MGX Minerals Inc (CSE:XMG) (OTCQB:MGXMF) reported good progress with its oilsands wastewater treatment technology on Wednesday.
The system, developed by the group's engineering partner Purlucid, can remove silica, dissolved ions and dissolved oil from waste brines generated by the heavy oil industry and has now entered the third milestone phase of the project - namely its installation at a mid-sized oil producer in Alberta, Canada.
Vancouver-based MGX owns 60% of PurLucid and has the right to acquire up to 100% of the group.
In a statement, MGX said: "Commercial scale continuous operations commenced July 25, 2019. Once Milestone 3 is completed and the project transitions to the commercial contract, expected revenue is C$1.8M with an estimated net profit of C$270,000 over a three-year contract."
These numbers include equipment payback, which remains the property of Purlucid throughout the life of the contract.
MGX Minerals said the system had been extensively tested earlier this year at an independent research facility on an array of wastewaters from the heavy oil industry in Alberta and proved its treatment capabilities for three potential industry clients. In total, C$4.6 million in costs was recouped from a combination of consortium partner contributions through the completion of the second milestone phase.
First high pressure system
Purlucid has also developed the first high pressure system and is in the process of moving it to the consortium partner site as part of a commercial contract, MGX noted.
That deal, similar to the first unit, will generate revenue of around C$2 million with an estimated net profit of C$300,000 over a three-year contract once it transitions to commercial operations in early 2020, the company added.
Engineering for a third and larger system will be completed in fall 2019 for installation at a third consortium member site in early 2020. That system is expected to generate C$3.2 million with an estimated net profit of C$480,000 over a three-year contract upon successful completion of milestone 3 in the second quarter of 2020.
Purlucid is now pursuing a number of larger opportunities outside the heavy oil sectors in mining and geothermal water treatment, MGX said.
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