Under the terms of the 5 year Option Agreement, Surge issued to Centerra C$4 million in Surge common shares (6,825,939 shares, about 5.5% ownership in Surge) upon TSX approval. 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 bringing the total of all share payments equivalent to C$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 before December 2022.
After the above commitments are met by Surge, the option will be deemed to have been exercised, and a 70%:30% joint venture will be formed and a formal joint venture agreement established. Dilution of either party below 10% interest will result in their interest converting to a 1.0% net smelter returns royalty, half of which can be bought back by the other party for C$5 million.
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.
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).
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 |
1This 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.
2Copper 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.
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.
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.