VANCOUVER, Jan. 11, 2019 /CNW/ - Surge Exploration Inc. (the
"Company" or "Surge") (TSX‐V: SUR) (OTCQB: SURJF) (FRA: DJ5C) is
pleased to announce that its Board of Directors has approved, in
principle, a strategic reorganization of the Company's assets
pursuant to which the Company would spin off its interests in the
"Hedge Hog" and "Mineral Mountain" exploration projects, both
copper/gold projects in British
Columbia (the "Exploration Projects") into a newly
incorporated subsidiary CuGold Corp. ("CuGold"). Surge will
continue to hold its interest in its cobalt projects in both
Chile and Ontario, as well as, its lithium brine project
in Chile.
It is proposed that the transaction will be carried out by way
of statutory plan of arrangement (the "Spin-Out") pursuant
to the Business Corporations Act (British Columbia). Under the terms of the
Spin-Out, shareholders of Surge would exchange their existing
common shares of Surge for the same number of new common shares of
Surge (having the identical terms of the existing Surge common
shares) and common shares of CuGold. The number of common shares of
CuGold to be issued to each Surge shareholder under the Spin-Out
has not yet been determined. There will be no change in
shareholders' holdings in Surge as a result of the Spin-Out.
In connection with the Spin-Out, the Company intends to complete
a non-brokered private placement (the "Financing") into
CuGold for a maximum of 15,000,000 Units at a price of
CAD$0.05 per
Unit for gross proceeds of CAD$750,000. Each Unit is comprised of one
common share of the Company and one share purchase warrant. Each
whole warrant will entitle the holder thereof to purchase one
additional common share of the Company at an exercise price of
CAD$0.05 per share, for a period of
two years from closing.
Finder's fees will be paid in connection with the private
placement and all finder's fee payable are subject to Exchange
approval.
The net proceeds of the Financing will be used to fund, among
other things, the working capital of CuGold, the negotiation of
potential joint venture opportunities with respect to the
Exploration Projects and potential future acquisitions.
The proposed Spin-Out will be subject to the approval of Surge's
shareholders which Surge intends to seek at a special meeting of
shareholders (the "Shareholders' Meeting"). The date for the
Shareholders Meeting has not yet been determined. The Plan of
Arrangement is subject to TSX Venture Exchange ("Exchange")
approval and the Spin-Out also requires the approval of the British
Columbia Supreme Court.
The Company intends to seek a listing of the CuGold common
shares on the CSE but no assurance can be provided that such a
listing will be obtained. Any such listing will be subject to
CuGold fulfilling all of the requirements of the applicable stock
exchange.
Further details of the Spin-Out, including the date for the
Shareholders' Meeting and the number of CuGold common shares to be
granted to shareholders of Surge will be announced in the near
future. Shareholders are cautioned that the final details of the
Spin-Out are still be to be determined and there is no certainty
that the Spin-Out will be completed on the terms currently proposed
or at all.
About Surge Exploration Inc.
The Company is a Canadian-based mineral exploration company
which has been active in the resource sector in British Columbia and elsewhere in Canada. The Company has an exploration office
in Santiago, Chile to review
mineral exploration opportunities in Chile and elsewhere in South America.
Atacama Cobalto Project (Cobalt):
The Atacama Cobalto Project is located in the Atacama Province
in northern Chile, 15 km northwest
of the town of Copiapó, where mining is the largest economic
activity, and the mining industry is one of the region's major
employers. The Atacama Cobalto Project consists of 1,059 hectares
and is located only 3 km East of the Cerro Iman Mine. To date, CAP
Minería has drilled over 20,250 m on
the Atacama Coblato Project.
The area of interest hosts several other mining companies and is
situated near the mylonitic corridor that is part of the Atacama
Fault System that hosts many of the IOCG deposits in northern
Chile. The Atacama Cobalto Project
corresponds to a "cobalt anomalous IOCG" associated with the
geographic area.
The Atacama Cobalto Project benefits from access to excellent
infrastructure, including port access, energy supply, and access
through the Pan American Highway.
Ontario Cobalt Properties (Cobalt):
The Company has an option to earn an undivided 60% interest in
the Glencore Bucke Property and the Teledyne Property, located in
Cobalt, Ontario Canada.
Incahuasi Lithium Project (Lithium Brine):
The property is located on the northernmost section of the
Incahuasi salar, 75 km southeast from both the town of Tilomonte,
Chile and the Salar de Atacama,
where mining is the largest economic activity, and the mining
industry is one of the region's major employers. The Incahuasi
salar is located on the national border between Chile and Argentina at an elevation of 3,260 m. The Incahuasi Lithium Project
consists of 10 mineral exploration concessions totalling 2,300
hectares. Bordering this property, in Argentina, is a 9,843 hectare lithium
exploration property held by Advantage Lithium. The option on this
project is subject to TSX-V approval.
Mineral Mountain Property (Copper, Gold)
British Columbia
As announced on November 28, 2018,
Surge has acquired a 100% interest in 9 claim blocks comprising
19,665 hectares (197 sq km) in the Omineca region of north-central
British Columbia, approximately
150 km north of Fort St. James.
The claims are not subject to any royalty terms, back-in rights,
payments or any other agreements and encumbrances. The region is
host to numerous operating mines, good infrastructure including
experienced exploration and supporting services.
B.C. Minfile assessment report data indicates that most of the
area covered by the Omineca Group claim blocks were at one time or
another covered by staking during surges of exploration in B.C.
dating from the 1940's to present day. Prominent among early
discoveries in the Omineca region were the nearby Lustdust/Stardust
property (Sun Metals Corp.) covering a large, coherent integrated
porphyry-skarn, epithermal system; the Kwanika property (Serengeti
Resources Inc./POSCO Daewoo) a promising advanced stage copper-gold
project; the Lorraine property (Lorraine Copper Corp.) host to a
large copper/gold NI 43-101 compliant resource. The tenures are
located between the Kemess North project being developed by
Centerra Gold's subsidiary Aurico Metals and Centerra Gold's
operation Mt Milligan mine.
Hedge Hog Property, (Copper, Gold) British Columbia
The Company has an option to earn an undivided 60% interest
seven mineral tenure covering 2,418 hectares (5,972 acres) located
approximately 80 km northeast of the town of Quesnel, BC and 20 km north of the historic
gold mining towns of Wells and Barkerville.
On Behalf of the Board of Directors
"Tim
Fernback"
Tim Fernback
President & CEO
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 may contain
forward‐looking statements which include, but are not limited to,
comments that involve future events and conditions, which are
subject to various risks and uncertainties. Except for statements
of historical facts, comments that address resource potential,
upcoming work programs, geological interpretations, receipt and
security of mineral property titles, availability of funds, and
others are forward‐looking. Forward‐looking statements are not
guarantees of future performance and actual results may vary
materially from those statements. General business conditions are
factors that could cause actual results to vary materially from
forward‐looking statements.
SOURCE Surge Exploration Inc.