$2.1B Copper Assets With Growth Plans | Surge Copper CEO Interview
Summary
Company Overview: Surge Copper is a development company focused on copper, molybdenum, and precious metals in British Columbia, with significant assets including a $2.1 billion NPV8 project and a 20% IRR.
Market Position: Surge Copper is listed on the TSXV under the symbol SURG, with a market cap of $80 million and positive stock momentum, trading above its 50-day and 200-day moving averages.
Project Developments: The company has completed a year-long MET program for the Bird project, aiming to improve recovery rates and reduce risks, with a prefeasibility study expected in the first half of 2026.
Strategic Financing: Surge Copper raised $10.4 million through a private placement with ARM, increasing ARM's ownership to 19.9%, and plans to use the funds for prefeasibility study completion and environmental assessment readiness.
Exploration and Drilling: The company completed a 5,000-meter drill program focused on resource infill, environmental geochem, and geotechnical drilling, with results expected to enhance project data and support future studies.
Strategic Partnerships: ARM is considered a strategic partner due to its mining expertise and potential to support future project development, despite having no current copper operations.
Investment Thesis: Surge Copper is positioned as a potentially undervalued copper developer with significant exploration potential and strategic partnerships, aiming to capitalize on the bullish copper market outlook.
Future Plans: The company is focused on advancing its prefeasibility study and environmental assessment processes, with ongoing efforts to engage with regulatory bodies and First Nation partners.
Transcript
Today on the CEO barbecue, we're looking for copper, malibdinum, a little bit of precious metals as well in BC together with Serge Copper. If you want a bullet point summary of this conversation and all the other CEO barbcues in your inbox once a week, go to resource.com and subscribe to our free newsletter. Now, the company you're about to hear from has paid us for the production of this video, which means that this is not research. It's an advertisement and you should treat it as such. Research is conducted by reading the company's official filings which you can find on setterplus.ca. And please only watch this if you absolutely know what you're doing. This interview is intended only for experienced junior mining speculators because mineral exploration development and mining is a very tough business where failure is the norm and should be the expectation. This is going to be a conversation that is general and impersonal in nature containing forwardlooking statements. I am not a licensed financial adviser and my business sells content producing services which also makes me biased in multiple ways. So before continuing on, please talk to an independent investment adviser with a good long-term track record because your capital might be at risk. If you're not 100% sure you understand 100% of the disclaimers I just showed you, please go to the last section of this video and do not consume this content unless you fully understand and agree with everything said therein. That said, Serge is a development company that owns a large land package in British Columbia where a couple of porefree deposits um have been discovered. They have a 2023 PE on uh one of those deposits with a $2.1 billion NPV8 and a 20% IRRa on it with a $2 billion pre-capex uh pre-production capex good for 30 years of mine life and an average annual after tax free cash flow of nearly $350 million for the LOM. All of which calculated at $4 copper, $15 malibdinum, $23 silver, and $1,800 gold. And all of which, of course, are much lower prices than the spot prices of the metals today, which is something hopefully Leaf and I can talk about later on. We don't really need the usual in-depth company overview here. uh neither a smell test because Leaf and I spoke about 4 months ago in what ended up being a 2 and a half hour interview covering everything from insider incentives, uh risks and challenges, growth opportunities, and so on. So, if you're new to the story, you cannot afford not to watch that interview first. Uh so, I'm I'm going to link in the description of this video. Surge is listed as uh Surge, so SURG on the TSXV, and uh with just over 345 million shares outstanding and an $80 million market cap. Today, this is a 22 cent stock with a 52- week high of 31 cents and a 52- week low of 9. The 50-day moving average is at 20.5 cents and the 200 day moving average is at 14.5 which means the stock is trading well above both of those um indicating positive momentum. 3mon average daily volume is about 430 although the 10day volume seems to be increasing with an average of almost a half a million shares. Again uh no long intro needed here so I'll just shut up already and leave I'll let you do the talking but first of all thank you so much for being here today. >> Thank you very much Antonio. I'm happy to be here and yeah, the interview we did uh earlier this summer got I got a lot of great feedback from it. So, um yeah, very happy to be another have another opportunity to be a guest on your podcast. I'm a big fan. >> Of course. Appreciate it. And um and and I'm looking forward to it as well. I'm um I'm just I got pretty good feedback on it because I think that's one of the longest interviews that I've done and uh it was two and a half hours and I'm I'm just happy that people still, you know, care about our our sector enough that they're going to and and a lot of them too. Um that they would actually go and watch it. So yeah, pleasure is mine. I see that you've had a couple of news releases since we last spoke this summer again about four months ago. So maybe just a brief summary. What have you done for shareholders lately? >> Uh yeah, sure. I don't have the the chronology of releases in front of me, so apologies if I'm overlapping or repeating anything I've talked about before, but yeah, the big um the big news for us uh in the summer was the delivery of a MET program. Um, again, I don't recall if I went into any degree of detail on that last time, but uh, yeah, it was about a year-long program that we were uh, running uh, as part of the kind of underlying technical work that is going to feed into the prefeasibility study for the Bird project. Uh, and yeah, the results were were very good. We're very happy with it. um robust kind of program. Lots of different um you know pretty large volume of material, large volume of individual uh tests across the kind of full spectrum of um you know stages of the flowheets and um you know the the different uh you know products that are going to come out of this thing which is a copper con containing precious metals and a and a molly. So, uh, you know, when we came out of the pea, there was there was some recommendations around this this, uh, particular piece and, um, and it's obviously been a a focus of ours as long as we've owned the bird project. So, there was a lot of preparation that went into it and I think we were aiming to achieve the types of results that we did. So, um, absolutely fair to say that we're we're pretty, uh, pretty happy with the results and, um, yeah, it'll point to both an increase in, uh, you know, prospective assumed recovery um, recoveries for these key metals in the PFS. So, so the corpus of data will allow us us and our independent engineering consultants to derive recovery formula that will point to kind of life of mine uh recoveries that are likely going to be materially higher than what we saw in the in the pea. So, that's obviously good, but uh it's also just a a risk reduction. This is a kind of key component to these types of projects. Uh and I think in the pea it was certainly an area that we were um we were conservative around for for the for that reason that there just wasn't uh the type of work done on it that we uh that we wanted. So I think we've uh really advanced that uh perspective on on the project. So that's probably the main item and then um we had a uh you know significant financing this summer as well. Uh the color there it was uh launched at the beginning of July. It was a um we've got a significant shareholder in a a group called ARM, South African Diversified Mining Group. Uh they uh prior to this financing owned about 15%. Uh we had kind of negotiated with them leading up to this financing to to have them increase their ownership to 19.9 which is the kind of maximum thresholds that you can you can do here in Canada. And um and so it was kind of a couple parts to the financing. One was that private placement um bilateral between us and ARM. Uh and the other piece was a public offering uh to existing and and just kind of normal uh market investors and um roughly half and half. So I think uh just under six million went to the um the or yeah just under six million went to the public market investors and about four and a half uh to ARM. So it was about uh $10.4 million in total raised. uh and the first trunch of that with the public investors closed at the end of July uh and then the the balance with uh ARM closed in uh in September and use of proceeds there the the guidance to investors in the market as a whole was this is going to give us runway to deliver the prefeasibility at Berg in the first half 2026 and allow the company to uh complete its EA readiness objectives its environmental uh assessment uh readiness objectives. So what that means is you know getting all of the uh environmental baseline data in place, the document preparation in place, the um you know kind of agreements and and soft sort of relationships and and engagement all advanced with both the regulatory uh entities and the government as well as our our First Nation partners. uh so that when we embark on that formal environmental assessment process, it's uh you know, we're kind of as set up for success as we can be uh in order to kind of keep the timelines uh moving uh ahead efficiently and and make sure everyone's all the relevant stakeholders who are going to be at the table are are uh kind of party to that. So, a lot tons of work is going to go into that. um you know we're we're sort of soft circling a a similar timeline to what I mentioned for the PFS there of uh of the first half of next year but um it's there's there's obviously a lot more things kind of external to the company in that case as opposed to delivering a prefeasibility which is just kind of you know down to us and our our engineering uh uh partners. So, um, we'll we'll be keeping the market, uh, up to date as we are, you know, up to up to speed on those timelines as we progress things over the winter, but, um, yeah, we're kind of up to our eyeballs right now in all of the, uh, PFS related stuff. And then in the in the middle of all that, uh, we had a field program as well. So, uh, you know, in in concert with the, uh, announcement of that financing in July, that's the usual time frame that our summer field season kicks off. So roughly from the July time frame to the end of September, we had lots of activity going on in the field, we had um you know about a 5,000 meter drill program spread across bunch of different objectives ranging from resource infill drilling um environmental geochem drilling, geotechnical drilling um you know various other uh activities going on around environmental baseline as well. So, uh, I think as I mentioned in one of my one of the press releases, it was a certainly a hive of activity, lots of different professionals, uh, at camp, uh, for a significant part of the the summer, there was no spare beds. It was, uh, it was a very busy uh busy busy uh, place. So, uh, but successful. We had a great field season, got everything that we needed to get. Um, I think everything's, uh, coming out looking looking the way we want it to. So, uh, yeah, company's posture at the moment is very much, um, burn rate has come way down, uh, with the conclusion of the field season and over the winter, it's going to be kind of taking, uh, taking stock of all of this technical data that we've gathered over the last three field seasons since the pea to pull it all together into uh, the next uh, you know, big economic study milestone in the form of the prefeasibility study uh, targeting first half of next year and advancing all the kind of EA readiness stuff in parallel with that. >> The 5,000 meter number there is interesting to me. So, we'll definitely be back to that. But, uh, and looking at your skin tone, doesn't look like you you were able to spend much time at the beach this summer either. >> Well, uh, okay. Yeah. I mean, I