low cost mass storage of energy and can be deployed into a wide range of applications, including:
• Utility-scale storage and power grid load stabilization
• Long term backup power for industrial, commercial, and military facilities
• Remote location off grid and micro grid applications
• Diesel generator replacement or hybridization
ZincNyx’s technology consists of 3 main subsystems that use zinc and air to store energy in the form of zinc particles. When the system is delivering power, the zinc particles are combined with oxygen drawn from the surrounding air. When the system is recharging, zinc particles are regenerated and oxygen is returned to the surrounding air.
Technological Breakthrough Accelerates Commercial Deployment
In January, MGX announced a major technological breakthrough by ZincNyx. Those that know about battery tech will immediately realize how important this breakthrough is, especially when considering that it’s patented. The long standing issue of metal-air batteries: Weak reliability due to the growth of zinc dendrites within the battery. The problem occurs when fine-threaded filaments of zinc crystals grow in unintended areas and may cause membrane ruptures or short circuits.
The ZincNyx system is immune to this problematic phenomenon as it uses these zinc dendrites as fuel and consumes them as part of its normal operation. This technological breakthrough brings far reaching consequences because the avoidance of dendrite damage is the single most significant hurdle in the development and commercialization of zinc-air flow battery systems. As this technical challenge has now been mastered successfully, ZincNyx has already started the commercial design for the mass production of its scalable 20kWh capacity zinc-air mass storage battery.
• The zinc-air battery is an innovative mass energy storage system which can be readily scaled from kilowatt to megawatt range.
• Most interestingly, the ZincNyx system is simple to manufacture in multiple locations using conventional methods – it does not require a Gigafactory!
• The main advantage is the low cost in comparison to other energy storage systems which traditionally include high-priced commodities such as lithium, cobalt and vanadium. The ZincNyx batterry solely includes zinc particles to efficiently store energy. The materials used in the manufacture of a full ZincNyx energy storage system are inexpensive and plentiful: zinc, magnesium, nickel, carbon, plastics.
Figure 1. Principle of Operation
• The technology emits no greenhouse gases or pollutants and does not contain any heavy metals.
• It’s a closed system and because there is no buildup of dendrites it never needs to be refueled and it does not corrode. The zinc particles are charged by solar or wind, or whatever the charged zinc goes into the fuel tank, where the energy is stored and then on demand is pumped into the fuel cells and then back to the regeneration area to be recharged.
• Video: https://vimeo.com/90421594
• Further information: www.zincnyx.com
Figure 2. ZincNyx U.S. Patent Coverage
• Unlike conventional batteries, which have a fixed energy/power ratio, ZincNyx’s technology uses a fuel tank system that offers flexible energy/power ratios and scalability. The storage capacity is directly tied to the size of the fuel tank and quantity of charged zinc fuel, making scalability a major advantage of this flow battery system.
• The ZincNyx system is a true flow battery, thereby completely decoupling the energy and power capabilities of the system. The energy capacity can be increased simply by providing more fuel. This fuel (particles of zinc plus oxygen drawn from the air) is very inexpensive – estimated to be less than $25/kWh. Since the air does not need to be stored within the system, the size of the fuel tank is considerably reduced compared to other flow battery chemistries.
• The ZincNyx system can also be described as a regenerative fuel cell – the fuel can be regenerated electrically and never needs to be replaced. The ZincNyx system provides the benefits of a hydrogen fuel cell without the need to transport and store hydrogen.
• The system is composed of 3 major subsystems: The zinc regeneration subsystem, the fuel storage subsystem and the power generation subsystem. Each subsystem can be sized according to the application requirements: Regeneration capacity (kW), energy storage capacity (kWh) and power generation capacity (kW). This is particularly important in photovoltaic applications where the duration of usable sunlight for regeneration may be limited to 6 hours or less. The separation of functions enables each subsystem to be optimised for its application and to utilise the most cost-effective and durable materials.
