Developing World-Class Lithium and Cobalt Properties in Canada and Chile
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Surge Exploration Inc. (TSXV:SUR, OTCQB:SURJF, FRA:DJ5C) is a Canadian energy metal exploration company with projects located in the mining-friendly jurisdictions of Canada and Chile. The company is focused on acquiring world-class properties with the potential to produce commercial-grade cobalt and lithium for buyers around the world. To this effect, Surge has acquired two cobalt properties in Ontario and a copper-gold property in British Columbia, Canada. The company is also in the process of acquiring a cobalt property in Atacama, Chile.
Surge’s focus on cobalt and lithium is tied to the rising demand for lithium-ion batteries for use in smartphones, laptops, and electric vehicles (EV). Many governments around the globe are also using policy to eliminate or reduce the need for internal combustion engines in their countries, and increasing requirements for the production of electric vehicles. For example, by 2030 Germany plans to eliminate the use of gas and fossil fuel powered vehicles, while countries such as India and Norway are committing to selling only EVs and hybrids in the same time frame. Companies such as Tesla and Panasonic have dedicated millions of square feet to creating gigafactories that will be used to produce the required batteries.
Surge’s two Ontario cobalt projects, Teledyne and Glencore Bucke, are adjacent to one another and share similar geological structures. They are also located within proximity to the historic and past-producing Agaunico cobalt mine. The mine reportedly produced a total of 4.35 million pounds of cobalt and 980,000 ounces of silver between 1905 and 1961.
The Teledyne and Glencore Bucke properties both have historic resources. The Teledyne property has an inferred resource of 60,000 tons and a probable reserve of 40,000 tons with an average grade of 0.45 percent cobalt and 0.6 oz/T silver and Glencore Bucke has an inferred resource of 60,000 tons and a probable reserve of 15,000 tons with an average grade of 0.45 percent cobalt and 3.0 oz/T silver. Surge is working on releasing an updated NI 43-101 compliant resource for both properties.
Surge owns two additional copper-gold properties in BC: Hedge Hog and Mineral Mountain. The Hedge Hog property has seen extensive historical exploration which included a grab sample that assayed 1.51 g/t gold, 1.37 percent zinc, 0.48 percent lead, 1.20 ppm lead and 1,313 ppm antimony pulled. The company’s Mineral Mountain property has seen off and on exploration since the 1940s, but remains largely unexplored. Surge intends to conduct an extensive two-phase exploration program on the property to follow up on gold anomalies found by previous operators.
Finally, Surge acquired a cobalt project in Atacama, Chile from Compania Minera del Pacifico SA (CAP Mineria), where CAP Mineria has drilled over 20,250 meters (66,437 feet) on the property to date. Surge has recently acquired the Incahuasi lithium project in Chile, which is approximately 75 kilometers southeast of the famed Atacama salar, the world’s largest source of lithium, and Mineral Mountain copper-gold project in British Columbia, which holds a lot of exploration potential for the company.
Surge’s Board of Directors benefits from the experience of Tim Fernback. Fernback has a wealth of experience in the financial sector and has been responsible for over 50 IPOs and over 100 reverse-mergers, as investment banker and venture capitalist.
- Operating in the mining friendly jurisdictions of Chile and the provinces of British Columbia and Ontario, Canada
- Ontario properties are in proximity to the past-producing Agaunico cobalt mine.
- Nearby Agaunico cobalt mine reportedly produced a total of 4.35 million pounds of cobalt and 980,000 ounces of silver between 1905 and 1961.
- Glencore Bucke has a historical inferred resource of 60,000 tons and a probable reserve of 15,000 tons with an average grade of 0.45 percent cobalt and 3.0 oz/T silver.
- Teledyne property has a historical inferred resource of 60,000 tons and a probable reserve of 40,000 tons with an average grade of 0.45 percent cobalt and 0.6 oz/T silver.
- Developing updated NI 43-101 resources for Teledyne and Glencore Bucke projects.
- Over 20,250 meters (66,437 feet) have been drilled on the Atacama, Chile property.
- Extensive historical exploration at the Hedge Hog property in BC.
- Historic Hedge Hog grab sample graded 1.51 g/t gold, 1.37 percent zinc, 0.48 percent lead, 1.20 ppm lead and 1,313 ppm antimony.
- Exploration potential at Incahuasi lithium project in Chile and Mineral Mountain copper-gold project in British Columbia.
- Significant shareholders include Wellington Shields & Co., a registered NYC-based broker/dealer, investment banker and long-time member of the New York Stock Exchange.