uh I got a bit of uh outdoor time for sure. I'm an avid golfer, so uh tried to tried to do a bit of that, but um >> Did you go to site this year? >> I mean, >> I I did. Yeah. But I'm uh you know in in contrast to probably a lot of your other um companies that you interview I'm not the the geo style of uh of CEO. I got a bit of a technical background but uh our our president and VP exploration uh Shane Bird he he's the you know guy that runs the stuff in the field and is uh very very hands-on there. Uh so I'm I'm more of an office office office rat and spend a lot of my time in the in the cities and doing you know uh conversations and and marketing and uh strategic type stuff. But uh yeah, I did make it to to sites um uh for about a week toward the end of the field season this year. >> Yeah. Um again, a couple of things to touch upon there. Really um four or five big points that we're going to be going through here today. Financing first though and and we'll talk about the proceeds and and their proposed destination here in a minute as well. African Rainbow Minerals Limited. So, uh, ARM is is giving almost 5 million bucks and are increasing their ownership to 19.9%. As you said, you're calling them a a strategic partner here, but but how or why is it that that that they are strategic partner given that again they're ASX listed uh and operate they operate mostly in South Africa, right? They produce iron or maganganesees, PGMs, coal, nickel I think, but not I mean not much to do with copper, right? So how are they how are they strategic fit for you? >> Yeah. Uh just to clarify for folks that JSC listed, not ASX. So they're they're listed on the Johannesburg Stock Exchange. That's right. Um >> yeah. Uh so headquartered in Joberg and uh yeah, kind of uh rich tradition there in uh South Africa and and as you mentioned mo most of their operating assets are are in South Africa. uh they've got some sort of downstream uh refining assets in Malaysia as well and uh they do have a history um you know many years back of uh some uh you know assets outside of South Africa in continental Africa in places like Namibia, DRC uh Zambia um etc. So uh yeah the current snapshot of the platform though is is very South African uh centric and yeah they are a diversified mining company as as uh as you note with exposure across a bunch of different commodities um no no operating copper exposure today which uh I think interestingly is a is to some degree a expression of the geology of South Africa. I just don't think there's a lot of uh opportunities to to to do that in South Africa. there aren't a you know there isn't a huge amount of um uh you know known deposits or geological environments that are perspective for big copper deposits in in that country. Obviously if you go a little bit north into uh Batswana and Namibia and then you know further into the uh the copper belt that changes. So they've had um they've had uh copper assets in in the past uh but uh divested those and so the platform you know as it currently is configured uh doesn't have an operating um exposure to to copper. Uh but as a diversified mining company I mean I would I would point to examples that probably all market watchers are familiar with in recent years of companies that are not incumbent players in the copper mining business. uh either executing on transactions or at least kind of rhetorically pointing to that. And that would range from gold mining companies to uh yeah, you got some uh you know examples that have a lot of um institutional overlap with ARM like uh like Harmony. Harmony is a sort of a related party. They've got ARM has a big shareholding in Harmony. uh they share some some uh you know directors and so forth and and Harmony is an urst while kind of gold mining company out of uh out of SA but um has made some you know big uh big acquisitions in the copper space in recent years and yeah so I think there's a this is uh I think one demonstration dare I say proof of a thesis that I've had for a number of years which is that um you know the copper thematic the the thesis around copper the the bull market in copper is I think a uh a a bet a thesis that um a lot of people in our industry share um and and it's been building for many years and I I think it's starting to gain real momentum now but it's been brewing for uh quite a long time and I I think the basis of it is that uh a lot of people strategically see there being excellent supply and demand fundamentals in that market but perhaps perhaps of equal importance is it's big market right like I think you can look at things like rare earths and graphite and things like that and come to a similar conclusion that there's excellent supply and demand fundamentals but uh as everyone or as as people who work in this industry know uh a lot of these minor metals are really small markets and uh in many cases when you have market fundamentals developing in a positive way the way that translates into the into the corporate development or sort of you know new mindbuild type uh type, you know, opportunity set is it's a race to the finish line to get kind of one project built because the the market can't even handle more than one or two mines. So, copper is very different, right? like there's a there's a depth to the market. I think a uh a a kind of fact pattern around it that we need the the the world's needs to produce a lot of this metal in order to achieve a a wide range of you know uh social development energy production development um just GDP growth urbanization etc etc I heard this from many people I'm sure but uh in order for the world to achieve a bunch of this stuff we need to mine a build a lot of new copper mines and so there's there's a big depth to that market and so I think a lot of diversified miners are really keen to get involved in uh in this this space and ARM is no exception. Uh so why do I see them as a strategic uh partner for us? Well, they are a they're a mining company. I I sort of use a very specific definition of the term strategic investor, which is that it's a uh yeah, it's like they're not a financial investor. They're not the type of uh investor that is um uh passive and buying simply to see their their um the market value of the shares that they own go up in price with an intention to sell in the future. Uh it's very much a um long-term operating investment. They are a mining company that's in the business of um building and operating and holding mining assets for the long term. their investment in Surge is uh building optionality for them to do that. I don't think they they don't view it as one of these things where it's like if the share price gets to some level they're going to liquidate and move on. They don't have a portfolio of uh of similar things. So their investment in this type of thing is really around assessing it as a uh from a kind of build own operate uh type um uh type type perspective. And I think importantly again words have meaning and and matter. So when I when I use the term strategic investor like that that signals to investors a few things and and there there's there's kind of two sides to it. On the positive side it's like a uh there's validation endorsement. Um obviously a highly technical group has run the ruler over stuff and come to a determination. But there's also agreements that come in uh that that come along with these sorts of strategic investments that you know a you know if we had a similars sized investment from a purely financial counterparty um you wouldn't expect to see the same agreement or or rights being granted to that party. But you often do in these, you know, quote unquote strategic investments where the counterparty negotiates for protections, um, in some cases, uh, you know, first look type rights, um, that sort of thing. So, I I I think the, uh, I think the term strategic investor is really meant to, um, to communicate and signal, uh, those sorts of things. It's like there's there's a there's things that fall into both the positive and maybe less than positive um uh bucket with regard to uh you know validation on the positive side, technical support um all that stuff. But you're also you're also granting some unique rights to a counterparty that you wouldn't uh otherwise uh you know see or or be doing with a a purely financial investor. I I do kind of get it from their perspective, I suppose. But what about from your perspective? What are the synergies that you would have having them on as a strategic as opposed to um as opposed to someone else? Yeah, I mean um they are a uh a a company with a balance sheet and free cash flow generation that uh is in the I'm repeating myself here but they're in the business of building and operating mines. So if you know our take for example our flagship asset at Berg if it ultimately gets to a construction decision, they're the type of group that uh you know could could be involved at at really any level of of ownership. And there's lots of ways to structure these things and we can get into the weeds on that if you want. But they're they're the type of group that um uh can be uh yeah brought to bear in terms of um providing balance sheet depth and relationships with you know many of their operating partners that they have in their business. So if you look into the details of how they operate their uh their assets in South Africa, effectively all of them are in joint venture with uh a wide array of multinational mining enterprises. Um the likes of you know Glenor, Nurilk, um you know Anglo over over different periods of time etc. Valet over different periods of time that sort of thing. So lots of relationships there. Um a lot of familiarity with building things in partnership. These sorts of big porefree copper mines uh they are frequently done in uh in in joint ventures. Right? If you look at the uh asset level ownership of a lot of these big copper mines, whether you're talking about the ones in BC or Chile or wherever, you often see, you know, one or more mining companies, uh maybe like an offtake partner, uh you know, a company that operates smelters in Asia, that that sort of thing. So >> um again they're the type of group that could very logically and easily fit into that kind of uh kind of mix either directly or through their ownership in uh the top code. Now that's that's you know that's down the road right right now this the ownership Roundberg is very simple Serge owns 100% of it they own 20% of Surge they're providing financial and uh and kind of strategic or technical support uh to what they're doing u I think more in a more nuanced fashion though um yeah like they they're the type of group that could back surge into um you know really interesting corporate development opportunities that may uh may arise for us in the future where um you know more special situation type things where the type of capital outlay is maybe significantly smaller than what I'm talking about for the green field development of something like Berg you know something like Berg would which the usual way these things are financed would be uh big corporate finance or sorry big project finance facility uh you know JV equity comes in if you look at what Hud Bay just did at Copper World they sold 30% of that development project to Mitsubishi for a big number. So I think they they're bringing in 600 million for themselves and then that that party will you know continue to contribute their proratic capital. Um and yeah, so there's there's lots of sort of standard ways in which these big capital nuts are ultimately whittleled down through uh through, you know, project level debt, maybe something like a mezzanine type product like a stream or a royalty uh partnership uh JB type stuff and then and then kind of the ultimately the the partners are contributing um uh equity. So that's the case for Berg, but uh we we may have other types of opportunities that arise for us that are of a more special situation type nature where it's it's more rifle shot um you know smaller chunks of capital, but they would be opportunities that would see us uh yeah maybe acquire um more mature but smaller assets. Uh and you know from the ARM perspective uh it's the type of thing where they would derive a lot of value from it in terms of um being able to you know uh leverage surge as a vehicle to um uh acquire something interesting like that in in a jurisdiction that they do not operate in. And vice versa, we would drive a lot of value from it in terms of that uh backing that uh you know financial and um operating experience uh type backing. And in that in that realm I draw a very distinct uh comparison against what probably a lot of people in this industry are more familiar