• The ZincNyx system does not require air conditioning since it operates above normal ambient temperatures (50-70°C).
• Another major advantage of the zinc-air flow battery is the ability to charge and discharge simultaneously and at different maximum charge or discharge rates as each of the charge and discharge circuits is separate and independent. Other types of standard and flow batteries are limited to a maximum charge and discharge by the total number of cells as there is no separation of the charge, discharge and size of the fuel storage system.
• Lowest cost energy storage for durations of 4 hours and greater
• Scalable, robust, reliable
• Insensitive to environmental and operational conditions
• Safe: No toxic, explosive or combustible materials or poisonous gasses
• Flexibility to optimize for power and energy needs
What others think about the ZincNyx technology: www.zincnyx.com/blog-multi-author
On April 16, MGX announced "Expanded Capacity of Next Generation Zinc-Air Fuel Cell Battery": "ZincNyx Energy Solutions Inc. has developed new methods to expand the capacity of its zinc-air fuel cell battery as part of the mass production design phase..."
On April 18, MGX Minerals Inc. announced a ground-breaking partnership agreement between ZincNyx and New York based systems integrator Digital Energy Corp. According to the agreement, Digital Energy will install the ZincNyx battery system at a demonstration site in New York City and upon successful completion of the first project, both companies will develop additional installation sites and work to expand distribution of the ZincNyx technology in the US, as President and CEO of ZincNyx, Suresh Singh, explained:
“We are delighted with this partnership with Digital Energy. Digital’s years of experience with system integration and energy generation will greatly enhance our ability to deploy energy storage solutions throughout the United States.”
The first project in New York City will demonstrate ZincNyx’s patented zinc-air flow-battery technology in combination with an onsite co-generation plant to reduce cost and increase revenue through multiple value streams, including peak shaving, demand response and economic dispatch. The ZincNyx flow battery chosen for this project employs a unique zinc-air chemistry that is safe for use in densely populated areas. The project will identify the operational and regulatory requirements to be satisfied for deployment in the state of New York.
Digital’s choice, amongst many high capacity batteries, is the zinc-air system that has long been recognized as highly advantageous due to its inherent safety, high energy density and abundance of its raw materials. The other unique advantages of the ZincNyx system, such as the ability to simultaneously charge and discharge, flexibility to optimize power and energy needs, low cost of energy for long durations and modularity, further simplified the decision. Vice President of Digital Energy, Jon Lilian, commented:
“Digital is excited to partner with ZincNyx to bring lower cost energy storage solutions to New York State. We believe the ZincNyx flow battery product, along with revenue streams from the New York State REV initiative and the NYISO, will provide a high value proposition for this and future projects.”
Rockstone Reports covering ZincNyx
MGX Minerals Inc.
#303 - 1080 Howe Street
Vancouver, BC, Canada V6C 2T1
Phone: +1 604 681 7735
Shares Issued & Outstanding: 102,718,156
Canadian Symbol (CSE): XMG
Current Price: $0.84 CAD (04/30/2018)
Market Capitalization: $86 Million CAD
German Symbol / WKN (Frankfurt): 1MG / A12E3P
Current Price: €0.56 EUR (04/30/2018)
Market Capitalization: €58 Million EUR
Report #55 “The First ZincNyx Energy Storage Plant to be Deployed in New York City“
Report #54 “MGX in Final Stages of Commercial Deployment, Second Petrolithium Contract Already in the Making“
Report #53 “MGX-Highbury Accomplish Almost Complete Gasification of Petcoke, Produce High-Grade Vanadium Concentrate“
Report #52 “MGX Set to Alter Lithium Landscape, Partners with Investment Bank Heavyweight Capstone Headwaters“
Report #51 “Congratulations! MGX Nominated in 2 Categories as a Finalist for the S&P Global Platts Metals Awards“
