Resources

2022 Resource Estimate 

This updated MRE is based on a drill hole database comprising approximately 152,000 metres of diamond drilling, including approximately 50,000 metres drilled since 2018. The MRE combines multiple mineralized zones at the Seel deposit area into a single pit constrained volume and demonstrates both the overall size of the mineral endowment at Ootsa, as well as the presence of near-surface, higher-grade subsets of the resource which could be evaluated in future studies as potential starter pits.

Highlights

• Combined Total: pit-constrained resources of 439 Mt grading 0.32% copper equivalent^* (“CuEq”) in the combined Measured and Indicated categories (“M+I”), representing a 96% increase in M+I resources compared to the previous 2016 estimate, plus an additional 138 Mt grading 0.28% CuEq in the Inferred category (“Inf.”), comprised of:
  • Seel Deposit: 380 Mt grading 0.32% CuEq M+I plus an additional 135 Mt grading 0.28% CuEq Inf.
  • Ox Deposit: 59 Mt grading 0.32% CuEq M+I
• Total contained metal in the M+I categories of 1.7 Blbs Cu, 167 Mlbs Mo, 1.6 Moz Au, and 30 Moz Ag
• With the nearby Berg deposit, which hosts 610 Mt of M+I resources, this new resource at Ootsa brings Surge’s total M+I inventory to over 1 billion tonnes, with total contained metal across the two projects of 5.3 Blbs Cu, 586 Mlbs Mo, 1.6 Moz Au, and 89 Moz Ag

* See Note 4 in Table 1.

Table 1: Ootsa Mineral Resource Estimate by Classification at Base Case NSR Cut-off of C$8.27/t

Notes:

1. Economic viability can only be assessed through the completion of engineering studies defining reserves including PFS and FS. Resource classification adheres to CIM Definition Standards; it cannot be assumed that all or any part of Inferred Mineral Resources will be upgraded to Indicated or Measured as a result of continued exploration.
2. A C$8.27 per tonne NSR cut-off value was used as the base case for reporting mineral resources that have reasonable prospects for eventual economic extraction. The NSR cut-off was derived from US$ metal prices of US$3.85/lb Cu, US$12.40/lb Mo, US$1,750/oz Au, and US$22.00/oz Ag, and a USDCAD exchange rate of 0.77. Process recoveries used were 90% Cu, 70% Au, 70% Mo, and 65% Ag with respective smelter payables of 96%, 90%, 98.5%, and 96%. Refining charges in US$ were US$0.05/lb Cu, US$5/oz Au, and US$0.50/oz Ag. A generated pit shell using Whittle (3DS Geovia) was used to report resources. The generation of the pit shell considered 45-degree slope angles, C$ operating costs of C$2.34/t for mining and C$8.11/t for processing, G&A, and ore mining premium with a 2% ore dilution rate.
3. Grades were estimated using ordinary kriging using capped assays composited to two-metre intervals, with estimation block sizes of 12x12x12 for both Seel and Ox.
4. Copper equivalent assumes metal prices of US$3.85/lb Cu, US$12.40/lb Mo, US$1,750/oz Au, and US$22.00/oz Ag and uses the formula CuEq (%) = Cu (%) + 3.2208 x Mo (%) + 0.6630 x Au (g/t) + 0.0083 x Ag (g/t).
5. The total waste tonnes within the Seel constraining pit are 1,443.4 Mt implying a strip ratio of 2.8 : 1, and the total waste tonnes within the Ox constraining pit are 65.6 Mt implying a strip ratio of 1.1 : 1.
6. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
7. The Qualified Person for the Mineral Resource Estimate is James N. Gray, P.Geo, of Advantage Geoservices Ltd.
8. All figures are rounded to reflect the relative accuracy of the estimate.
9. The effective date of the mineral resource estimate is February 18, 2022.

Resource Estimation Methodology & Parameters

Resource estimation was performed by James Gray of Advantage Geoservices Ltd., an independent Qualified Person as defined by National Instrument 43-101. Data from 300 core holes at Seel and 133 at Ox was used for estimation using Geovia GEMS software. Control for grade estimation in both deposits is based on three directional domains and a 0.1% CuEq mineralized domain. Mineralized versus background material was separated using an indicator (0.1% CuEq) estimation method. Grades were subsequently estimated by ordinary kriging inside and outside that mineralized zone. Copper, molybdenum, gold, and silver grades were estimated using capped assays composited to two-metre intervals. The estimation block size was 12x12x12 metres for both deposits. Average rock densities of 2.74 t/m³ and 2.70 t/m³ were applied to Seel and Ox, respectively, based on 4,081 measurements from Seel and 1,054 measurements from Ox. Overburden was assigned a density of 2.0 t/m³.

Blocks were classified based on spatial parameters related to available drill data as well as on the generation of an optimized pit. At both deposits, Measured resource blocks have a maximum nominal drill spacing of 40m and the third closest hole is within 60m of the block. Indicated blocks have a maximum drill spacing of 80m. Inferred blocks are the remainder estimated within the pit volume. The resource was constrained by a Whittle generated (3DS Geovia) pit for which the optimization parameters used are included in Note 2 of Table 1. Including 2% dilution the resource NSR cut-off is C$8.27/t.