with when they look at strategic investments which is these bigger counterparties um like the you know in the gold space AGO is really well known for this in the copper space tech is really well known for this. So these big um you know industry leaders in Canada who make strategic investments in a much more kind of portfolio broad sense where they are investing these kind of chunks of capital across like a dozen of these things and uh there may be some rights involved there. There there's obviously um you know uh technical committees and prata participation and and what have you but uh but there's also a pretty long history of divestments as well. So they've kind of, you know, seen these things grow up into their own their own things. So I mean Orllo is a a very successful example of this. In the case of Agniko, uh recently they made a pretty substantial divestment of a of a position that was, you know, quite successful uh for them. And so yeah, I think those those bigger companies that are doing this on a portfolio basis, I think the relationship between the junior and that parent comp or that larger company is um is a is a little bit uh different than I think what we are aiming for and ultimately experiencing with ARM, which is a yeah pretty pretty honest um exchange of strategic value. like we're we're able to bring strategic opportunities and um and insights to to them uh with a Canadian lens and vice versa. they're able to bring to us um you know kind of explicit balance sheet uh depth um on a on a look through basis and uh and credibility when it comes to operating capabilities that are are maybe not as uh readily apparent when you just kind of look at what surge is today as a junior mining company that's pursuing you know a prefeasibility on a big copper project >> theoretically hypothetically forward-looking being speculative and all that, but would Canada be happy with potentially giving, you know, potential control of such a large asset within a strategic commodity to a South African or just a non-Canadian company in this case? >> Well, uh, Anglo-American has deep South African roots and they're in the process of merging with tech. Um, so yeah, I don't see why not. I mean, the to be clear, well, I don't think you can be clear in this. It's all it's all a bit uh murky, but uh I I think the recent history with regard to uh Investment Canada reviews around these types of things like uh change of control transactions with foreign buyers for mining companies, it's really been Chinese buyers that have been stymied. Um and I and I think that's kind of where the line has been drawn. I I suspect if like uh you know Narilk tried to buy assets in Sudbury or something you know they'd probably run into some trouble as well but uh no that those sorts of things are not happening. So most of what we've seen recently is uh Chinese S so ses um making either change of control offers for Canadian companies with assets abroad um or or even strategic investments sort of minority 10 to 20% stakes for Canadian companies with assets abroad and um a number of those have either been you know blocked outright or just sort of stalemated in a in a way in the in the process. Um but all that was in the last uh the last yeah the the Justin Trudeau uh era and so um the world has changed in a in a big way. So um yeah I I don't see I don't see this being a an issue for us at all. Um, >> does having them at 19.9%, which I guess is not a it's not a backing uh, it's not a it's not a blocking interest in there, but does having them in there for, you know, almost 20% now, does that um, does that mean there's no room for others or could there be room for other strategics for, you know, future financings? The answer to that is yes, there's absolutely could be room for others and and our board thought long and and carefully about this. Um so the yeah the way to think about it is like the the reason for the 19.9% threshold is that that's kind of Canadian uh securities laws or corporate laws. Um if if you go above 19.9% you're obliged to make an offer to like all shareholders. So that's that's kind of the practical uh limit before before there's a creation of a control person and and there there needs to be a bunch of steps taken to either uh get shareholder approval to do that or you know make a takeover bid for the whole company. So uh that that's the kind of reason for that uh 19.9%. you know, if I'm just speaking generic terms, not specifically about Surge here, but uh in generic terms, if you have a company with a 19.9% shareholder and the thing evolves in such a way that there is a third, you know, bidder that comes in, a third group that comes in and is, you know, offering a price and and a transaction structure and terms that are like attractive to all shareholders. you know, these these sorts of things are they're not de facto uh blocking stakes. So, this is going to get into a little bit of M&A mechanics in in Canada, but the way it works in Canada is, you know, you you do what are called plan of arrangement transactions in most cases, which is they're all or nothing transactions predicated on uh the approval of 66 and 2/3 approval of all the shares that are being voted. So in theory, uh, if you have, you know, a really large turnout at a at a shareholder vote for an M&A transaction, you need 66 and 2/3% not not of the whole 100, but not of the whole pie, but of just the portion of the pie that turns up. And if you get that if you if you cross that threshold, then it's compulsory that kind of everything gets uh gets sort of put into that uh that transaction. So, uh, you know, if you had a if you had a 19.9% shareholder that was not, um, you know, that was like against that transaction and not going to vote in favor of it, that's a pretty high hurdle to cross, but it's it's not a de facto blocking stake. It may be perceived as a you know for all intents and purposes uh blocking stake but um uh that that just sort of raises the bar of you know what a if a bidder wants to kind of acquire control of something it just means they have to win over that uh that shareholder or um or or you know it kind of raises the bar but it's not a de facto blocking stake. Um, bringing it back to the surge case though, I I think part of how the board got comfortable with this is that again these types of assets are usually not built in uh by a single party. Um, it's a little bit different than the dynamics you see in the for example the gold space where a lot of gold mines are, you know, relatively smaller capital outlays. um they are the types of things that usually usually companies are able to finance off their own balance sheets and there's a yeah there's just kind of a cultural business preference in the gold space for companies to kind of do things themselves. You don't see a lot of JVS in the gold space. Um there's like historical reasons for that, cultural reasons, and uh I think just the kind of relative size of the of the assets allows for that flexibility. Copper is a fair bit different. Um it's and it's again probably primarily driven by the size of the capital outlays but there's just a historical um evolution there where a lot of the companies involved and a lot of the assets over time have been built in in joint venture type structures. So you go through the whole list of like these big global uh pfrey copper mines and many of them not all of them but many of them will have uh JB structures attached to them and you'll usually see like a yeah like an offtake partner a uh stateowned entity uh or you know one or more mining two or more mining companies uh attached to them in in uh in some cases and so yeah I I think in that case here like um our perspective is um you know ARM have come to the table they've been great supporters of this thing. they've earned a earned a like a a seat there and um through the the surge uh structure and if if the Berg asset if the Berg deposit ultimately finds its way to a construction decision and a a JV consortium is sort of put around it um I don't I don't think any parties coming into that would see ARM as a prospective JV partner as a as a um as as something to be avoided quite the opposite they're they're great partner to have and um again can bring balance sheet strength and uh lots of kind of um knowledge and expertise to the table. So uh I I think combination of all those things we we did not see it as something that is going to cause a lot of friction in the future in terms of the competitive playing field around a future uh M&A scenario and yeah quite to the opposite gives us a lot of optionality as we as we uh uh push things forward like we we may want to take this forward to a uh to a certain degree in the future where um yeah having a kind of in the tent um deep pocket marketed partner that can um yeah just sort of help get this thing as as as far down the road as possible is uh on balance uh definitely in our in our favor. >> I do want to talk about the proceeds from this investment as well. Uh you set out for 6.4 at first ended up getting 10 and a half if I'm not mistaken. What's the uh what are you going to do with the money? What's this what's the split going to be in terms of um yeah drilling versus other stuff? And within the drilling, what do you want to spend the most money on drilling? >> Yeah. So, to be uh to be clear, the the deposit is a is pretty advanced from a drilling perspective. So, um and and that's kind of been the case at Berg for a while. So, we're usually we haven't been in this sort of realm where we are financing, you know, 30,000 meter drill programs. um we're kind of getting in into the engineering phase of things where drilling is important but the uh size of the programs is is is not uh quite there. So uh you know for example as I had mentioned at the top what we were doing this year was a lot of like geotech and geochem drilling. Um so uh the the kind of scale of meterage is not um not up there. I mean as as we get to feasibility for sure there's going to be some campaigns uh probably for you know uh larger diameter like metallurgical uh core drilling uh lots more geotech drilling etc. So that that will come. But uh what was required for the PFS was not uh not huge like the at I've made this point um before undoubtedly but the um mineral inventory in the pea so the portion contained in the in the pit which I often think of as a you know the the target for uh a reserve the proportion of that that was already in the measured and indicated categories in the pea was was pretty high 80%. So coming out of the pea, we didn't need to do, you know, lots and lots of drilling to to upgrade an inferred resource to measured and indicated. It was much more modest than that. And also simplistically because we've got like a single deposit, single open pit, um there's a lot of like uh you can double up on a lot of stuff. You can be you can be smart with how you design drill holes so that you're achieving multiple objectives where a drill hole is you know traversing the ore body and achieving a bunch of like infill conversion drilling but also uh getting useful material for met test work getting useful material for geocchem work uh piercing the ultimate you know pit wall boundaries so you can use it for geotech etc. So um you know aggregate meterage for us has been we we've kept that um contained as a result of just smart planning and just some you know good benefits of where the where the deposit was at. Um but yeah to get to your question like the probably like 70% of that uh that proceeds is going directly to the field program that we just completed and the finalization of the PFS. So you know costs specifically related to the the the delivery of the of the prefeasibility study. So we'll we will see that uh ultimately deployed um by the kind of end of the first uh half of next year. Um, and then the other the other kind of 30% roughly of the of the proceeds is a corporate runway buffer and kind of uh direct kind of budgeted uh allocation towards EA preparedness and but a lot of that stuff is like um yeah, it's it's sort of agreement negotiation. It's it's really a lot of soft cost. It's hard to necessarily pinpoint exactly what's going to go into that. Um I think once you get into EA that's that's more uh there's more heavy lifting around environmental consultants and um field field work to deliver the goods on that. But um you know for for what we need to complete between now and uh entering the EA process a lot of the a lot of those costs would be earmarked for you know advis legal adviserss um environmental consultants >> the fun stuff >> travel you know relation just stuff like that relationship type