TSX-V-listed Surge Exploration has approved, in principle, a strategic reorganisation of the company’s assets, in which the company would spin off its interests in the copper/gold Hedge Hog and Mineral Mountain exploration projects in British Columbia, into a newly incorporated subsidiary called CuGold Corporation.
Surge will retain its interests in its cobalt projects in Chile and Ontario and its lithium brine project, in Chile.
The transaction will be carried out through a statutory plan of arrangement. Under the terms of this plan, shareholders of Surge would exchange their existing common shares of Surge for the same number of new common shares of Surge – having the identical terms of the existing Surge common shares – and common shares of CuGold.
The number of common shares of CuGold to be issued to each Surge shareholder under the spin-out has not yet been determined.
The company assured shareholders that there would be no change in shareholders' holdings in Surge as a result of the spin-out.
Surge intends to complete a private placement into CuGold for a maximum of 15-million shares at a price of C$0.05 apiece for gross proceeds of C$750 000.
The gross proceeds will be used to fund the working capital of CuGold, the negotiation of potential joint venture opportunities and potential future acquisitions.
The spin-out plan still needs approval from Surge shareholders, the TSX and the British Columbia Supreme Court.