Surge will continue to hold its interest in its cobalt projects in both Chile and Ontario, as well as, its lithium brine project in Chile.
It is proposed that the transaction will be carried out by way of statutory plan of arrangement (the “Spin-Out”) pursuant to the Business Corporations Act (British Columbia).
Under the terms of the Spin-Out, 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. There will be no change in shareholders’ holdings in Surge as a result of the Spin-Out.
In connection with the Spin-Out, the Company intends to complete a non-brokered private placement (the “Financing”) into CuGold for a maximum of 15,000,000 Units at a price of CAD$0.05 per Unit for gross proceeds of CAD$750,000.
Each Unit is comprised of one common share of the Company and one share purchase warrant. Each whole warrant will entitle the holder thereof to purchase one additional common share of the Company at an exercise price of CAD$0.05 per share, for a period of two years from closing.
Finder’s fees will be paid in connection with the private placement and all finder’s fee payable are subject to Exchange approval.
The net proceeds of the Financing will be used to fund, among other things, the working capital of CuGold, the negotiation of potential joint venture opportunities with respect to the Exploration Projects and potential future acquisitions.
The proposed Spin-Out will be subject to the approval of Surge’s shareholders which Surge intends to seek at a special meeting of shareholders (the “Shareholders’ Meeting”).
The date for the Shareholders Meeting has not yet been determined. The Plan of Arrangement is subject to TSX Venture Exchange (“Exchange”) approval and the Spin-Out also requires the approval of the British Columbia Supreme Court.
The Company intends to seek a listing of the CuGold common shares on the CSE but no assurance can be provided that such a listing will be obtained. Any such listing will be subject to CuGold fulfilling all of the requirements of the applicable stock exchange.
Further details of the Spin-Out, including the date for the Shareholders’ Meeting and the number of CuGold common shares to be granted to shareholders of Surge will be announced in the near future.
Shareholders are cautioned that the final details of the Spin-Out are still be to be determined and there is no certainty that the Spin-Out will be completed on the terms currently proposed or at all.
Source: Company Press Release