type work around that >> but but so no immediate plan for like a a large step out or exploration drilling program where you're you know essentially I hear it as as an argument a lot um where people like we're trying to defeat the Lan curve essentially because you're going to come into that you know throw of the Lan curve there and the way some people try to defeat it is by making new discoveries um so yeah as far as I'm hearing it here no plans to you know go looking for new discoveries in the meantime then >> um I would not qu I wouldn't agree with that no we um it's just a matter of like prioritization ranking and sensitivity around uh uh dilution effectively. So, Serge has I think a really excellent um pipeline of exploration opportunities in our district. Um and if you look at our our website and some of the um kind of key press releases we've put out over the last few years around this, it's kind of the bucket that we refer to as regional exploration. you you can see some of the kind of key investments we've made in this area and it's all of a systematic nature. So we have you know done really big campaigns around uh airborne uh EM data gathering and then followed that up with you know multiple campaigns of groundbased uh you know soil surveys, groundbased uh uh geohysical surveys, IP and and the like to to kind of identify and advance targets through that through that kind of uh funnel of getting them up to a drill ready status and then doing campaigns of like uh target drilling on on some of these targets is it's limited to like one hole, some are three holes, some are you know six holes, that kind of thing. So we've had a number of uh I would say every every season we are doing a little bit of this. It's um some seasons it's been a big focus and we've had you know uh programs on the kind of regional recon work that are on the order of 10,000 mters. Other years it's like much smaller than that like less than 1,000 mters. Um but in the background what that's done for us is it's kind of like built this optionality and it's built this pipeline that has kind of slowly been progressing and the the the strategic purpose of that is kind of what you're saying. It's um it is to it is to sort of give balance to that um uh you know to to use a for lack of a better term the kind of Lison curve dynamics. Uh and so you know if we are uh going to be spending the next couple years at Berg doing some heavy lifting on uh geotech uh metallergy permitting type stuff um there's there's absolutely I think a strong argument to be made that okay well why while you're doing that and while the while the kind of um picture of value around Berg is is kind of stabilized you're you you've kind of you put out a a pretty definitive marker on value in the form of a of a preliminary feasibility study and you're you're not you're not like you know doubling the size of the resource or whatever. While that's the case, it's like it's it's smart value creation to kind of go and use part of your uh your your financial and you know human resources during the field seasons to to to try and um advance some of the like uh you know earlier stage higher risk high reward type stuff. So um we absolutely will be doing some of that. It's it's not as if we've put out any clear guidance on that recently on what the pipeline of that will be, but uh part of that is because the picture hasn't changed in the last couple years. It's like the pipeline the the um the pyramid looks the same as it did a couple years ago and it's uh it's targets like Burgett, uh Sylvia, Sabola. Uh we've got some like completely unrillled tested uh geohysical targets from a ZTEM survey we did a few years ago that are um again they're not drill ready. there's more surface work to do, but I I fully expect that we'll see some of that work advanced um in the coming uh year or two. I'm not going to give any guidance on the size of programs or budget. It's it's totally down to cost of capital. So, um, to tie this back to to valuation and dilution, it's like I think myself and the board is of the view that surge is very undervalued. And so, like running out to go and raise order of magnitude $10 million for this type of use, it's it's hard to make that like I don't think we would lean in favor of that decision at our current valuation, but at a much higher valuation, uh, you know, the higher the valuation, the easier it becomes to, uh, to make that decision. It's all it's all about, you know, um are we diluting our shareholders interest in Berg for the purpose of rolling the dice on a much uh much riskier um uh bet and yeah, it's just uh there's that kind of constant um tension and and interplay. So, I think we've been prudent about it over the last few years where um when we when we've had the ability to raise bigger amounts of money uh from a price and market conditions perspective, we've allocated some good um uh we've done some good programs on making these like long-term investments on big recon data sets. uh we've we've kind of pushed things forward slowly but surely on the target drilling side of things and that's built for us uh a good amount of optionality to um strike when the when the market conditions uh permit to to really um advance those types of things and I uh yeah and like when you're in the field you've got fixed costs right so we will be in the field every year for sure because we're advancing a project through feasibility like you you you have to be out there doing um environmental baseline like there's always going to be stuff going on at Berg. So we'll have like a fixed cost around that and so it's a question of oh can we can we add you know 10 15 20% to the field budget to have some targeted work done on advancing you know key high priority uh exploration targets. That's kind of always been our philosophy and we have done that every year and that will continue. >> What about in terms of timing? How long do you think you're not going to have to raise capital for? >> Um, so the the 10 and a half 10.4 million that we raised, I guess, plus where our treasury was at the time, which is around a million bucks, um, will give us runway to the end of next year, uh, strictly on the kind of Berg deliverables around PFS and EA readiness. So, uh yeah, I think if we if we wanted to do like a much bigger um campaign next year, uh around around um yeah, like the heavy lifting like higher cost stuff around uh around drilling, whether that's at the B deposit or regional type stuff, you know, we we would need to um to top up before then, but uh but that's not a definitive like we may not uh decide to do that as well. Mhm. Do you think come time to do it, is there room for maybe you can remind me actually what what percentage of the revenue is from precious metals right now and and come time for you to raise capital would there be room for streamers? >> Um so the the percentage revenue from the precious metals uh in the pea I mean we'll talk about this I'm sure but the metal prices are way out of date particularly for those uh those metals. Uh so I think it was like 12% uh was the revenue contribution from silver and gold. Um I think if you run like either spot prices or you know something approximating what would be sensible long-term prices in today's environment that number goes up. It is it's not a it's not a crazy increase. It probably goes from like 12% to like 15 or 17% something like that. Um, so this is still very much a copper molly project, um, to be sure, but there's a there's a nice little byproduct there around the precious metals. Um, my philosophy on that stuff is, um, you know, selling streams and royalties, that's like you can you can kind of do it once. Um, uh, and you're going to get the biggest bang for your buck if it's part of a project financing type thing. And um yeah, like I think these types of projects like we're we're in the business of uh of advancing this using risk capital and um and ultimately uh you know I think a I think a very common um outcome for these things is a is a change of control M&A type transaction. I'm not saying that's our that's our objective here, but that's a um just speaking in general terms that's like a common um outcome for these types of uh projects. And so it would be it would be a little bit illogical for us to impair that uh to to make that outcome less likely by impairing the asset with a cumbersome royalty or stream prematurely. And without naming names, uh there are there are absolutely assets out there today that have have that effect to them, right? where it's a good project, good asset, sold royalties and streams too early and probably impacted the ability for the for the project to find an ultimate home or a buyer and and maybe if it ever does, the streamer royalty will need to be uh restructured. Anyways, so I I think there's a yeah, there's a bit of a history of that kind of thing happening in in in the mining space. And yeah, so again at a super high level bit of a uh keeping things very general, I think um uh like I I think if you actually if you want to sell a royalty or a stream um doing so toward the end of the of the arc before you get to a construction decision, like the the later you do that, the better in terms of um knowing what the ultimate like ownership um you know sponsor group is going to look like knowing what the project financing uh pool is going to look like. I think it can fit in very well as a project financing tool. Um but uh but yeah, we're not at that stage yet. So why why would we give away a project financing uh you know tool in the toolkit simply to fund you know higher risk uh earlier stage stuff. I I'm just of a view that that stuff should be is is better done by um you know risk capital partners uh uh early on. That being said, there's a lot of kind of like hybrid solutions that we've seen where some of these uh uh royalty and stream finance providers take equity uh in exchange for rights of first refusal, rights of first offer on those sorts of things. And yeah, those are those are good instruments, right? like um uh getting getting sort of an e equity um investment from one of these partners or one of these players in exchange for saying hey if we ever do a streamer royalty you'll have first kick of the can that that's a very uh you know fair and attractive thing in uh for for a project at this stage. >> Yeah, I think you and I would have spoken about this uh last time but please remind me what the um what the change in control fees here are. Um so it's uh yeah for the named executive officers which is like the management team four individuals um it's going to be uh different for each person but um you know per the terms in their either employment contract or consulting contract or uh you know just whatever the like minimum statutes are for not for change of control but for like termination provisions. Um yeah, it'll be sort of a uh a multiple of their annual uh annual income both on the uh base salary and kind of bonus. So again, I don't have all these memorized or in front of me, but uh order of magnitude, it's going to be like, you know, whatever an individual was paid in the last 12 months, salary and bonus, it would be sort of like onex that. So um you know, they basically get paid a year of of what they what they were previously earning as a change of control. Uh and then uh yeah unvested uh RSUs, DSUs, etc. vest essentially. So um >> which is both of those things are locked standard and pretty fair, right? Like uh in the case of a change of control, you're losing your job and so it's a it's a bit of a kind of normal severance uh package. >> Uh unless of course you're like going on like sometimes there's change of controls that aren't really change of controls. you're sort of like mer doing ane or something and the the the board changes but the CEO stays the same like there's there's obviously like exceptions to to these things but um uh but yeah it's sort of a a severance in terms of like cash that you've been earning for the last year and then yeah the point of RSUs and DSUs it's like uh they are um they are like long-term incentivization securities right so it's like to incent people to stay in the seat and So if the company is deciding that you can't stay in your seat anymore because we're doing a transaction that's in the best interests of shareholders, well I think it's makes complete sense that uh those securities would uh would vest and you would you would treat them as if they were uh owned as as stock. You obviously have to pay pay tax on them and what have you. But uh yeah, >> I agree uh not on the tax thing, but I do agree about you uh deserving a um you know deserving um deserving a