African Rainbow Minerals ups copper game with Surge stake
African Rainbow Minerals (JSE: ARI) has agreed to buy a 15% stake in Canadian explorer Surge Copper (TSX-V: SURG) for $2.8 million (C$3.8m) in a move that would boost the South African miner’s exposure to copper.
South Africa’s ARM, through its wholly-owned subsidiary ARM Copper, will subscribe for 39.61 million common shares of Surge at C$0.095 each, as part of a strategic placement. The figure represents an 18% premium to the 20-day volume, the companies said.
The investment provides ARM a key entry point into an emerging critical metals district in British Columbia, Canada.
The contiguous mineral claim package controlled by Surge contains several advanced porphyry deposits with compliant resources of copper, molybdenum, gold, and silver. Most of these metals are considered critical for the world’s successful transition to a low-carbon economy and related electrification technologies.
“We are excited to be welcoming ARM as a strategic investor into Surge,” chief executive officer Leif Nilsson said in the statement. “They bring significant experience in the development and operation of large-scale mines, with a foundational commitment to operational efficiency and fostering strong community ties.”
One of the highlights of Surge’s exploration portfolio is the Berg project in BC. A preliminary economic assessment of the asset has determined a net present value (discounted at 8%) of $1.55 billion (C$2.1bn) and an internal rate of return of 20% based on long-term commodity prices of $4/lb copper, $15/lb molybdenum, $23/oz silver and $1,800/oz gold.
The Berg project is projected to have a 30-year mine life with a total production of 2.6 million tonnes (Mt) of copper equivalent, including 1.7Mt of copper. The resource is estimated to contain approximately one billion tonnes of 0.23% copper, 0.03% molybdenum, 4.6 grams per tonne (g/t) silver, and 0.02 g/t gold.
Surge also owns the Ootsa property exploration project, which includes the Seel and Ox porphyry deposits, located next to Imperial Metals’ (TSE: III) Huckleberry copper mine.
