MGX Minerals Inc (OTCMKTS:MGXMF) has been a highlight in the mining segment of the OTC markets after their most recent share price uptick.
The company’s share price, after closing the year 2017 below $.8 rose at the beginning of the month to highs of up to $1.05. However, it finally closed yesterday at $.87. Another significant factor is that the shares traded have also gone up to nearly 2 million shares over the past two days.
All the above has been exemplified by the chart below:
With such a price uptick, the company seems to have something that the market is paying a premium for. As such, we took an interest in the operations of MGX Minerals Inc and came up with the following report.
History of MGXMF
Before getting into the intricacies, let us first have a brief look at MGXMF’s history.
MGX Minerals Inc was founded back in 2012 and has its headquarters in Vancouver, Canada. The company operates as a diversified mining company and is engaged in the development of large-scale industrial mineral portfolios in western Canada and the United States.
Currently, they operate lithium, magnesium and silicon projects within the regions of British Columbia and Alberta. Furthermore, they also operate a petrol-lithium exploration project in Utah.
The company is backing on the growth of the electronics industry as they work at being the go-to entity for raw material within this space. Their robust growth potential is supported by a strong and growing market, and nothing exemplifies this as their recent developments.
Developments Affecting MGXMF
Back in December, the company began a venture that would change the course of its operations.
Until then, MGX Minerals Inc was purely within the mining space, working diligently to ensure that their name within the extraction of lithium, silicon or magnesium was done to the highest industry standards. However, this alone wouldn’t cut it, and their management thought it better to build synergies with other industries.
As such, the company bought out ZincNyx Energy Solutions, a low-cost battery developer, from mining giant Teck Resources. Through this acquisition, the company had officially ventured into a whole new sector: the energy mass storage sector.
With the company’s realization that a lot of energy derived from solar panels goes to waste, yet their current business model relies heavily on these silicon-consuming solar panels, their objectives changed to ensure that they would benefit from the integration of their solar panel business with that of mass storage. This would see the company provide a complete and practical energy solution for their clients, a solution that would see them receive higher payoffs long into the horizon.
This announcement came only a month before they gave a release detailing the increased investment in PurLucid Treatment Solutions from 34% to 46% with the option of increasing it further to 100% over time. PurLucid Treatment Solutions, a company which has come up with a new method, as well as filed for a patent, related to brine treatment and selective lithium recovery.
This, when integrated with their exclusively licensed nano flotation technology which purifies wastewater brine boosts the efficiency of the purification and extraction processes through lower capital costs as well as requiring much lower investments as compared to the traditional evaporation method.
Such advancements are driving MGXMF’s share price up. Furthermore, their vision in seeing such huge investments and ensuring that they capitalize on them is part of the reason why the market seems to be quite interested in the company.
The company began the year with additional news on their extraction at Case Lake.
According to the release, the company as well as their joint venture partner, Power Metals Corp were proud to announce the positive results arising from their Main drill dike.
The results from this were quite positive, so much so that their share price ran up nearly 31% over the course of the release day. As such, our expectations, as well as those of the market, are that MGXMF is about to be deep in the money some days to come.
We, therefore, will look at their financials to understand how they will finance such expeditions.
Currently, the company has made no revenues over the recent quarters. Furthermore, they are at a loss position with their most recent loss, 4Q2017, standing at $4.8 million. Despite this being a significant number, they have had to work at it through cost cutting as they came from a quarter, 3Q2017, where their loss position stood at $7.7 million.
The fourth quarter, 4Q2017, also saw them close two private placements, one for $4.1 million which was oversubscribed and the second tranche of over $12.9 million.
Through the two tranches above, the company would obtain adequate funds to conduct their extraction as well as finance their growth and working capital needs (these especially being because of their negative working capital position of $97,039), all which processes are pivotal to their operations.
Currently, therefore, their primary goal is to ensure they are both profitable and cash flow positive. Upon reaching this purpose, the company will have achieved their strategic vision: being the giant in the industry.
MGXMF is working towards growth. Their vision as exemplified by the integration they have carried out is quite strong. With such a view, the payoffs will be not only existent but also consistent, a factor which causes us to remain bullish about the stock.
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Disclosure: We have no position in MGXMF and have not been compensated for this article.