change in control fee there. What what I'm really checking for here leaf just as a bit of a background is I'm a firm believer of um incentive being one of the most important concepts in finance and so it's essentially trying to see you know what what drives you. I do think the value of your equity would be higher at that point. So that's essentially what I'm checking for here and that's why I'm asking about a change in control fee. Um you had mentioned uh that your fuel program would run up to late September. So I I assume it's done now. Um you said 5,000 mters. How did it go? What did you get done? Where was that 5,000 mters? Talk to me more about that. >> Yeah, it went uh it went very well. Um so there was uh four holes drilled into the Berg deposit for uh resource conversion infill purposes. Um, and those were Yeah, I mean like we we've got a long longish inventory uh of planned holes for these purposes and it's just a matter of you know moving down the priority list and kind of ticking these things off as as we go. Part of it is you know where in the deposit we need to infill like where the inferred blocks are where etc. part of it is like pad construction um you know logistical considerations um you know the costs and just sort of challenges around building uh new pads and kind of permit constraints around that. So yeah for each each year over the last three years we've done um fair bit of this advancing the infill drilling uh work and uh and that's kind of how we go through the list. Um this year we did um so what I mean by environmental geochem drilling that is uh again at the simplifying a bit it's like drilling into the waste rock in the pit. So we we've got a known we've got a known volumetric envelope in the form of an engineered pit shape. Uh there's a block model that sits within that pit shape and then kind of everything outside of the block model that's in that pit shape is deemed waste or considered to be waste. In most cases it's it's just doesn't have a lot of drilling into it. Right. that's uh you're theorizing that it's waste because uh the it it it hasn't been drilled and it's you know the grade is kind of uh diminishing as you approach the the um the margins of the deposit. And so uh but but over time that waste envelope will get more drilling into it for both geotech and geochem purposes. And there's of course the the chance of upside surprises in the form of uh you know discovering new zones hitting hitting distal veins things like that. So uh but simplistically like the waste envelope in the in the deposit is something that when you when you excavate it when you extract that you got to put that waste somewhere. You're either going to put it into a waste pile or it's got to go into the tailings facility. And the the differentiating characteristic there is whether it's potentially acid generating or not. So it just has to do with, you know, sulfur abundance in the rock. And so you got to put some drill holes into it to uh to to understand that um model the the kind of sulfur in in the rock. And >> again, it's relatively simple with these big porefree systems. You've got a big pyite halo. And so if you're in if you're out of the orzone but in the pyite halo, nine times out of 10 that's going to be potentially acid generating rock and then at some point you get out of the pyite halo and it's and it's non acidgenerating rock. So it's really just about kind of putting in some drill holes to characterize uh what that the shape of that boundary and just characterize how it kind of attenuates over uh radially as you as you move out. And so, um, we've we've done over many years a bunch of surface work to characterize that. And, uh, last year when we were doing geotech drilling, that was, um, a lot of stuff in the margins of the deposit and moving into the outer reaches of the of the pit, but a lot of that was like a lot of that was angled drilling. It was pointing down to hit the pit pit rim at a at a 90° angle effectively. Uh, and so you're you're missing a lot of that like large volume waste that kind of sits in the upper portions of the of the pit cone. And so this year we went back and did some dedicated drilling into that waste envelope. And we we attempted to do something that we thought was going to be um much more cost-effective and efficient, which was using underground rigs uh secured against the Berg has a bit of a pit shape to it already. We see that in a lot of, you know, imagery that we put out. But um so we got drill roads along the hill and we're and we were drilling into this waste envelope which because of the erosional profile of of the Berg deposit because the deposit kind of sits in a what looks like a cone-shaped um depression or or hill side already. Uh drilling into the waist is actually an uphill exercise. You're drilling up the up the slope. And so we used underground drill rigs anchored to these drill pads on the side of the hill. and the the the angle of the of the drill drill hole itself was going up basically. So negative angle drilling and um yeah we we completed uh four holes successfully of that method but it was um a hard work like I think there's just a lot of uh technical challenges with uh executing it. So I think for future um data collection in that realm like there will need to be more of this uh before you get to the end of the feasibility road I think we'll probably you know do some helicopter supported uh drilling where you you bring a rig up to the top of the hill and drill down instead of up. It'll probably end up on balance being cheaper even though you're using a a helicopter to do that. Um but anyways for for that program we had some good success. got the core we needed, got the data we needed. It's in the laboratory now doing uh doing the you know geochem u humidity cell tests and and whatnot. And then the final piece was geotechnical drilling in the infrastructure area of the project. So last year we had a geotech project uh geotech program in the pit. So that was as I said intersecting the the the final uh pit shell um to to understand to do some tests and understand rock mechanics at that um you know uh at the kind of final uh pit limits. Uh same thing has to be done along the you know the whole corridor and the the whole area where you're going to be building you know the the mill foundation the conveyor route um the where the camp will ultimately go etc. So uh we just acquired a bunch of the tenementss uh that underlies that area in the last year. So this was the first year that we were able to actually do drilling on that uh on that ground. So we had about a dozen holes uh completed this year uh for that portion of the program. Um the these are much shallower holes because this is this is we're not investigating anything to do with a or deposit. It's all about in it's all about um estimating uh or or um learning about the bedrock in an area where you're just going to be building stuff at surface. So you want to know how deep the bedrock is and then you want to drill a few meters into the bedrock to know if it's, you know, all fractured up and what have you. And so in this particular area, it's like yeah, you got till cover that ranges from a few meters to a few tens of meters and then you're drilling a few meters into that bedrock. And uh we didn't see any surprises like the the depth of that till cover was as expected. Uh and so the yeah the depth of most of these holes was like on the order of 50 to 75 m. So you know a dozen of those holes u uh to get to like you know whatever thousand thousand plus meters of uh of that type of uh drilling. So yeah lots of uh lots of data lots of um I guess important impactful stuff for uh for prefeasibility engineering work. Um, but because of the different use cases, that's why the total isn't, you know, tens of thousands of meters. It wasn't it wasn't a campaign of dozens of infill holes into the deposit itself. As a result, the news flow coming out of this stuff, which should start here pretty soon, you know, we'll obviously have a, you know, a couple press releases about those infill holes in particular that highlights the, you know, the grade in in some interesting areas of the deposit that are 200 meter infills, that kind of u that kind of thing. So, it's it's uh it's impactful stuff. Uh and then in parallel with that there was a a resampling campaign done on some historical core from the center of the deposit. So the the the kind of spatial center of the deposit is um uh Berg is a bit of a donut-shaped uh mineralized zone. So you have an intrusive stock in the middle and then uh you know veins developed into the into the surrounding wall rock. So most most of the metal sits in the uh that that kind of vein envelope in the wall rock, but the intrusive stock in the middle is is mineralized as well, but it's like it's weakly mineralized. So it's not the juicy stuff. And as a result, a lot of the historical drilling done at Berg in the early days of its um of its uh of it being drilled out, for obvious reasons, when you're doing exploration, you you're chasing ore, you're chasing economic mineralization. So, a lot of the drill density is in that donut and you've got uh comparatively less drill density in the uh in the center and the uh a lot of that historical stuff was yeah like the QAQC um history around it, the assaying for precious metals, a lot of that stuff has just changed over the years. And so, uh, I think a lot of this, a lot of these, a lot of these drill holes are are used in our current resource estimate for grade estimation. So, you've got above cutoff grade um, mineralized material in that center of the doughnut. But for categorization purposes, like whether whether the QP says it's going to, you know, meet the criteria to be inferred, indicated, or measured, it it's categorized as inferred because of the uh QAQC type stuff. And so we've gone through and uh resampled a bunch of that stuff this year. I think it was like 20 holes, 18 17 to 20 holes. Uh I don't know the exact number off the top of my head. Um but yeah, easy, lowcost work. uh go find this stuff in the coreyard quarter quarter uh the core uh have it reassided. We get some new data for silver and gold that may not have been there from the old stuff and we get to uh revalidate the QAQC under modern standards and it kind of will will meet that criteria for C categorization. So it's for for purposes of you know infill drilling or inferred conversion it's equivalent to drilling those same holes as if we did as if we did it this year from uh from scratch. So we're going to get some big impact from that uh in terms of uh inferred conversion and all of that matters for a PFS because if you if it stays inferred it's treated as waste in in a PFS which obviously you don't want right like it's if you know it's above cut off you know you know it's there especially if it's like very obviously in the mine plan it's kind of like you know in the middle of the in the middle of the pit you want that to be treated as uh uh as as what will be called ore once we're uh once we deliver the uh the PFS. >> You said a lot of data is about to come through here sometime soon. Um, yeah. What does that mean for your news release cadence? When will some assay start coming in from that and then how far how long are you going to have news for essentially? >> Yeah, I mean I think most of the assay uh stuff will be delivered before the end of the year. I it's it's all kind of coming in in batches now. So um yeah for this type of stuff batching it will be a function of clear communication. I don't think any of this stuff is material. Um so we don't we're not trying to drip feed stuff out. It'll be like how do we how do we batch this so that it is like a coherent uh you know uh story to tell or you know kind of bit of information. So, as I said, four infill holes and then like, you know, 17 18 um uh resampled uh batches of core. So, we'll we'll get all that data in and and figure out how it uh all ties together and put that out in maybe a couple press releases uh this fall. Uh I I think the you know, the laboratory work that's going to be going on on the geo tech and geochem stuff uh will will take more time. So, you know, if if there's newsworthy summaries of any of that to to to come out, that'll be, you know, maybe into the new year. Um, and and then yeah, I think the uh that's potentially it, right? Like the obviously the huge catalyst coming up is the delivery of the PFS. So, um there there isn't there isn't uh it's a little bit down to our discretion if we if we want to put out just general updates that I think help to help to kind of lead people in the direction that we're