Surge Exploration Inc. said Jan. 9 that its board approved a proposed spinoff of its interests in the Hedge Hog and Mineral Mountain copper-gold exploration projects in British Columbia into a newly incorporated subsidiary named CuGold Corp.
Surge shareholders would exchange their existing common shares of Surge for the same number of new common shares of Surge and common shares of CuGold. The number of common shares of CuGold to be issued has yet to be determined, and there will be no change in shareholders' holdings in Surge as a result of the spinout. The reorganization is subject to shareholder approval. The date for a meeting has not been set.
Surge said it plans to list CuGold's shares on the Canadian Securities Exchange.
In connection with the proposal, Surge seeks to raise C$750,000 through a private placement of up to 15 million units at 5 Canadian cents apiece. Net proceeds will be used to fund the working capital of CuGold, potential joint ventures and future acquisitions.
Formerly known as Copper Creek Gold Corp., Surge agreed to acquire Mineral Mountain in 2018 and secured an option to earn a 60% stake in Hedge Hog in 2017.
Surge said it will retain its interests in its Chilean projects, namely the Atacama Cobalto project, where it has a 70% option, and the Incahuasi lithium project as well as its 60% options in the Bucke and Teledyne cobalt properties in Ontario.