Home / PODCAST: MGX Minerals Chairman Marc Bruner is Excited about the Paradox Basin

PODCAST: MGX Minerals Chairman Marc Bruner is Excited about the Paradox Basin

— James West

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MGX Minerals (CNSX:XMG) (OTCMKTS:MGXMF) (FRA:1MG) Chairman Marc Bruner, a third generation oil and gas executive who was Chairman and CEO of Falcon Oil & Gas Ltd. and served as Ultra Petroleum’s founding Chairman where he was involved in developing the Pinedale Anticline in Wyoming, is excited about the Paradox Basin. He joins James to discuss the region’s potential as a producer of lithium and oil and gas.

Transcript:

James West:    Marc, welcome back to the show.

Marc Bruner:   Thanks, James. Glad to be here.

James West:    So let’s talk a bit about the Paradox Basin, where it seems that MGX Minerals has staked quite a bit of its future. What is it about the Paradox Basin that we should be so interested in as lithium investors?

Marc Bruner:   Well, I think the significant thing is really two things: one, the lithium values are extremely high, and in some places as high as 1,700 parts per million, which is comparable to what some of the values down in Argentina are.

Ordinary seawater is 35,000 parts per million; this is 450,000 parts per million. So there are a lot of heavy metals in this brine, other metals besides lithium, that I think will also be of value in MGX’s separation process.

The thing I think is most exciting to me is that this is a very unusual area. It’s an area that has in these stacked, over-pressured pays, and I’ll describe what I mean in a moment. There’s up to 36 different clastic zones sandwiched between these impermeable salt layers, and virtually every single one of those has gas and oil or condensate in them. Some of the main pay zones are very, very thick, and they are three to four of those out of the 36.

So virtually any place that you drill in here, you’re going to find oil and gas. The question is, how much oil and gas are you going to find in any particular zone. And what we’re really looking for out here are fractures in those clastic zones, and you either find them drilling vertical wells or horizontal wells. So whatever we drilled in here, we’re going to be drilling vertically into some of the best zones, and then we’ll be drilling horizontal.

The exciting thing here is that, besides finding oil and gas and liquids, we’re going to be finding brines, and it’s my belief that once MGX tests these brines, I think that you’re going to see some very big values in the brines that, in all probability – at least in my opinion; we’ll see when the tests come in and the test results.

James West:    Okay. So, sounds to me like the real excitement here is that it’s not just an oil and gas play and it’s not just a lithium play, it’s a combination of both, and that you’re actually going to capture the mineral value simultaneously from both oil and gas and these solids in the brines.

Marc Bruner:   Right. And I might add, one of the things that we’re doing is, I think we have to make an announcement about it – we are in the process of getting a major firm that will valuate the oil and gas potential as well as, for the first time that I’m aware of, someone that would actually look for water production. We’re going to be looking at basically a water production reserves. We wouldn’t be able to assign any value to those reserves yet until the test comes in and we’re able to test these brines, but I mean, as far as I know, this would be the first report in the world that actually looked at that.

So I’m very excited about that and what’s happening there. It’ll be very interesting to see what that looks like, as both the oil and gas and the brines are assessed. I’m excited that that’s happening.

James West:    Do you think that the fact that this is a United States-based play has an influence on the potential upside in view of Trump policies and the proximity to Tesla?

Marc Bruner:   Well, I think that’s exactly right. I mean, one of the things that I think is important here is that right now, if you compare what we have here to other parts of the world, I’m not aware of any place in the world where you’ve got a situation where you have a pressure gradient of 0.65 to 0.9, and that’s basically over-pressured oil and gas as well as the brines. So when we do complete these wells, I mean, the pressures are so high and the flow rates, in my view, are going to be very significant for both the oil and gas and/or the brines.

So yeah, we’re going to be looking at and evaluating where the best brines are and where the best oil and gas is, and we’re going to make a decision as to how and what we want to complete. But this is, at least in my lifetime, the most exciting play that I’ve ever been involved in, and I think that we have over 100,000 acres of oil and gas leases and that we have over 100,000 acres of plaster claims out here over these oil and gas leases that allows us to own both the brines and the oil and gas. Very exciting times for us.

James West:    Is it safe to say that these brines and the oil and gas combined with the brines in the Paradox Basin are geologically unique in the world to the best of your knowledge, or are there multiple instances of this type of deposit out there?

Marc Bruner:   I’m not aware, okay, at least in the United States, of any other place like Paradox Basin, where you have these ancient salt layers and these clastic in between them that have the oil and the gas and the brines. And so many layers of this, we’re talking about 36 layers, okay? Over-pressured layers of oil and gas and brines. I’m not aware of any place in the United States or in the world, for that matter, that exists. But I’m extremely confident that no other place in the United States is as special and as unique as this is, that has both the heavy brines and the oil and gas.

I think the other thing you need to keep in mind is that this is not just going to be about lithium. This is going to be about magnesium and potassium and boron and a lot of other metals out here that would be a part of any kind of revenue stream.

So we need to do an analysis. I am confident that you’re going to have extremely high lithium values; we’ve already seen that in multiple cases in multiple wells out here. But it’s going to be other minerals besides lithium that will be a part of this revenue stream.

James West:    Okay. How long until we, as investors, have to wait to find out when this thing goes into production, and what it’s worth?

Marc Bruner:   Well, let me say that this engineer report that we’re having done is going to be based on previous wells that were drilled historically out here, and those wells are going to give us a lot of information in this report. So my hope would be that that report would be out within 30 days, and I’m very confident that this is going to be a significant report for MGX. I mean, listen, I might go as far to say that if all MGX had was the Paradox Basin, my opinion is, this is a company-maker.

James West:    Wow. All right, Mark, that’s a great update. Let’s leave it there for now. We’ll come back to you in a quarter’s time or so and see how the company’s making out. Thank you for your time.

Marc Bruner:   Thank you so much. Appreciate it.

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James West

James West

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I employ a Capital Efficiency Model that dictates money should never be exposed for longer than is absolutely necessary to the possibility of being lost. Thus, I routinely sell half my position when a stock doubles from my entry price, and I sell stocks that lose 20%, unless there are...
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