Surge Copper Signs Option Agreement to Acquire a 70% Interest IN the Berg Copper Project from Centerra GOLD Inc.
Berg Option
S U R G E
C O P P E R C O R P
PO Box 10351 888 - 700 West Georgia Street Vancouver, BC, V7Y 1G5
TSX-V Trading Symbol: SURG
Email: [email protected]
Telephone: (604) 718-5454
www.surgecopper.com
December 15, 2020
NEWS RELEASE
SURGE COPPER SIGNS OPTION AGREEMENT TO ACQUIRE A 70% INTEREST IN THE BERG
COPPER PROJECT FROM CENTERRA GOLD INC.
December 15, 2020, Vancouver, British Columbia – 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
category1. A qualified person has not done sufficient work to classify the historical
Berg Option
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
Berg Option
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.
Map of the Huckleberry Mining District showing the Berg claims optioned from Centerra Gold
and Surge Copper’s 100% owned Ootsa property.
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
Berg Option
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
Horizonal section through the Berg Deposit at 1475 meters above see level showing copper
equivalent grade. Source 2018 Technical Report by Tetra Tech for Thompson Creek Metals.
Berg Option
Vertical section 3500 E, looking East, through the Berg deposit showing copper equivalent
grades. Source 2018 Technical Report by Tetra Tech for Thompson Creek Metals.
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.
Berg Option
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
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
Berg Option
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.