MGX Minerals Inc (CSE:XMG) (OTCQB:MGXMF), the energy metals and materials group, revealed Friday it is set to start drilling at its Driftwood Creek magnesium oxide project in British Columbia next week.
The move comes after the firm reported in August this year that it had received a permit for up to 50 holes.
The aim of the drilling is to complete comprehensive infill and extension drilling at Driftwood as part of ongoing work for a pre-feasibility study (PFS), which will add to a preliminary economic assessment (PEA), completed in March last year.
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Magnesium oxide, otherwise known as magnesia, is a widely used industrial mineral that comes in various forms, including dead burned magnesia (DBM) and fused magnesia (FM).
It is used to make fertilizer and animal feed, among other products, and as a refractory material in the steel industry.
MGX wants to provide a stable, long term supply of magnesia to the North American market with quality products of consistent grade and purity.
Driftwood Creek already boasts a resource of around 4.7 million tonnes at 43.27% magnesia in the measured and indicated category
Highlights of that preliminary economic assessment last year showed a pre-tax net present value (NPV) of C$529.8 million and an internal rate of return (IRR) of 24.5% with a 3.5-year payback.
Initial capital costs were pegged at C$235.9 million for a conventional quarry pit mine with a 1,200 tonne per day (tpd) processing plant.
The average annual magnesium oxide (MgO) production was put at 169,700 tonnes during a 19-year mine life with average head grades of 43.27% of magnesium oxide.
Shares nudged up 4.55% on Friday at C$0.12 each.
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