TSX-V Trading Symbol: SURG
VANCOUVER, BC, Dec. 15, 2020 /CNW/ - Surge Copper Corp.
(TSXV: SURG) ("Surge" or the "Company") has
entered into a definitive option agreement (the "Option Agreement")
with Thompson Creek Metals Company Inc., a wholly owned subsidiary
of Centerra Gold Inc., a TSX listed Company ("Centerra") whereby
Surge will have the right to acquire a 70% interest in the Berg
copper-molybdenum-silver project through issuing C$5 million in common shares of Surge and
C$8 million in spending commitments,
in each case, over a period of up to five years. Berg hosts a large
porphyry copper-molybdenum-silver deposit located in the Tahtsa
Ranges in central British
Columbia. The main deposit at Berg is located
approximately 28km northwest of Surge's Ootsa project on a 34,798
hectare tenement package which is contiguous with the Ootsa
property. Berg is currently 100% owned by Centerra.
Dr. Shane Ebert, Chief Executive
Officer of Surge, commented: "The acquisition of Berg is highly
strategic to Surge, as it solidifies the Company's position in the
district, and adds both significant, high quality historical
resources, and a large, prospective land package. Surge is
advancing a multitrack agenda of aggressive exploration and
strategic copper district consolidation in British Columbia, and this transaction
represents an important step in our path forward."
HIGHLIGHTS
- Definitive Option Agreement to acquire 70% interest in
Berg
- Option includes $5 million in
share payments to Centerra plus $8
million in project spending commitments over a period of
five years
- 2018 resource estimate (classified as historical) of 397 Mt
grading 0.44% CuEq in the Measured & Indicated categories,
and 14 Mt grading 0.34% CuEq in the Inferred
category(1). A qualified person has not done sufficient
work to classify the historical estimate as a current mineral
resource or reserve and Surge Copper is not treating it as a
current mineral resource or reserve.
- Mineralization at Berg is close to surface, exhibits excellent
vertical continuity, remains open at depth and radially outward,
and is notable for having a significant supergene enrichment
zone
- Project is contiguous with Surge's Ootsa property, and is
located 22km northwest of the Huckleberry Mine and Mill Complex, in
an area of B.C. with excellent transport, power, and water
infrastructure
- Large land package with attractive pipeline of known porphyry
and polymetallic hydrothermal vein targets, including 16 known
magnetic anomalies developed through airborne geophysics
- Select historic drill hole highlights are shown in the table
below
Table listing select historic holes drilled in 2011 by
Thompson Creek Metals
Hole
|
From
(m)
|
To
(m)
|
Interval
(m)
|
Cu
%
|
Mo
%
|
Ag
g/t
|
Cu Eq
%*
|
BRG11-215
|
54.0
|
404.2
|
350.2
|
0.41
|
0.031
|
8.3
|
0.60
|
including
|
54.0
|
134.4
|
80.4
|
0.56
|
0.036
|
13.9
|
0.83
|
BRG11-219
|
6.0
|
69.0
|
63.0
|
0.56
|
0.070
|
60.5
|
1.44
|
BRG11-221
|
15.0
|
350.2
|
332.2
|
0.46
|
0.039
|
5.6
|
0.65
|
including
|
15.0
|
132.0
|
114.0
|
0.58
|
0.025
|
5.4
|
0.72
|
BRG11-223
|
27.0
|
178.3
|
151.3
|
0.50
|
0.017
|
4.8
|
0.61
|
BRG11-228
|
33.0
|
294.6
|
261.6
|
0.35
|
0.035
|
5.3
|
0.52
|
BRG-11-229
|
15.5
|
325.4
|
309.9
|
0.46
|
0.016
|
4.6
|
0.56
|
including
|
15.5
|
191.5
|
176.0
|
0.63
|
0.020
|
4.8
|
0.75
|
*Cu Eq. (copper
equivalent) has been used to express the combined value of copper,
molybdenum, and silver as a percentage of copper, and is provided
for illustrative purposes only. No allowances have been made
for recovery losses that may occur should mining eventually
result. Calculations use metal prices of US $3/lb copper, $22
silver, and $10/lb molybdenum using the formula Cu Eq.% = Cu% +
(Mo% x 3.33) + (Ag g/t x 0.0107).
