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More funds are flowing into Surge Copper’s (TSX-V:SURG) treasury at the
same time as the company intersected a new mineralized zone at its Ootsa
copper project.
Vancouver-based SURG said on
Wednesday it closed a non-brokered private placement consisting of 2.3 million units priced at 10 cents a
share, raising $230,000. Comprised of a share and a warrant, unit holders can
buy common shares for the next 36 months at an exercise price of $0.18 per
share. Surge was trading at 11.5 cents a share at the close of trading Friday
in Toronto.
Meanwhile at Ootsa, where a 3,000m
drill program is underway, the second hole intersected a new zone of
mineralization 500m northeast of the East Seel deposit.
East Seel is considered to be the
deposit with the highest grades, where 40 to 50- meter intersections of
nearly 0.75% to 1% copper grades have been assayed.
Surge Copper has plans to expand the
current mineralized zones and its 2018 exploration plan involves exploring
around the edges of the East and West Seel deposits. The goal is to add
another 20 to 24 million tonnes to the current 224 million tonnes of measured
and indicated resources in the ground, which would enable Surge to
comfortably run a stand-alone operation ie. a mine that could function
without any involvement from neighboring Huckleberry Mine, owned by Imperial
Metals but currently on care and maintenance.
Hole S18-212 was drilled at a
135-degree angle to a depth of 483 meters, and is said to contain zones of
mineralization containing pyrite,
chalcopyrite, and sphalerite along with carbonate and quartz. More details
are contained in a July 25 press release:
The mineralization occurs as a
sulfide rich breccia matrix and in sulfide veins and veinlets and is best
developed between about 218 and 296 metres depth. Hole S18-214 is a 100 metre
step out from hole S18-212 and was also drilled at an azimuth of 135 degrees
and a dip of -50 degrees. Hole S18-214 intersected the same mineralized
sulfide breccia as hole S18-212 and has traced the mineralized zone closer to
surface. Hole S18-214 encountered 55.3 metres of overburden prior to hitting
highly altered bedrock, and intersected sulfide breccia mineralization from
91 to 120 metres depth with weaker breccia below. Hole S18-214 is still being
drilled.
The style of mineralization
encountered in holes S18-212 and 214 is distinct from the porphyry style
mineralization that occurs at the East and West Seel deposits but this style
has been intersected at Ootsa previously. Hole S06-42 encountered this
style of mineralization and highlights its potential to host high grades
as the hole returned 138 metres grading 0.84% copper and 22.1 g/t silver,
including 42 metres grading 1.24% copper, 32 g/t silver, and 0.13 g/t gold
(previously released).
The proximity of Surge Copper to the
currently-shuttered Huckleberry Mine means it is an ideal takeout target for
Imperial Metals should Imperial need more mineralization to feed its aging
mine, which is estimated to only have about five more years of minelife.
However, Surge also has enough potential reserves for a stand-alone
operation, which could either interest an investor wanting to partner with it
if Surge Copper goes mining, or a major who buys the company outright. All three scenarios are good for Surge investors, who are bound to see a dramatic share price rise if any of
these possibilities takes place.
And takeouts ARE taking place in
northwestern BC, in the Golden Triangle, home to
some of the largest and richest mines in Canadian history as well as a bevy
of exploration projects that have yet to yield pay dirt. Yesterday Newmont
Mining, a US gold major, acquired a 50%
interest in the Galore Creek Partnership from
NovaGold Resources and Teck for $275 million. Galore Creek is around 150 km
northwest of Stewart, BC. A 2011 prefeasibility study outlines 9 billion
pounds of copper (measured and indicated), 8 million ounces of gold and 136
million ounces of silver. As part of this week’s deal, Newmont will also get
40% of the adjacent Copper Canyon property. NovaGold noted the stake sales
will allow the company to focus on its flagship Donlin Gold project in
Alaska, which contains an estimated 39 million ounces of measured and
indicated gold grading 2.24 grams per tonne.
We reported recently that big
copper deals are drying up, and that large copper companies best look to
exploration companies to obtain new supply. A deficit
in the copper market is predicted in two short years, by 2020. That
means juniors like Surge Copper are well placed for a buyout. If success at
the drill bit continues, their interest in SURG is likely to be piqued.
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Legal Notice / Disclaimer
This document is not and should not
be construed as an offer to sell or the solicitation of an offer to purchase
or subscribe for any investment.
Richard Mills has based this
document on information obtained from sources he believes to be reliable but
which has not been independently verified.
Richard Mills makes no guarantee,
representation or warranty and accepts no responsibility or liability as to
its accuracy or completeness. Expressions of opinion are those of Richard
Mills only and are subject to change without notice. Richard Mills assumes no
warranty, liability or guarantee for the current relevance, correctness or
completeness of any information provided within this Report and will not be
held liable for the consequence of reliance upon any opinion or statement
contained herein or any omission.
Furthermore, I, Richard Mills,
assume no liability for any direct or indirect loss or damage or, in
particular, for lost profit, which you may incur as a result of the use and
existence of the information provided within this Report.
Richard owns shares of Surge
Copper (TSX.V:SURG).
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