Mr. Tim Fernback
SURGE EXPLORATION ANNOUNCES SPIN-OUT COMPANY AND PLAN OF ARRANGEMENT
Surge Exploration Inc.'s 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, into a newly incorporated subsidiary CuGold Corp. 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 pursuant to the
Business Corporations Act
(British Columbia). Under the terms of the spinout, 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
to be issued to each Surge shareholder under the spinout has not yet been determined. There will be no change in shareholders' holdings in Surge as a result of the spinout.
In connection with the spinout, the company intends to complete a non-brokered private placement into CuGold for a maximum of
15 million units
at a price of
five cents per unit
for gross proceeds of
$750,000. Each unit comprises 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 five cents per share, for a period of two years from closing.
Finders' fees will be paid in connection with the private placement and all finders' fees payable are subject to exchange approval.
The net proceeds of the financing will be used to finance, 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 spinout will be subject to the approval of Surge's shareholders which Surge intends to seek at a special meeting of shareholders. The date for the shareholders meeting has not yet been determined. The plan of arrangement is subject to TSX Venture Exchange approval and the spinout 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 spinout, 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 spinout are still be to be determined and there is no certainty that the spinout will be completed on the terms currently proposed or at all.
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.
Mineral Mountain property (copper, gold); British Columbia
As announced on Nov. 28, 2018, Surge has acquired a 100-per-cent interest in
nine claim blocks
comprising 19,665 hectares (197 square kilometres)
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 indicate 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 1940s 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; and the Lorraine property (Lorraine Copper Corp.), host to a large copper/gold National Instrument 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-per-cent interest
in seven mineral tenure covering 2,418 hectares (5,972 acres) located
approximately 80 km northeast of the town of Quesnel, B.C., and 20 km north of the historic gold mining towns of Wells and Barkerville.
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