|
Details of the Berg Project
The Berg property sits immediately northwest of Imperial Metals'
Huckleberry Mine and the Ootsa property sits immediately to the
southeast. The Berg and Ootsa properties are adjoining on the
west side and combined they cover the majority of the
Seel-Huckleberry-Berg porphyry trend, having a total combined area
of 120,155 hectares. Mineralization at the Berg deposit forms
an annular shape around a broadly cylindrical, multi-phase
intrusive stock known as the Berg Stock. The historic resources
comprise two highly fractured mineralized zones in the northeast
and southern portions of the annulus. Hypogene mineralization is
characterized by several generations of veining, and a
well-developed supergene enrichment blanket is superimposed on the
hypogene mineralization.
A total of 53,754 metres over 215 holes have been completed on
the deposit by prior operators including Kennecott, Placer Dome,
Terrane Metals, and Thompson Creek Metals. Drilling in most areas
of the Berg deposit remains wide-spaced and mineralization is open
to depth and outward from the Berg Stock. The deposit has been
shown to have excellent vertical continuity with significant
mineralization intersected greater than 550m below surface.
Numerous metallurgical test programs have been conducted on
mineralization at Berg, with a focus on developing a flowsheet to
produce copper and molybdenum concentrates from both supergene and
hypogene composite samples. Historical work has demonstrated that
conventional flotation processes, comprised of primary grinding,
rougher flotation, bulk rougher concentrate regrind, and three
stage bulk cleaner flotation followed by conventional copper and
molybdenum separation, can be used to produce marketable copper and
molybdenum concentrates.
Historical Resource for The Berg
Deposit(1)
Category
|
M.
Tonnes
|
Cu
%
|
Mo
%
|
Ag
g/t
|
Cu Eq
(2)
|
Cu (M.
lbs)
|
Mo (M.
lbs)
|
Ag (M.
oz)
|
Cu Eq
(M. lbs)(2)
|
Measured
|
176
|
0.358
|
0.034
|
3.02
|
0.50
|
1,390.6
|
131.8
|
17.15
|
2,013
|
Indicated
|
220
|
0.270
|
0.033
|
3.08
|
0.41
|
1,310.9
|
161.2
|
21.80
|
2,081
|
Measured &
Indicated
|
397
|
0.309
|
0.034
|
3.05
|
0.45
|
2,701.5
|
293.0
|
38.95
|
4,094
|
Inferred
|
14
|
0.256
|
0.017
|
4.39
|
0.36
|
79.0
|
5.3
|
1.97
|
118
|
During 2021 the Company anticipates a significant drill program
to confirm and expand the Berg deposit, focusing on better defining
the high-grade portions of the system. Planned work will include
additional metallurgical testing including on the potential
recovery of rhenium, and upgrading existing infrastructure to allow
for year-round exploration. The Company will also evaluate possible
transportation corridors to Ootsa, and conduct regional work
focused on testing high-potential exploration targets within the
large land package.
Details of the Option Agreement
Under the terms of the Option Agreement, Surge will issue to
Centerra C$4 million in Surge common
shares, or 6,825,939 shares based on the 10-day volume weighted
average price of C$0.586. In
addition, on each of the five anniversaries after the date of the
Option Agreement, a further C$0.2
million in Surge shares will be issued to Centerra based on
the 10-day volume weighted average price at the time of issuance or
such higher price as may be required by the policies of the TSX
Venture Exchange ("TSXV"). The total of all share payments will
equal $5 million.
During the five year option period, Surge must incur
C$8 million in project related
expenditures, with an initial C$2
million of spending commitment over the next 24 months
(C$1 million of which is a firm
commitment).
Surge has the option to accelerate any expenditures (or make
cash payments to Centerra in lieu of incurring project related
expenditures) and the share issuances, and therefore can accelerate
the earn-in.
