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LONG SHOT POSSIBILITY: The news today from MGXMF: MGX Minerals Announces Partnership with University of British Columbia to Develop Metallurgical Silicon Based Anode for High-Energy Lithium-Ion Batteries.
I know sensationalism of news from a company like this one can sometimes be ignored because it's been heard too many times, but with the MGXGF announcement today, if this technology is proven, it would totally alter the landscape of energy storage. The economic impact would block almost any new energy storage technology that might threaten the Lithium market, making the demand for Lithium maintain demand for well over the expectancy of 5 years. I would project it out to 15 or 20 years...This would definitively put MGXMF well ahead of any producer out there.
But time will tell and if it happens, we will have a very, very hot stock on our hands....estimated time of development is between now and 2 years.
November Interview with Seeking Alfa, exposes a much clearer picture of what the future holds for MGXMF. Jarad made the following statements:
Mr. Lazerson estimated that MGX could have a $15 million annualized revenue run rate upon deployment of four wastewater treatment systems.
OK..
If you have $15 million for four units and then note that MGXMF is building 3 large units per month...That's one hell-of-a lot of revenue estimated in one years time. Let's just underestimate the calculation...let's say 2 units per month are built. In one year MGXMf would have 24 units. 4 into 24 units is 6. 6 times $15 million is $90 million for just one years revenue. That one year most likely will be 2019... Not to shabby....assume no serious market crashes, etc...
Feel your pain...Previously, there had been statements from the company indicating that revenue would be reported in Nov or at least by the end of this year...then those statements moved to sometime in 2019...MGXMF is simply missing their promised revenue report dates which is frustrating investors.
The company or i should say, the technology is solid, otherwise they would not have won the NASDAQ technology award, which would only be given if the technical community did their due-diligence...
I would be buying again, as soon as I can see a directional change in the stock price.
Eventually it will hit critical mass and the stock price will start to gain momentum to the upside. I was really hoping for a revenue announcement before the end of this month, but who knows..There is a lot in play, it just has to come together at some point....
It's good news as far as the proof-of-concept, but not very good news on the revenue side.
Remember, they are getting paid $35 dollars per cubic. There are only 40 cubic meter being processes. It appears that they made only $1400 dollars - at best. ... Not too encouraging for any investor, but long term, this company should shine!! Long term is probably about 2 years.
If you are an investor with this understanding, you should be buying in this current price area...Looking to the future for good returns..
Deploying 3 large capacity units per month...That's a real nice projection of growth of this company!!!
Where is Tesla's giga-factory located??? Where is MGX planning (unannounced) to deploy their first 20m3/h unit?????$$$$$ Strange coincidence???? Maybe hopeful thinking, but it certainly makes sense..... time will tell.
If they are wise, they will put that money into instruments that make money, otherwise, they will not be wise!!
Looks like they will deploy their first 20m3/h unit in Utah in the Paradox Basin. This should further expose them to the U.S. market of investors, Lithium companies, and oil companies...
Previous calculations would indicate that a 20m3/h should bring in a minimum of $200k per month from a 500ppm well. If they build 8 units from the 8 million they received from CA, that's 8 time $200k or 1.6 million per month...NOT BAD!!!
The 8 million they got from CA gov should allow them to build a minimum of 8 20m3/h units. That's a great shot in the arm!!!
What makes MGX a great company and a nice investment (long term) is that it is very diversified (keeping all of their eggs out of one basket). MGX makes money on water treatment, selling minerals extracted from the water treatment, their own Lithium wells (which will be operational in 2019), Magnesium mining, silicon mining, new energy storage technology, and even receiving funding from the CA government (8 million). Additionally, they have some great alliances with major oil and Lithium producers....
Long term,assuming nothing catastrophic happens that would destroy the company, this company is a GREAT investment!
From today's announcement it looks like Early Jan for deployment of the 20m3/h unit. Note that their strategy is to deploy it into the most profitable situation. This unit will most likely be their bread and butter unit.
I am not aware of ANY oil company to runs just 8 hours a day. All the oil rigs I'm familiar with run 24/7. Any down time is a huge cost to any rig....
Oh, I left out the sale of minerals that might be derived from the process....Just a nice adder!!!