Ontario Cobalt Projects
Surge has two cobalt properties in Ontario: the Glencore Bucke cobalt property and the Teledyne cobalt property. In May 2018, Surge entered into an option agreement with LiCo Energy Metals Inc (TSXV:LIC) to earn a 60 percent interest in both properties. Both are subjected to a back-in joint venture provision with Glencore, a production royalty with New Found Gold Corp. and Glencore. The Glencore Bucke property consists of 16.2 hectares and is adjacent to Surge’s Teledyne cobalt project. Meanwhile, the Teledyne property consists of five patented and eight unpatented mining claims that cover an area of approximately 607.1 hectares.
The properties are located approximately six kilometers east-northeast of the town of Cobalt, Ontario and are accessible by Highway 567 and a municipal road that crosses the Glencore Bucke property.
The properties are also on strike with the past-producing Agaunico cobalt mine. Between 1905 and 1961, the Agaunico mine produced a total of 4.35 million pounds of cobalt and 980,000 ounces of silver. Most of the cobalt that was produced at the mine was located along structures that extend southward into the northern boundary of Teledyne property. From 1951 to 1957, the average content of cobalt found within the ore was approximately 0.5 percent. In 1955 alone, the mine processed 62,000 tonnes of ore and 526,000 pounds of cobalt, 146,000 ounces of silver, 117,000 pounds of nickel and 81,000 pounds of copper were extracted from the ore.
Historic exploration at Teledyne
In 1953, Big Agaunico Mines Ltd. conducted a drill program to locate the extension of the Agaunico cobalt-rich Vein 15. The program was able to confirm the extension when results showed two intersections south of the northern 372 claim border with grades of 0.58 percent cobalt over five feet and 0.46 percent over three feet.
In 1979, Teledyne Canada Ltd. completed six surface drill holes and encountered a cobalt mineralized zone that extended 640 feet south from the claim boundary. Soon after, Teledyne constructed a 10-foot by 13-foot decline that went approximately 2,300 feet to further explore the mineralized zone found the year before. A total of 6,167 feet of underground drilling was completed and confirmed the extension of the Agaunico cobalt zone for a strike length of 500 feet. There was an additional mineralized zone discovered with a strike length of 450 feet and sampling results included: 0.64 percent cobalt over 55.3 feet, 0.74 percent cobalt over 28.6 feet and 2.59 percent cobalt over 8 feet.
The property also holds a historical inferred resource of 60,000 tons and a probable reserve of 40,000 tons with an average grade of 0.45 percent cobalt and 0.6 oz/T silver.
In the fall of 2017, an exploration program was completed and 2,204 meters were drilled on the property. The program was conducted with the intent to confirm and extend the existing mineralization along strike and up and down dip and covered the strike length for approximately 220 meters. Highlights from the drill program include results of 3.92 percent cobalt over 0.75 meters, 2.32 percent cobalt over four meters and 1.70 percent over six meters. All samples were pulled from a depth between 100 and 200 meters.
Historic exploration at Glencore Bucke
In 1981, Teledyne leased the Glencore Bucke property to Falconbridge Nickel Mines Ltd., which was later purchased by Glencore Canada. Teledyne completed a total of 10,903 feet of drilling on the property and delineated two mineralized zones that measured 500 feet and 200 feet respectively. Based on the drilling done by Teledyne, the property hosts a historical inferred resource of 60,000 tons and a probable reserve of 15,000 tons with an average grade of 0.45 percent cobalt and 3.0 ounce per ton silver.
In August 2017, a total of 1,913.50 meters were drilled on the property as part of an exploration program designed to confirm and extend existing mineralized zones. The program covered the Main zone for a strike length of approximately 55 meters and the Northwest zone for a strike length of approximately 45 meters. Significant intersections include 4.45 percent cobalt and 34.2 ppm silver over 0.30 meters and 8.42 percent cobalt and 136 ppm silver over 0.30 meters.
Significant copper-lead-zinc mineralization were also discovered. The zones need further exploration in order to determine their possible economic potential. Significant intersections include 0.90 percent copper, 0.26 percent zinc and 0.47 percent lead over 20.20 meters and an intersect of 1.25 percent copper, 0.04 percent zinc and 0.05 percent lead over 6.10 meters.
Surge has developed an exploration work program for their Glencore Bucke project which includes geological mapping and prospecting to further establish the prospectivity of the location. The company is also developing a two-phase drill program that will total approximately 4,000 meters along the strike at the Northwest and Main zones as well as testing any additional targets generated from surface mapping and prospecting. Finally, Surge hopes to release an updated NI 43-101 compliant resource for the property.
