by Greg Klein | June 18, 2015
A company that already holds most of British Columbia’s significant magnesite occurrences has signed a deal on a California project. MGX Minerals CSE:XMG announced a mining lease agreement on June 18 for the Needles magnesite property in San Bernardino county.
Magnesite ore can be calcinated to produce caustic calcined magnesia to produce wallboard. Magnesium oxide wallboard “is generally known to be stronger and lighter than traditional wallboard as well as being fireproof and non-toxic,” the company stated. The product is “often used in areas prone to flooding as the boards can retain moisture, dry out and still retain their shape and integrity.”
The lease of up to 100 years would have renewal options every 10 years. In return MGX would make annual payments of US$12,000, $24,000 and $36,000 over the first three years, then an annual $36,000 plus cost-of-living adjustment. The company would also pay $5,000 within 30 days and issue $10,000 in shares. A work commitment calls for $350,000 in spending within three years. The landowner would retain a 10% net profit interest which MGX may buy for $10 million.
Earlier this month MGX offered a private placement of up to $300,000 and announced a memorandum of understanding with an industrial furnace company to provide engineering services and calcining equipment for MGX’s flagship Driftwood Creek magnesium property.
MGX has a partnership agreement with Eaton Industries (Canada) and Highbury Energy to study the design, development and financing of Driftwood’s proposed mining and processing operation. The southern B.C. project currently undergoes permitting.