The math is starting look much better. If they run the 20 cubic per hour for 24 hours a day (not sure what the down time is for maintenance) at $35 per cubic meter....$700 dollars per hour. 24 hours x $700 = $16,800. 30 days x $504,000.00 dollars. NOT BAD!!! It looks like one 20 cubic unit would pay for itself in one month, if my math is correct!!!
Then add the 8 million that the CA donated...hey, this company is starting to ROCK!!!!
There are a lot of companies like BEAG, but they suffer the same underline problem of processing Lithium. That's were MGX comes in.
PurLucid has been awarded a non-repayable contribution totaling up to C$8.2 million in government funding to support the commercialization of a low energy water treatment system for the oil and gas industry (see press release dated November 6, 2017).
By all calculations, the 1,500 bpd system will definitely be a profit center even on lower 500ppm cores. This is very good news and even better financial news is that some of the effort is being funded by the CA gov. The next few months should exciting....lets hope!!
Finally, news on the silicon front!!! "SUITABILITY FOR METALLURGICAL GRADE SILICON CONFIRMED" as MGX operates three silicon projects in southeastern British Columbia- Koot, Wonah, and Gibraltar.
I understand now why there is so much drilling going on. They need to find a spot that has at least 500ppm of Lithium, otherwise, the profits are too small. Today's MGX news from Chile shows that the Northern Lagoon has almost 700ppm. So that would be a good spot.
Mfinvest: It looks like your conversion is very close to the best possible brine ppm based on the MGX drill sample reports. ("500 ppm as avg concentration, figure 4-5 pounds per 1000 gals processed").
That's very depressing. It will take MGX many years and many installations before they start to show profit at that rate of extraction. The throughput is just too low to quickly push the stock price upwards anytime soon.
To make matters worse, if MGXMF operates joint ventures at 50%, that would mean that potential profits would 50% less than what was calculated (at $45k). Basically, there's not enough cash flow to keep MGXMF alive at those calculated values. The cost of building one 750 bpd unit, based on 4 months of manufacturing to installation is probably on the order of $250k, or more (yes, a guess, but I bet it's not that far off).
Too many assumptions, but if $45k was on the low end and $100k per month on the top end, that spread would is not that bad. Each installation will have a different return on investment. Time and data will tell.
Ok. PLEASE CHECK MY MATH.
A 750bpd installation (one commercial unit), if we use 55 gallons per barrel = 41,250 gallons per day.
At 5lbs per 1000 gallons, one day would produce only 206 lbs. 30 days would produce 6187.5 lbs or 2.8 metric tons. At $16 per metric ton, this would be $45k per month, before refinement cost and operational cost and assuming market price for Lithium stays equal to $16k per metric ton.
At $45k, this price is then further watered down by other cost, like refinement and monthly maintenance, so, maybe their profit would be around $20k per month. Even if water treatment was include, I would not expect more than a few thousand dollars month, which might cover operational cost. So, maybe they would have a profit for one unit of $20k to $30k per month, which is awful (assuming my math and assumptions are correct).
If this is the best that they can do, I would not bother investing in this company. It would take thousands of installations and many years before they would be considered to be a profitable and viable investment. Worst, is that if there is a small drop in Lithium price, this company would disappear overnight.
I am really hoping my math shown here, is either incorrect or the assumptions incorrect and that my original calculations are somewhat close to reality.
I know that a lot of people (including myself) hate the drilling exercise that MGX is performing, but if you look at the content reports from these drills, you can derive with some reasonable numbers what the Lithium content might be for a barrel of water. In my posted calculation, I believe I did a very low value estimate. Once MGX starts tapping into these wells, the tonnage per month per each unit should be several times over what I estimated. That's, if I am not mistaking, is the REAL excitement for MGX investors.
where did you get the numbers
1lb per 55 gals
$16k per 2200lbs
I am ONLY estimating on what might be (tonnage, etc.) on this first installation of the commercial-scale 750 barrel per day (bpd) system. Since they are processing brine from multiple customers, it is impossible to determine how much Lithium might be in one barrel since each customer will certainly have a different concentration of Lithium. Therefore, I used a guess of 1 lbs per barrel of water.
For market price of Lithium, do your own search to confirm the price. A metric ton is 2200 lbs. Market price is $16k per metric ton.
