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Mag One Products (CSE: MDD) issues update on magnesium metal ingot program

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Mag One Products has issued an update on the company’s program to produce 99.9% pure magnesium metal ingots, high-purity magnesium compounds, and by products, including magnesium oxide and magnesium hydroxide.

Additional Information:

Company: Mag One Products
Website: http://www.magoneproducts.com
Stock Symbol: CSE: MDD
Date Published: May 19, 2016
Transcript: Available

Video Transcript:

I’m Tia Borden for Investmentpitch Media

Mag One Products has issued an update on the company’s program to produce 99.9% pure magnesium metal ingots, high-purity magnesium compounds, and by products, including magnesium oxide and magnesium hydroxide.

The company has secured access to 30 million tonnes of low-cost tailings, containing an average of 23% magnesium, at its Danville, Quebec site, which the company believes is sufficient for 70 years of magnesium ingot production, at a rate of 100,000 tonnes per year, utilizing 20 modules.

Originally, Mag One contracted to purchase the tailings from Mine Jeffrey for $1.50 per tonne.

Mine Jeffrey has agreed to reduce the cost to $1.00 per tonne, a savings of $15 million, provided Mag One starts production by January 1, 2017.

The company’s first 10,000 tonne per year, environmentally benign modular manufacturing plant is now in an advanced stage of design, and the company is targeting to begin producing pure magnesium oxide at a quality greater than 98% by the end of 2016.

This is a precursor to the company’s ultimate aim of producing magnesium metal ingots.

The company will be targeting primarily the automobile and aeronautical sectors, where the magnesium will be a lower cost and lower weight substitute metal.

It is estimated that, by 2020, 250 pounds of magnesium will replace 500 pounds of steel, and 90 pounds of magnesium will replace 130 pounds of aluminium per vehicle, resulting in an overall 15% weight reduction.

The company recently announced plans to enter the high-performance wallboard market through a partnership with California-based MagBoard LLC.

Recent independent laboratory tests in Quebec have provided key evidence supporting the company’s production process concept, with the results to be released following completion of two additional patent applications.

The company has also announced that Dr. Jagmohan Singh, formerly with the renowned Oak Ridge National Laboratory in Oak Ridge Tennessee, has joined Mag One to provide key technical assistance to Dr. Jim Blencoe with the magnesium commercialization.

It is interesting to note that both Dr. Singh and Dr. Blencoe will be working to develop similar modular production methods for manufacturing lithium hydroxide and other lithium compounds from spodumene,

A key advantage that spodumene has over its more popular brine rivals is the purity of the lithium carbonate it can produce.

Dr. Blencoe brings lithium experience to the project, having been part of a lithium-production patent application team while at Oak Ridge National Laboratory.

eResearch recently issued a buy recommendation on Mag One, with analyst Bob Weir giving the company a speculative buy recommendation and a target price of $2.10, a premium of 75% to the $1.20 price on April 18th, the day the report was issued.

Analyst Bob Weir stated: “The plant site’s strategic location coupled with easy accessibility of affordable resources and low cost ore represents tremendous scope for Mag One to monetize its resources. The site is located within an industrial area that, because of its close proximity to the USA, has a long tradition of export to that country. Thus, Mag One should be in an excellent competitive position to supply the U.S. market.”

The shares are trading at $1.67, well below the $2.10 target price.

For more information about MAG ONE, please visit the company’s website www.MagOneProducts.com. For a copy of the research report, call 604-669-4771 or email IR@MagOneProducts.com.

I’m Tia Borden for Investmentpitch Media