going. We we obviously will uh we may choose to do that a couple of times between now and the delivery of the PFS to just sort of say here's how things are going. Here's you know here's how the information has changed from before to where it is and and what the PFS is trying to achieve. um as opposed to just kind of you know plopping the whole thing out uh at at the end. So uh but yeah the the the big all of this is in service of delivering the the prefeasibility study which is kind of the big one which will be uh yeah targeting um uh first half of next year um the the sooner the better the earlier the better obviously. >> Yeah I was wondering if that timeline has changed but first half of 2026 so it's not changed. Uh that's that's good. Why would I own the stock in the meantime? It's kind of the question here though. If if I if I didn't know it today, um and you're entering what some people would call the boring part of the Lan curve. Um yeah, what do you how do you how do you create excitement, I suppose? Or how how do you create how do you close that valuation gap? That might be a bit of question. I know I'm it's too many questions that I'm asking, but I'm trying to make it sound like I'm smarter than I really am here, so give me some rope. People will say, "This is the most undervalued copper developer out there. Why is that the case? How do you close it?" And essentially that goes back to what I just said, like why would I own the stock between now and and you know the PFS if if um if again you say that there's not, you know, major catalysts or anything like that? >> Yeah. I mean um excitement and uh and you know news news releases do not equate to value as as you know right like uh they're they're a communication news releases and catalysts are a communication element around like the the the value creation process but uh yeah like I I think the question you're asking is is also you know you're you're describing the psychology of a lot of investors speculators as you like to call them in in our in our industry which is like uh you know people trying to time the market to the nth degree, right? Like uh I'm going to I'm going to you know park my money here for this week because I'm expecting this news release that's going that's misunderstood by the market. I I know it better than the market does. So there's going to be a a pop there and then I'm immediately going to go park it somewhere else. And so it's this kind of like perceived investor psychology that people can lily pad hop throughout the the you know the calendar of catalyst events from a bunch of uh mining companies. I I don't I don't know how that how well that works across the the the business as a whole. There's probably some very talented individuals that uh that can can do that. But um yeah, I don't know. My my attitude on these things is I take a much longer term view, which is that we're we're doing something in the in the mining space here that is pretty vanilla. It's pretty uh you know, like we're working in a in a in a commodity environment that's obviously got bullish fundamentals. We're uh we're doing the very obvious uh quality work that you need to do to derisk these things to uh to surface value. You know, de-risking is also like uh that that comes through in the form of like, you know, multiple rerating or reductions in discount rate, whatever you want to however you want to like theorize what that means. It's like if you have if you have something that's trading at like 1% of NPV right now and you and you go and deliver a bunch of like real scientific work that shows, oh, all these assumptions are actually pretty good assumptions like this is less risky than than you know, we are derisking it. we are reducing the risk in what's going on. There's there's a there's just like logical uh you know there's finance logic to suggest that that 1% of NPV should just like increase over time to 2 three four five 10% of NPV. Uh so I think that's kind of the the very simple pitch to investors here for for Surge is that hey we are uh we're we're a good project. Um it's always been good. I think u I think maybe the recognition of how good it is is is changing in real time. That's probably why our share price has done uh pretty well. We've outperformed uh handful of peers uh really really relevant close peers to us in the last uh year. So there's raised raised awareness over how uh the quality picture around this project, the uh the extent to which it's being uh derisked and and yeah, we've got a big catalyst coming up in the form of a you know, snapshot in time study that's going to kind of put a bow around a lot of this stuff. Um so yeah, like why own it between now and then? I mean, torque to just like macro stuff going on, I guess. like uh why own any copper stock uh between catalysts because uh uh because you never know when these reratings come. You never know when the market's going to move on these things and um yeah, we're just like we're objectively very cheap versus a bunch of uh >> uh comparative things. Um so that's that's a message I've had for a while. Um the stock has done pretty well in the last year, but it's there's still a huge huge uh gap between us and where I think uh some of our really logical like uh you peers are, right? Like projects that are at this kind of level of de-risking that have a lot of the fundamental ingredients in place. Um I I'd also say like on the BC side, um yeah, like permitting in BC is like I'm not saying anything that people don't already know. the the like unique aspects of BC as a jurisdiction for copper development are uh are squarely around the like the permitting topic right the a lot of these projects are in fact lower risk technically than other parts of the world but I think uh I I think there's an investor perception quite rightly so that there's you know unique challenges or unique um unique complexities around permitting so as a company we're very focused on on advancing that that piece of the puzzle. Like it's great to see the government uh and you know Canadian society as a whole uh you know starting to respect and understand the importance of these types of things. Um but we got you know rub the rubber has to hit the road for us in terms of actually getting into the EA process actually getting some concrete understanding around timelines and you know we we have aspirations to really you know deliver some positive outcomes there around you know bringing first nations uh uh partners into the fold there and just kind of showing a very a very clear pathway to how how we're going to kind of move through the EA process. That's just it is fundamentally different than what you see in other jurisdictions. Um but I don't I don't see it as a negative. It's uh it's like a it is it's more complicated but it's um it doesn't mean it's like riskier. It's just um it's I think not well understood and it's evolving but I think the way it's evolving is u is in favor of big important projects that are being pushed forward in the right way. And so, um, yeah, so that's another that's another bunch of catalysts that, uh, you know, going back to your question of why own the stock between now and then. Well, we're working on that stuff right now, too. I'm not going to give any promises or or guidance around you know timeline of delivery of catalysts around the permitting square but uh you know ourselves and all of our competitors in BC are yeah working away on this stuff trying to um trying to you know advance relations with the government and first nation stakeholders to try and kind of put these projects in the right uh the right uh pathway so to speak. So that there will uh there may very well be some um you know material material value creation events around that uh as well I would say >> and there's BC and then there's BC right I mean there's the golden triangle and then there's southern BC maybe you can talk to me or help me better understand how that changes things for you is it I mean either in terms of permitting or community or in terms of I know that like seasonality is is less pronounced in in southern BC Um, but what else is is different? Are there any specific challenges to southern BC as opposed to, you know, call the Golden Triangle or the northern part of the province? >> Yeah. So, um, I will just uh, and I know you you did a great tour around the province, so I I don't want to um suggest you you don't understand the geography, but southern BC to me would mean like uh, you know, down by like Cam Loops and um, like the very far south of the province. I would say Smithers Smithers and kind of where we are is um you know central to to northern BC but it's very much in the kind of interior of the province that has uh a lot of infrastructure pretty mundane topography like it's pretty easy to to get around. Um and I like to me that's the big contrast with the Golden Triangle which is like the Golden Triangle is like deep into the coast mountains. It's uh it's very rugged. there isn't a lot of infrastructure in place there. Uh but it's always been known as obviously extremely geologically perspective and I I think we're you know we're like we're we're we're in a period of time right now where there's been some big discoveries made there over the last 20 years. been a couple successful mind builds and uh you know the the political lens with the Tall Tan nation has uh progressed really successfully and uh yeah so it's like a really unique area of BC kind of because of all those ingredients like really epic geology and prospectivity really tough environment from a infrastructure perspective and probably one of the um yeah like it's a it's got a unique lens around it because you're dealing with a uh like a single uh nation, indigenous nation that is that has very deep capacity. They're they're quite sophisticated. They kind of know what they're doing and how to do it and they they they know what they want. And so it it works really well there. And so I think it's a area that um is winning a lot of investment um winning a lot of investment around exploration. But the flip side of that is like the hurdle rate is super high especially for copper for gold for gold less. So I mean gold you can build gold mines anywhere in the world because you can you know you got to get your kit in there once and then once you got a mine going you can fly your bullion out with or your dory out with a chopper. With copper it's obviously very different. You have to you need trucks or railroads or whatever to move your thousands of tons of concentrate out on a daily basis um or weekly basis. So uh so yeah when you look at the the actual practicality around building mine building base metal copper mines in the deep golden triangle the challenges around them are really all down to infrastructure like how do you get a road into these things how do you get power into them and and it's really a function of how deep you are like KSM is is in the process of really you know it's it's kind of breaking through the the threshold right now but they're like they're kind of like, you know, right at the threshold or right at the uh right at the start of the, you know, deep into the mountains and you compare that to like Galore, whatever, which is way in there. So, uh, you just sort of look at these things on a map and you can kind of tell based on like how deep into the mountains you are is like the deeper you are, the more difficult it's going to be for just obvious infrastructure re reasons. I think where we are uh is yeah I don't I don't want to uh it's a little bit semantics but we're not southern BC. There is um I just want to make that clear. It's uh it's kind of like uh the northern part of the central BC interior um and and kind of uh somewhat analogous to KSM. We're not like deep into the mountains. It's sort of like the very front uh the first one of the first ranges uh there. So access is pretty easy. the the prospect of building big minescale infrastructure whether you're talking about roads or power lines is very tangible. Doesn't mean it's cheap or easy or free whatever you're still talking about um you know building roads into the wilderness but the the scales involved are like orders of magnitude less and much easier than what you would be contending with in uh deep into the into the golden triangle. So that that to me is like the fundamental uh uh fundamental difference is is like uh access to infrastructure uh is is kind of the number one thing. Um and then yeah like the the First Nations lens as well is quite a bit different um elsewhere in the province. So you you have usually kind of overlapping uh title claims. Uh so you know multiple indigenous