Surge has also developed a work program for their Teledyne property that includes geological mapping, prospecting and mechanized stripping to further establish the prospectivity of the location. The program will be compiling and evaluating historical results and exploration to generate exploration targets on the property. The company has planned a two-phase drilling program of 1,500 meters that will focus on extending the known mineralized zones and will follow up on new targets identified in the surface exploration program. Surge is working towards releasing an updated NI 43-101 compliant resource on the Teledyne property as well.
Chile Copper-Cobalt Property
In November 2018, Surge entered into a definitive agreement with Compania Minera del Pacifico SA for an option to acquire up to 100 percent interest in the Atacama Cobalto project in Chile. Surge will acquire the property in three phases where a certain amount of work and money spent must be implemented on the project to gain full ownership.
The Atacama Cobalto project consists of 1,059 hectares and is located approximately three kilometers east of the Cerro Iman Mine. The property is accessible by the Pan American Highway and has access to nearby ports and energy supplies. The project is in proximity to the mylonitic corridor, which is part of the Atacama fault system that hosts many IOCG deposits in northern Chile. CAP Mineria has drilled over 20,250 meters (66,437 feet) on the property to date.
Incahuasi Lithium Property
In October 2018, Surge signed a non-binding MOU with Miguel Angel Perez Vargas to acquire up to a 100 percent interest in the 2,300-hectare Incahuasi lithium project in the Antofagasta mining region in northern Chile. The Incahuasi salar straddles the Chilean-Argentinian border and is approximately 75 kilometers southeast of the famed Atacama salar in Chile, which is the world’s largest source of lithium.
Surge intends to complete a geophysical survey and a drill program within the next two years. The company also intends to complete a preliminary resource definition program within the next year.
Hedge Hog Copper-Gold Project
In November 2017, Surge entered into a property option agreement with Eastfield Resources Ltd. (TSXV:ETF) to earn a 60 percent undivided interest in seven mineral tenures known as the Hedge Hog property. The Hedge Hog property covers 2,418 hectares and is located approximately 80 kilometers northeast of Quesnel, British Columbia and 20 kilometers north of the historic mining towns of Wells and Barkerville, British Columbia.
The property is accessible by Highway 26 and by service roads. The property can access a power line that services local residents and the Bowron Lake Provincial Park and extends along the Bowron Lake road.
During the 1980s and 1990s, there was a rush of exploration in the Wells-Bakerville area due to discoveries found at the Chu Chua deposit north of Kamloops and the Kudz Ze Kayah, Wolverine and Fyre deposits in the Yukon Territory. The area boasts well-known placer gold deposits which have an approximate four-million-ounce historic production rate and an approximate 1.2-million-ounce historic production from historic lode gold deposits. However, the first recorded exploration around the Hedge Hog claims occurred in 1984 and 1985 by Ben Gunsen.
In 1998, volcanic massive sulfide was uncovered by prospectors in a roadside ditch approximately 800 meters southwest of Lottie Lake. Samples were taken and a float was conducted on the material. The sulfide boulder graded 24.3 percent copper and 19.6 g/t silver.
In 1999, Eureka Resources acquired the Lottie project from the prospector and the company conducted a series of soil and till geochemistry sampling, ground electromagnetic and magnetic surveying and backhoe trenching where the float samples were taken from. The test pitting revealed angular blocks of chalcopyrite rich massive sulfide, but the source of the minerals was not found.
In 2000, Hudson Bay Exploration and Development optioned the property from Eureka and conducted bedrock and surficial till mapping, soil, and moss mat geochemistry, trenching, ground geophysics and a four-drill hole (556 metre) program before relinquishing the option in 2001. Hudson Bay also tested several samples of the chalcopyrite rich massive sulfide material recovered by Eureka and averaged a grade of 8.7 percent copper, 9.59 g/t silver and 145 ppb gold.
In 2001, Eureka identified EM conductors two km south of the Lottie copper float area and completed two diamond drill holes (129 meters) and concluded that the the conductors were the result of graphitic sediments.
In 2013, Eastfield acquired the mineral tenures for this area and implemented a rock and stream sediment sampling program. Altered rhyolite was identified in several float samples and returned two samples that graded 0.93 percent and 0.34 percent copper respectively. Approximately eight kilometers north of Lottie Lake, an outcrop of altered sheared rhyolite was identified and sampled. A grab sample from this area assayed 1.51 g/t gold, 1.37 percent zinc, 0.48 percent lead, 1.20 ppm lead and 1,313 ppm antimony. The Golden Sky Claim was subsequently staked and is now part of the Hedge Hog property.