Report #50 “MGX Gets Serious About Magnesium, Engages Hatch for Magnesium Metal Scoping Study“
Report #49 “MGX to Acquire and Commercialize Clean Technology for Extraction of Lithium and Aluminum from Spodumene“
Report #48 “MGX Minerals Issues PEA for a World-Class Magnesium Project in British Columbia“
Report #47 “High-Grade Battery Metals From Dirty Petcoke“
Report #46 “Big Times Ahead For Several Joint Ventures from MGX Minerals“
Report #45 “MGX Partner Broadcasting on US Television“
Report #44 “The Big Rethinking Begins: Multiple Lithium Projects in Chile Test the Rapid Lithium Extraction Technology from MGX“
Report #43 “Global Lithium Dominance? MGX Doubles Performance of Lithium Extraction Filters“
Report #42 “Scores of Tail Winds for MGX becoming a Leader in the New Energy Economy“
Report #41 “MGX Goes Big, Develops Utility-Scale Battery Storage System“
Report #40 “Positioned to Profit from Transition to New Energy Economy“
Report #39 “MGX Assembles Dream Team For California Lithium Strategy“
Report #38 “MGX: The Next GreenTech Energy Giant“
Report #37 “MGX Partners with Highbury Energy to make Petroleum Coke more Clean“
Report #36 “Technological Breakthrough in the Mass Energy Storage Industry“
Report #35 “Eureka! MGX Starts Developing Silica Projects after Acquisition of Mass Storage Battery Technology“
Report #34 “MGX Going Big on Petrolithium: The first large-scale integrated petroleum and lithium project ever developed“
Report #33 “Driving into the Realms of Tesla & Co: MGX Acquires Mass Storage Battery Technology from Teck Resources“
Report #32 “Backed by Private and Institutional Heavyweights: MGX cashes up for Lithium Extraction and Exploration“
Report #31 “MGX Revolutionizes the Lithium World - Commissions First Rapid Lithium Extraction System“
Report #30 “Full Steam Ahead: MGX Engages Senator Polanco (Ret.) to Head California Lithium Brine Strategy“
Report #29 “MGX to Target Geothermal Market for Extraction of Lithium and Gold“
Report #28 “MGX Minerals Commences Development of the World‘s First Petrolithium Field“
Report #27 “Canadian Government Backs MGX Minerals‘ Petrolithium Cleantech“
Report #26 “MGX Minerals Solves the Magnesium Problem of the Lithium Industry“
Report #25 “Hard-Rock Lithium Exposure for MGX“
Report #24 “One of the Largest Initial Oil Estimates in US History“
Report #23 “MGX starts Petrolithium pilot plant to deliver hard facts for strategic partners“
Report #22 “Time to bet: Sprott takes a position in MGX“
Report #21 “Petrolithium: First Come First Served“
Report #20 “Successful Independent Verification of the MGX Lithium Extraction Technology“
Report #19 “MGX to Drill the World‘s First PetroLithium Well in Utah“
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: This report contains forward-looking information or forward-looking statements (collectively "forward-looking information") within the meaning of applicable securities laws. Forward-looking information is typically identified by words such as: "believe", "expect", "anticipate", "intend", "estimate", "potentially" and similar expressions, or are those, which, by their nature, refer to future events. Rockstone Research and MGX Minerals Inc. cautions investors that any forward-looking information provided herein is not a guarantee of future results or performance, and that actual results may differ materially from those in forward-looking information as a result of various factors. The reader is referred to the MGX´s public filings for a more complete discussion of such risk factors and their potential effects which may be accessed through the MGX´s profile on SEDAR at www.sedar.com. Please read the full disclaimer within the full research report as a PDF (here) as fundamental risks and conflicts of interest exist. The author, Stephan Bogner, holds a long position in MGX Minerals Inc. and is being paid a monthly retainer from Zimtu Capital Corp., which company also holds a long position in MGX Minerals Inc. Note that neither MGX Minerals Inc. nor Zimtu Capital Corp. have reviewed all of the content prior to publication and may not agree with statememts made herein.