The Environmental Defense Fund estimates that over 800 billion gallons of wastewater are produced each year from oil and gas companies. If you could make that clean water, it would irrigate about 16,900 golf courses every day for a year, according to data from WaterSmart. Problem is, making it clean isn’t that simple or inexpensive thanks to high levels of chemicals, minerals and salt trapped in it.
There’s likely useful minerals in the waste water, right? That’s exactly what the experts and MGX Minerals (CSE:XMG) (OTC:MGXMF) thought, which spurred developing the technology to extract lithium and other valuable minerals from the wastewater.
That’s right, lithium. The silvery-white alkali metal that has seen prices spike due to its scarcity and high-demand revolving around its critical importance in producing rechargeable lithium-ion used in electric vehicles. It’s not even just that lithium is staring down a supply-demand imbalance as more and more electric cars and energy storage systems are produced each year; it’s that it’s slow and can be expensive. The most efficient way in use today is through an evaporation process that takes up to 18 months.
MGX, though, can strip that process all the way down to a day or so through its patent-pending rapid recovery process. In January, the Vancouver-based company proved it was more than just a vision, successfully concentrating lithium from heavy oil evaporator blowdown wastewater. Integrating its technology with partner PurLucid, MGX built a pilot plant in Calgary showcasing a method for not only extracting lithium, but also magnesium from the fluid that is a bane in the side of O&G companies worldwide.
The opportunity was so intriguing that it prodded oil and gas icon Marc Bruner to give up retirement to take the position of Chairman at MGX.
MGX has its own portfolio of assets, including a 75% working interest in the Paradox basin spanning the borders of Utah and Colorado and properties in British Columbia and Alberta, while also holding the crown as the owner of the largest lithium brine assets in North America, with approximately two million acres of prospective land in its portfolio.
That portfolio can keep even a large company busy, let alone a microcap like MGX. After only proving the viability and scalability of the technology in January, the company reported at the end of August that it has now processed wastewater and lithium brine from eight North American projects since July at its one-cubic-metre-per-hour plant.
Again, this is to prove out the economics of the technology. The bulk samples of one U.S. barrel each were brought in from six U.S. oil and gas sites and two mine sites in the U.S. and Canada. The output from the process has been independently assayed to verify lithium and other mineral recoveries, as well as clean water output to determine the environmental and water handling benefits.
Moreover, majors are taking notice. MGX says it has entered into analysis agreements with major oil companies across the continent and has completed testing at more than 25 locations in preparation for scaled-up operations. An initial 120-cubic-metre-per-day system is just about complete and the inaugural 1,200-cubic-metre skid-mounted system is being manufactured. The company intends to commence mass production of the systems next year.
While this technology could reshape how wastewater is treated, MGX hasn’t stopped with its other initiatives, including getting the pilot plant mill going and conducting geotechnical drilling to complement the NI 43-101 resources at its Driftwood Creek Magnesium project in B.C.; making progress with drilling at its Longworth Silica property; and conducting sampling at its Niobium-Tantalum-Titanium-REE project.
If a rolling stone indeed gathers no moss, there won’t be even a green tint to MGX for years to come at this rate, unless that green is that of revenue.