nations uh or you know treaty first nations bands that uh that will have uh yeah title claims traditional territory maps boundaries etc that overlap with one another and so you're dealing with overlapping title claims in particular geographical locations. Um I I think in the golden triangle that picture is uh quite a bit uh uh simpler because you're you're dealing with uh with one uh one party. So the the complexity for uh groups like us uh in many cases boils down to like and we're not alone in this picture. It's like all across BC is uh is like this and frankly elsewhere in Canada as well. Um but yeah, the the picture boils down to um yeah, advancing things in parallel or together with kind of uh um multiple multiple different uh groups like that. >> Yeah. Yeah. Um when I when I said certain BC, I suppose I was thinking just to the south of where I went in the Golden Triangle. Um >> and that's just an excuse for not looking too stupid on camera. Um, but are you guiding any numbers for the uh MPV and capex at the current metals prices or or whatever prices you might end up using for the for the for the PFS? I mean h how how much of a difference are we talking about? I clearly as I mentioned in the beginning there is some difference but how big of a difference are we talking about? >> Um yeah I mean the I'll try to simplify this for you know the the investor audience. So, um, yeah, like when you when you when you put out these studies, um, you know, part of the requirements under 43101 is like the sensitivity tables. So, you kind of show how, you know, for for each 10% change in one of the revenue inputs, metal prices, you know, how how fast does the um, uh, NPV change. So we we have that disclosure in our press uh presentation um front and center as it relates to the main metals uh copper and molly anyways. >> Um and so yeah like those are basically linear changes. So you can kind of just see like okay for every for every like 10 cent or 20 cent uh change in copper price or dollar change in molly price whatever whatever it is here's how the NPV changes. So you can kind of do the math and say, well, um, you know, if if if all else equal, if you were kind of running the pea at spot prices or I don't know, pick what pick what you think might be sensible long-term um, metal prices for those things uh, today. Um, certainly I don't think $5 is the right thing for copper. Probably, you know, $425, 435, something like that. Molly, on the other hand, has like been very sticky between 20 and 30 bucks. and virtually every, you know, study out there from, you know, bigger companies to smaller companies that have Molly involved in it, uh, I haven't seen anything below 20. Um, so I I think I think 20 is a safe floor for something like that. >> Um, and then and then silver and gold have been I mean they're like more than double where we were uh 3 years ago. So quite uh quite interesting movements there. Um, so yeah, you can kind of like piece together that uh it all LSQ equal and the PA if like you're just using new metal prices. I mean, I think the flip to my presentation here, but the um I think the like bottom right hand corner for the sensitivity tables on NPV, which uh is um yeah, I mean that's like five 520 copper and 1950 Molly. I mean, you're talking about $4 billion NPV and roughly 30% uh IRRa. That doesn't that doesn't take into consideration the changes in the precious metal prices. So, you'd probably get uh you know, an additional boost there. So, four and change NPV and probably, you know, low 30% IRRa. the the flip side of the equation is like again if there's no design changes from a from one study to another you know how has the cost environment changed so what where is cost uh inflation gone um and that's certainly not trivial right now like as we all know uh no matter where you are in the world today like we're we're living through an inflationary um period and so there's absolutely been cost inflation across the board for both you know capex and opex related items we're we're like certain aspects of that we're going to be shielded from like this is a project where a lot of the a lot of the power uh a lot of like the you know energy consumption costs are are like hydroele electricity so you're not like dealing with the same kind of like commodity price swings that uh you might see with things like steel and and I mean oil is obviously not uh super high at the moment but um uh yeah like the the the drivers of cost inflation are are there's a complicated story there. Uh but there's obviously been we've we've you can you can easily kind of witness cost inflation on realized capital expenditures and uh realized operating uh costs for these types of things. So um I so I think that's that's obviously going to pull those numbers back from the the upper bookend that I just mentioned from the sensitivity tables. Um and then the the third factor is like okay well what has also fundamentally changed and so for us a big one is going to be the the metallurgical recovery profile. So uh we have the I guess the way I described this before was the recovery um formula we used in the pea was we believed it was conservative. I think the results of our pfs met program have borne that out. We're likely going going to see um you know changes to the recovery uh profile here on the order of like you know five percentage points for copper and maybe um you know 10 plus percentage points for Molly the two biggest credits. So um you know macro pricing environment aside that's just like more metal per ton that you're you're recovering and selling. Um so kind of big fundamental improvement there. And then also um you know other physical changes will just be yeah like design changes. So the resource is going to be bigger. Do we want to make any adjustments to the throughput to the uh you know we've got more geotechnical knowledge now. Will the will the phase development of the pit um change in a more optimal fashion? Will the mill be located in a slightly different area? Is the conveyor going to be designed slightly different? So there will like we're not we're not totally changing anything. It's not like we're going from, you know, an open pit to an underground design or something. It's it's nothing dramatic like that. But there's lots of um lots of changes to the like physical uh parameters underlying the project that will drive impacts to uh NPV and and IRR as well. So, uh I I would I would say, you know, the the bottom end of the book end is I think should hopefully be the the pea numbers. I think uh we've seen enough we've seen enough like improvements on the macro side. You know, metal prices have moved higher than the kind of inflationary uh pressure underneath. Um plus we've delivered some good fundamental improvements. Um so so I think the PA numbers should be kind of like the the bottom book end. And then you know just taking the PA and running much higher metal prices through it will give you a sense of like the upper book end. And so somewhere in between is kind of where this uh where this thing should uh should shake out. We're doing a lot of important trade-offs right now around um sizing and kind of phasing of the project. And uh just simplistically like this is the this is a deposit that has more than enough mineralized material and you know hopefully our maiden reserve declaration will you know be at that at that kind of scale as well. like there will be enough quote unquote ore here to um you know it could justify like a much bigger throughput that uh is um you know kind of at that uh that Highland Valley type level or or types of throughputs that we see at some some bigger mines in Peru or or Chile um that's going to drive higher capex and so yeah we're looking at well doesn't it make sense here to look at a uh a phased development to just sort of have a phase one that's um something something smaller maybe even smaller than where the pea was and then kind of grow into a um a bigger a bigger um throughput so that you're not talking about a 50-year mine life. You're talking about something that's kind of more uh more more akin to where we were at the pea sort of 30-year mine life. So, no definitive answers on that. I'm kind of um I guess testing the waters by by saying that, but it's a it's a logical thing to be uh investigating at the stage of a pfS to to sort of ask the question, okay, you've got a bigger resource. What's the right size for something like this? And then once you know the right size, then there's kind of the practical question of well, um you know, what's the what's the right way to build into that size given you're talking about something something big? It's a it's a it's a big mind for sure. So it's not uh uh for for both and this isn't really just a statement about access to capital or you know things like that trying to minimize capex it's it's just risk management and this is something that even even really big companies uh uh you know they they look at it through these lenses as well. So even if this was a project that was, you know, owned by one of the biggest mining companies in the world who has no problem building and operating and and making capital investments of this scale, they may still from a riskmanagement perspective say, well, you know, uh, you know, it's all else equal. If you're going to have a cost overrun on a capital investment, you'd rather do that on a smaller one. And then once once you sort of get everything commissioned and all the kinks worked out, then you can add another communition line and and kind of increase the the size. And so uh there's kind of risk management there. And then it's it's also kind of community impact like you're you're going to go from a standing start to trucks moving all over the place and uh and you know huge hiring spree and stuff like that. It's um there th those kinds of impacts uh are are can be significant and there's a lot of sensibility in just saying yeah do we want to ease into it is it a prudent plan to ease into it uh through a sensible phasing um scenario as opposed to just going you know full 100% throughput in in one kind of two or threeyear construction period. So again no definitive answers on that yet. We're we're working through some of that stuff uh for the PFS, but uh yeah, once we get to the that study, we'll we'll we'll obviously have some u answers on that. >> How did you get the better metallergy there though? I mean, Molly recoveries are up significantly. What has changed? I mean, did you have to grind it to a smaller size? Um different reagents, longer? Yeah. What changed? Yeah, I would say um so a little bit of all that stuff. I mean not not lower grind size. The grind size has been pretty well established here. Um >> so it's more >> Yeah. Yeah. So um it's which is not particularly fine. I think we talked about that uh in the last discussion. >> Um I think uh it's more to do with like the how the prior work was was done and and this isn't a a criticism of it. It's just sort of a reflection of the you know practicality of the the historical work and um and the kind of period of time in which it was done and so forth. So the the real simple story was the uh one of the prior owners of this project called Terrain Minerals. They did like three rounds of um uh metallurgical test work in the 2009 1011 period I think it was and this was like roughly in parallel with similar programs that they were doing at Mount Milligan. So those are the two projects that they owned. Mount Milligan was in feasibility. Berg was like precoping basically. Uh and so they had like pretty advanced metal energy going on at at uh Mount Milligan copper gold system. um as I understand it kind of tricky tricky metallergy so they were you know really focused on that and but they were drilling off Berg at the same time uh you I you weren't as far as I understand you weren't um you know following the mining sector in that time frame but it was a it was a bull market it was a real big bull market in that uh 200 you know 8 to 10 phase and so uh yeah this company would have train would have been like you know operating huge budgets uh and doing huge drill campaigns is is kind of uh my my my memory of uh of that. And so yeah, they would have been generating a lot of or material and just kind of like you know piggybacked on what they were doing uh with the the Mount Milligan MET program to kind of do a standard orfree copper flotation circuit program for Berg and but they're they're very different deposits, right? like you're talking about Mount Milligan uh at the risk of oversimplifying is roughly like a 50/50 copper golds and Berg is obviously very different. It's like