The following is a very rough calculation for profit and expected revenue. Please check to make sure my math is correct:
One Gallon of water is approx 8.35 lbs. A 55 gallon barrel of water, the water will weigh in at 55 gallons X 8.35 lbs or about 460 lbs. If one barrel produces one pound of Lithium, then a commercial-scale 750 barrel per day (bpd) system will produce 750 lbs of Lithium in one day (optimistic, but possible). This translates to about 3 to 5 days to produce one metric ton of Lithium. A metric ton of Lithium is $16k. Based on these calculations, every month would generate almost $100k worth of Lithium from one 750 bpd system.
Base on the expected production of Lithium from one unit, I would project that the first saleable metric tonnage should occur within one to two months after one unit goes on line.
If the math is anywhere's near accurate, then MGX has a lot of potential!!!
Finally: Update on Spin-Off of ZincNyx
The Company is also pleased to provide an update on the proposed spin out of ZincNyx into a publicly traded company (the “Transaction”). An additional dividend date will be set shortly in which MGX shareholders of record will receive an additional 7% of payment in kind of ZincNyx shares, modifying the total amount whereas 60% of outstanding shares will be owned by MGX and 40% will be paid as a dividend to MGX shareholders. The Prospectus is expected to be filed this month and Zincnyx is now planning on going public by way of Initial Public Offering.
I think what MGX means by "first" is that it is delivering the first product of this kind and of this capacity to a location.
This company needs to show real revenue, otherwise the stock price will continue downward.
As of today, there are actually more than two installations functioning (based on my understanding from reading the MGX website news). All are in CA and have various capacities.
There has to be something like that. We just don't know the revenue structure of one unit at a specific location. If it is considered, then it most likely will very based on the site and/or customer. Example; A site might not produce much Lithium or any at all, but because of governmental regulations or the effort by the oil company to reduce cost, some will pay for the brine water to be purified or cycled for reused either by the oil company or gov, etc. There are a lot of variables to how the revenue stream would or should be structured. It would nice if MXG would disclose those arrangements for each installation. Equally important, from an investors interest, is what is the expected revenue from those joint ventures.
Agreed....
The good news is that there are two other installations working since early 2018. They have been used to hone this new installation (improved design for greater efficiency and getting the bugs out of the design). Those two other installations should already have produce some tonnage of Lithium, which is what I expect to be sold this October-Dec time frame. if this new installation operates as expected, it would simply add to that tonnage.
Not sure if you read that correctly, but the way I read it; it is one unit, centrally located, that will allow multiple clients to dump their brine into for processing. Yeah, I think just one unit. That unit will need to process enough brine to cover it's unit cost, operating cost, etc.
What is needed is information as to how much tonnage is produced by one unit with brine of a specific percentage content of Lithium per hour.
Does shipping mean that there was a monetary exchange as in some sort of revenue?? Was it sold or leased? It is good news either way. Just wonder about how the money flows, if at all....Not clear as to what are the financial arrangements are under these circumstances...
Good article, but also note how slow mineral companies move in price:
http://energymetalnews.com/2018/02/05/manganese-will-overtake-lithium-and-cobalt-combined/
Good Post 222- It's the nature of that kind of industry (mineral, oil, etc.) It tends to be slow, but with MGXMF, the company branched out to cover wider market(s). If all written about this company is true, this company is not going away anytime soon....I am continuing to buy, but carefully, as it drops down toward 30 cents.
October has been mentioned as MGX's month to make the first sale of minerals (I suspect lithium, but it could be a variety of other minerals). Taking October as the first banner month, I would stay positive, in fact I would stay positive up to Feb 2019.
In the dark, like everyone else. I could, however, start a rumor.....They might be looking at a buyout before separation, or they maybe retracting the separation offer to beef up the cash flow of MGX, if the mineral extraction is not producing or is showing profitability as expected. Know how technology evolves, I suspect the latter might be more realistic.
If MGXMF can successfully extract Vanadium as noted in the below news article, it would cover both the lithium and vanadium battery markets, which are BOTH huge markets. This would be very positive for any investor.
MGX has partnered with Highbury Energy Inc. to develop a thermochemical gasification process focused on generating hydrogen gas and extracting valuable metals such as nickel, vanadium and cobalt from petroleum coke (“Petcoke”).
Do a search for "vanadium flow battery companies".
That article simply points out that MGXMF may have a hard time getting oil companies to sign up to this technology of cleaning used water.