After the above commitments are met by Surge, the option will be
deemed to have been exercised by Surge, and a 70%:30% joint venture
will be formed at that time, with both parties entering into a
joint venture agreement.
The Option Agreement includes additional terms which are
customary for a transaction of this nature. Following the formation
of the joint venture, dilution below 10% will result in a deemed
surrender of a participating interest in the joint venture, and
conversion of such interest to a 1.0% net smelter returns royalty.
The royalty payer may at any time thereafter elect to
purchase half of the royalty for C$5
million. Closing of the transaction is subject to TSXV
approval.
Blake, Cassels & Graydon LLP acted as legal counsel for the
Company and Peterson McVicar LLP acted as legal counsel for
Centerra with respect to the Option Agreement.
Dr. Shane Ebert P.Geo., Chief
Executive Officer of Surge and a Qualified Person as defined by
National Instrument 43-101, has approved the scientific and
technical disclosure contained in this news release.
About Surge Copper Corp.
The Company owns a
100% interest in the Ootsa Property, an advanced stage exploration
project containing the East Seel, West Seel and Ox porphyry
deposits located adjacent to the open pit Huckleberry Copper Mine,
owned by Imperial Metals. The Ootsa Property contains pit
constrained NI 43-101 compliant resources of copper, gold,
molybdenum and silver in the Measured and Indicated categories.
There are 2 drills working at the project with drilling focused on
defining the extent of the large West Seel deposit and testing new
targets along the Seel Trend.
ON BEHALF OF THE BOARD OF DIRECTORS
"Shane Ebert"
President and Chief Executive Officer
For Further information, please contact:
Riley Trimble, Corporate
Communications
Telephone: 604-416-2978
info@surgecopper.com
http://www.surgecopper.com
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This News Release contains forward-looking statements, which
relate to future events. In some cases, you can identify
forward-looking statements by terminology such as "will", "may",
"should", "expects", "plans", or "anticipates" or the negative of
these terms or other comparable terminology. All statements
included herein, other than statements of historical fact, are
forward looking statements, including but not limited to the
Company's plans regarding the Berg Property and the Ootsa
Property. These statements are only predictions and involve
known and unknown risks, uncertainties and other factors that may
cause the Company's actual results, level of activity, performance
or achievements to be materially different from any future results,
levels of activity, performance, or achievements expressed or
implied by these forward-looking-statements. Such uncertainties and
risks may include, among others, actual results of the Company's
exploration activities being different than those expected by
management, delays in obtaining or failure to obtain required
government or other regulatory approvals or financing, inability to
procure equipment and supplies in sufficient quantities and on a
timely basis, equipment breakdown and bad
weather. While these forward-looking statements,
and any assumptions upon which they are based, are made in good
faith and reflect the Company's current judgment regarding the
direction of its business, actual results will almost always vary,
sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggestions herein. Except
as required by applicable law, the Company does not intend to
update any forward-looking statements to conform these statements
to actual results.
____________________________________________
1) This resource estimate for the Berg Deposit was
prepared in accordance with NI 43-101 standards and is considered
by Surge management to have a high degree of reliability, however,
the resource has not been verified by Surge and is considered
historical in nature. A qualified person representing Surge
has not done sufficient work to classify the historical estimate as
a current mineral resource or reserve and Surge is not treating it
as a current mineral resource or reserve. This resource was
estimated for Thompson Creek Metals Company Inc. in a 2018
Technical Report titled "Updated Technical Report and Mineral
Resource Estimate on the Berg Project, British Columbia" by James Barr and John
Huang of Tetra Tech Inc. The estimate is based on 201 drill
holes and 51,622 metres of drilling and used ordinary Kriging
interpolation constrained by an open pit using a 0.25% Cu Eq cut
off.
2) Copper equivalent calculated by Surge management using
long term consensus metal prices of US $3/lb Cu, $22 oz
Ag, $10 lb Mo, and assumes 100%
recovery with no provision for treatment or refining costs.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/surge-copper-signs-option-agreement-to-acquire-a-70-interest-in-the-berg-copper-project-from-centerra-gold-inc-301193621.html
SOURCE Surge Copper Corp.