Key Points
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Surge Copper closes C$4.5m placement with African Rainbow Minerals.
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ARM chairman Patrice Motsepe stresses copper’s importance in clean energy.
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Surge Copper allocates funds toward drilling, feasibility studies, and development
Surge Copper Corp. has closed a C$4.5 million private placement with African Rainbow Minerals Ltd. (ARM), a South African mining giant. This deal will help the company make British Columbia a key source of copper for the global energy transition.
The financing, which was made public on Tuesday, gives ARM a bigger stake in the Canadian junior explorer, which is in charge of the Ootsa and Berg projects in central British Columbia.
The partnership shows that ARM, which is based in Johannesburg, wants to diversify its metals portfolio and get into copper, which is expected to stay in short supply as electrification speeds up.
ARM strengthens its copper push with a stake in Canada
According to a report by Mining weekly, ARM paid C$0.16 for each of the 28.1 million Surge Copper shares it bought. That means that over the past two years, it has invested almost C$30 million in the Vancouver-listed company.
Surge Copper CEO Leif Nilsson said, “This placement shows that ARM trusts both the quality of our assets and our ability to deliver value.” “Having a global mining company like ARM on our side is a big help as we move Ootsa and Berg forward.”
Patrice Motsepe, a billionaire, is the head of African Rainbow Minerals, one of South Africa’s most powerful diversified miners. The company owns platinum, manganese, coal, and iron ore mines. ARM has said in the past few years that it wants to focus more on base metals that are linked to clean energy.
Motsepe told shareholders in July that “copper is essential to a low-carbon economy.” “Strategic investments like Surge set ARM up for long-term growth.”
Long-term strategic bets on copper projects
Geologists think that the Ootsa property, which is next to Hudbay Minerals Inc.’s Copper Mountain mine, could be good for large-scale development. In the meantime, resource drilling has shown that the Berg project could grow.
Greg Barnes, a mining analyst at TD Securities, said that ARM’s repeated investment shows that they believe the properties will be profitable in the long run. Barnes said, “This is not a speculative gesture.” “ARM knows how the price of copper changes over time and thinks British Columbia is a more stable place to do business than Latin America.”
Following the announcement, Surge Copper’s shares rose 4.5% on the TSX Venture Exchange, closing at C$0.185, their highest level since May.
Money to move forward with plans for exploration and drilling
Surge Copper wants to use the money it gets from the financing to pay for drilling campaigns, environmental studies, and community consultations. This will help Ootsa and Berg get closer to being feasible.
Nilsson said, “The clean energy transition won’t happen without a steady supply of copper.” “This investment makes our balance sheet stronger at a time when copper shortages are becoming a bigger problem.”
The International Energy Agency says that by 2035, the demand for copper could double, making it hard for miners to find new deposits. ARM’s most recent move shows that the biggest mining companies in Africa are willing to look for growth opportunities outside of Africa.