In 2014, stream sediment sampling and 6.6 kilometers of soil sampling was conducted at Lottie and 7.4 line kilometers of sampling at the Golden Sky. An additional 4.7 line kilometers of reconnaissance induced polarization and resistivity surveying was also done at Lottie Lake, where a broad chargeability high was defined by the induced polarization survey near the Lottie float. A quartz pyrite argillite float was sampled and returned an analysis of 797.1 ppb gold and 550.5 ppm arsenic.
In 2015, further reconnaissance prospecting and mechanical test pitting and trenching was completed by Eastfield. Forty-two of the pits encountered bedrock, while five did not. A sample of silicic rock was sent for petrographic analysis. The results displayed that it was a brecciated latite and confirmed the presence of volcanic and sub-volcanic rocks in the vicinity of the massive sulfide boulder field. Further prospecting west of Lottie Lake located a silicified outcropping of pyritized altered argillite south of the placer gold mine located in the area.
Mineral Mountain Copper-Gold Project
In November 2018, Surge acquired a 100 percent interest in nine mineral claims comprised of 19,665 hectares in north-central British Columbia. The region hosts numerous operating mines and good infrastructure, including experienced exploration and support systems. The property is located approximately 150 kilometers north of Fort St. James.
The property has records that date back to the 1940s and has seen off and on exploration. However, the property remains largely unexplored. There are records of stream sediment sampling being conducted on several of the claims and results show that there are anomalous gold zones on the property.
Surge is planning a two-phase exploration program for the property. Phase One will include reconnaissance prospecting, geological mapping and a heavy metal concentrate sampling survey on relevant drainages within the claim blocks. Phase Two will follow up on findings from the Phase One and will focus on exploring higher elevations on the property. Depending on Phase One exploration, the second program could include additional soil sampling, geophysics and trenching.
Tim Fernback, MBA, CPA, CMA — President, CEO and Director
Tim has held multiple senior executive positions, including with the Investment Banking and Corporate Finance Divisions at Wolverton Securities. He was responsible for due diligence reviews on corporate clients and investment banking business development relationships. He also planned and opened 3 regional offices in western Canada, and reviewed and analyzed over 300 corporate clients, raising over $750 million. Responsible for over 50 IPOs and over 100 Reverse-Mergers on the TMX and Nasdaq, Tim represented Wolverton nationally on various stock exchange committees and industry groups, including the Corporate Finance Advisory Group and Underwriting Groups on various Canadian exchanges.
Tim serves as a Director for several Canadian mining companies, is an MBA graduate in Finance from the University of British Columbia, holds a Certified Professional Accounting Designation (CPA, CMA) and is an active member of many industry and trade organizations in Vancouver.
Gordon Jung — Director
Gordon has over 35 years’ experience in business operations, including retail, merchandising, marketing and product development for the Overwaitea Food Group, a major food chain in western Canada. His resume includes positions as regional manager for 10 retail stores, the director of marketing for the Save-On loyalty card program, with over 2 million card holders, and senior category development manager credited with achieving double-digit growth putting together isle international foods from around the world. He specializes in strategic planning, developing new opportunities, driving revenues, improving competitive market position, procurement, and product marketing.
Robert Culbert, P.Eng. — Director
Bob is a professional engineer with over three decades of international project and business experience, predominantly in West Africa, Southeast Asia and the Indian Sub-Continent. He was the president of a Vancouver-based land resource and environmental consulting company and an interior BC ski resort; he was a partner in the acquisition and syndication of a large residential real estate portfolio in western Canada. Over the past decade, he has served as an officer and director of several junior resource exploration and development companies. Bob is also a director of Carlin Gold Corporation.
Simon (Tak Than) Tso, CPA, CFA — CFO
Mr. Tso is the Principal of Athena Chartered Professional Accountant Ltd., a full-cycle accounting firm that assists companies of all sizes with their financial reporting, regulatory filing and taxation requirements. Simon is also a co-founder of Zeus Capital Ltd., a boutique corporate finance firm that specializes in providing financial advisory, valuation and consulting services. Prior to his current roles, Simon spent a number of years as an associate at a local corporate finance firm and as a Senior Accountant at a firm of Chartered Accountants, where he managed numerous private and publicly-traded corporations, commonly acting as their Controller or Chief Financial Officer. Simon graduated with a Bachelor of Commerce (Finance) degree from the UBC Sauder School of Business, and is both a CFA Charterholder and a Chartered Professional Accountant.
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