MGX Minerals acquires 110,000 acres of Paradox Basin, Utah oil and gas leases
VANCOUVER, BRITISH COLUMBIA / March 23, 2017 / MGX Minerals Inc.(“MGX” or the “Company”) (CSE: XMG / FKT: 1MG / OTC: MGXMF) is pleased to announce it has entered into a Joint Operating Agreement (the “Agreement”) with a private vendor to act as operator and acquire a 75% working interest in certain underlying Oil and Gas Leases (the “Leases”) located contiguous to the Company’s Lisbon Valley petrolithium project.
The Leases cover portions of San Juan County, Utah and San Miguel County, Colorado and will provide access to the brine-bearing aquifer systems within the Lisbon Valley area of the Paradox Basin. Preparations to permit the Petrolithium #1 borehole well will commence upon closing of the Agreement.
The Company plans to conduct well-sampling and collect seismic data to advance hydrogeological understanding within the Pennsylvanian-age Paradox Formation, which consists of a thick (>3,667 meters) evaporite sequence. The most active period of subsidence extended from mid-Pennsylvanian to Late Triassic time. Thick cyclic accumulations of salt were deposited early and influenced by irregular and episodic movements of the faults, resulting in salt redistribution and flexure of the overlying rock. As a result, there are a large number of identified clastic zones.
To earn a 75% working interest, MGX will make payments totaling US$2,000,000 on or before September 1, 2018. The Company can choose to accelerate payments and issue consideration totaling $1,700,000 on or before September 1, 2017, in which case the vendor will waive any additional payments due.
MGX has granted the vendor a Carry Period (“Carry Period”) in which MGX shall be responsible for 100% of all expenses incurred. The Carry Period shall be considered satisfied once MGX has made all required payments or drilled at least one well on the Leases on or before February 28, 2020. Upon satisfying these conditions MGX shall earn an undivided 75% working interest in the Leases and the vendor shall be responsible to contribute proportionate expenses equal to their interest in the Leases.
Overview of Lisbon Valley Oilfield
The oil and gas leases are proximate to the Company's Lisbon Valley Lithium Project which overlies the Lisbon Valley oil and gas field located approximately 40 miles southeast of Moab, Utah in the salt anticline belt on the southwest edge of the Paradox Basin in San Juan county. Historic lithium brine content has been reported as high as 730 parts per million lithium (Superior Oil 88-21P) at Lisbon Valley. The region is home to the former Rio Algom uranium mill facility, an active copper mine operated by Lisbon Valley Mining Company, and a natural gas processing plant.