copper, Molly, silver. And so yeah, like I I think there was a handful of programs done. Um they were and then they were very focused on okay well we got to produce a Molly con so let's first generate a huge volume of bulk concentrate so that we can do you know a large volume of Molly separation tests and and then they so they put together a pilot plant to do that and I it just it like the pilot plant uh didn't perform the way they wanted it to. um which is I mean pilot plants are like um uh it's you know when you're when you're building a mill like for for operating purposes you give yourself a bunch of time to commission it to kind of get the kinks out so that it's like continuously operating in a in a well- behaved manner. The concept of a pilot plant is like kind of turns that on its head. It's like, well, let's do something instead of batch scale. Let's do it on a continuous basis, but we're limited in the volume of material we have here, so we're going to give ourselves like two days to stabilize it. And it just obviously doesn't work that well. It's like a pretty uh high-risisk endeavor. And so that's that's what happened. And so they had kind of subpar um bulkcon from the pilot plant that didn't really match any of the the proper test work that they did on a on a batch basis. And then they tried to do a bunch of Molly separation test work on that and it was just kind of yeah it wasn't uh wasn't the right approach. So um we have gone at it a bit differently here which is like just batch everything really really you know large number of tests uh trying to like home in on the uh the right reagent uh um routine the the right kind of approach to pH the right approach to agitation uh etc. And um yeah, nothing particularly novel. It's all pretty um basic off-the-shelf reagents. The grind sizes, nothing crazy. Uh it's not like we're doing anything um you know, there's there's no um things like autoclaves or or you know, super fine regrinds or anything like that. It's all pretty uh vanilla type stuff, but it was just uh yeah, kind of more focus on and a lot a lot of minology as well. So, as we were going through the uh the test work, you know, you get a test that doesn't perform the way you want, okay, send send that sample in for minology, make sure that you understand if there's anything going on at the kind of like, you know, mineral grain, mineral surface level that will theoretically predict why you're having that performance or not. So just better science and um yeah so I think just through really diligent efforts there taking our time no rush uh just kind of getting the right results at each juncture um yeah we we got we got great results and I think it's uh again this is PFS level like there will be much more to do as you go go to feasibility you want to replicate this stuff you want to better understand um what the actual mill feed will look like as you approach feasibility mind planning like you know what is the first year the first two years of actual milfeed going to to look like and just do a bunch of test work on on that stuff. Um so yeah there's there's obviously more to do but I think for prefeasibility level uh knowledge um the yeah we're super happy with the program we did as are the the other professionals involved at Senko and and ALS and ARM for that matter. So >> yeah, >> I can see that we've been at it for almost over an hour and a half actually. uh at this point and and you told me you had a busy day ahead of you and I've not been too respectful of your time here, but what uh what what what's going on at UT? Um and and has your opinion on it kind of changed since the last time we spoke in terms of what I'm really thinking about here is is does it have to be in your portfolio? Is there is there some value to be realized because I don't think you're getting value for for Berg in your share price now as is, let alone some of the other projects. So is there is there a different way to realize that value there? >> Yeah, I mean the the the typical uh like corporate finance approach to like non-core assets or or you know can you can you make an argument that you're not getting value for something and if so is there sort of some corporate thing that you can do to monetize it or surface value? I think that uh that's always a question worth asking if they are non-synergistic assets. Uh that doesn't apply here. So like if if UTSA was in a different country or whatever, sure we'd have a we'd have a you know proper think of that. Um I I think here it's like again we're we are in the we consider ourselves to be in the business of defining and de-risking like a big copper development opportunity, a big copper development business opportunity. And we think the like counterparties there that will ultimately be um partners in making that become a reality are the types of enterprises that value big land packages. They value big resource endowments um above the level where you have like a defined project. So, uh, I guess the way I would kind of I'd categorize this or the way I'd describe it is like, you know, a big mining company may look at the the asset portfolio that Serge has and say, "Oh, yeah, Berg is like a great um anchor to this district. It's a big project. Uh, it it screens well. Like the the economics are robust at a range of prices and it's like, you know, low risk. It's obviously got a a a ways ahead of it in terms of permitting and all that stuff, but it's a uh from a like engineering execution perspective like relatively lowrisk uh project and you know demonstrates a 30y year plus mine life uh and it's so so that's that's like the anchor and I think the types of mining companies that um you know look at something like that maybe they maybe they are not operating in BC today uh this would in effect be like a a new a new um jurisdiction for them either from the provincial perspective or even just like you know the local perspective. So to to to make a capital investment here to actually operate there uh requires developing a whole range of of expertise and skills relating relating to that area. And uh so it's great to have an anchor project, but it's even better to see that okay, if we if we succeed in this, we see that there's a pipeline, there's a pathway to having multiple growth opportunities here to uh expand our operating footprint or extend it in time. Uh so it's not just Berg with a tiny little postage stamp uh around it. It's Berg in this broader uh land position, broader kind of operating platform where you could have or or you know uh uh footprint where you could have you know UTSA as a secondary project that comes online in parallel or is at least something that says okay well we're operating there for you know 30 years we see enough you know mineral endowment there that either with UT or you know further discoveries that are likely to be made we could see this being like a you know 50-year district. Like that's that's kind of the um the really high level thinking that big copper mining companies uh you know often have about these things is they they want to see an anchor beach head, but they also want to see okay like if we're going to go through the if we're going to go through the effort of building something big, we want to see the potential to have expansions or just like you know optionality embedded in that. So hi for us hiving off UTSA to realize a little bit of value today and by little bit I mean our market cap is small. It's not like we would you know even if we monetize that for a significant percentage of our market cap that the proceeds from that would not materially change the kind of picture of what we're trying to to do. So it's a little like you know pennywise pound foolish. Think I I again I think we're in the business of trying to like make this as uh as attractive as possible to the enterprises in the world that um put their shoulders and their balance sheets into building these sorts of uh copper uh copper businesses. And I think the key ingredients for that are obviously you got to have a good project. You got you got to have like a meaningful uh anchor flagship project. But I think you know m maybe not uh sort of like the family feud thing maybe not number two or three on the list but certainly like four five and six would be big land package um you know pipeline of exploration opportunities you know identified targets big data collection that you've already done on that in the form of you know geoysics and other things and secondary projects that kind of thing. So, and you see this with some other companies that are in the market that are doing really well like um I think Mary MKA has has kind of that flavor to it as well. Um you know core core anchor project um but kind of like you know bigger bigger um thematic armwaving thing going on with some like really excellent exploration uh potential and I I think those are the ingredients that uh that you know major mining companies uh care about. So for us to for us to like um attempt to monetize that would strategically not make a lot of sense for us. Um and yeah but but beyond that our view on it is like is very positive and favorable. Like I I think the way I've summed it up uh in other conversations is, you know, if we were to run the ruler over it on a standalone basis to kind of put forward a standalone pea, um I'm sure we could derive some good numbers there. There's actually really good gold credit at at UTA. So, especially at $4,000 gold, like I'm sure we could come up with a mine plan there that is uh you know, much much smaller tonnage. like we could probably focus on like a 200 million ton mine plan at UT with a dedicated much smaller mill and brand it as gold equivalent or something like that and put put forward something that's uh that's pretty interesting. I wouldn't even rule rule that out as a as a worthwhile idea that we might uh do in some value recognition campaign in the future. But from a from a purely kind of like practical perspective, then we would be then we would have a project that's kind of competing with Berg with respect to you know questions like power supply questions like uh with regard to you know permitting and uh capital resources and first nations type stuff. So like it's important to internally know uh like have views on value like that and believe me we do. Uh but in terms of like raising a flag with the market on that kind of stuff you know I I I can I can make statements like this and kind of you know leave the breadcrumbs for people to think about that and do some of their own work and think about whether there's good value there. But it's it's kind of a different kettle of fish to go out and put a flag down in the form of a study that says, "Hey, there's a de there's a development opportunity that looks like X because you at that point you then kind of step in a you open a you open a door where there's kind of um follow through that's required or expected on that in the form of advancing it to the next stage. And uh I don't know if that makes the most sense for us right now. I wouldn't rule it out in the future, but I think having competing competing projects that are um uh is is something to be um uh just yeah kind of balanced carefully. And the last thing I'll say about it, I've been pretty transparent about this in the past. The special thing about UT is that it sits 5 km away from the only Karen maintenance copper mine and mill in in the province. the future of that is, you know, not yet uh uh spelled out or there's no guidance on that yet from its owner. I think that day will come at some point in the future. Their hands are full with Red Chris right now, which is approaching feasibility and is in the environmental assessment stage. That's a big project. Their hands are full with it. They can't really, you know, I think that's the reason why they're not uh why Huckleberry is not operating today. Uh but the real simple story there is you've got a mine and mill that is um it it's not done. There's definitely, you know, there's ore, there's reserves in place there, there's value in place there that will be turned on again. And in the natural course of these things, mills like that uh will, especially at when they're toward the end of their reserve life, they will start looking for, hey, what kind of satellite uh feed can we get to keep this thing um humming, especially in a high metal price environment, so that we don't trigger a big closure obligation or closure liability. So to to me, that's just a a very logical business um uh outcome. can't can't really dictate the timeline on it, but it it just feels like there's a there's a sensible outcome there for for that uh asset and infrastructure that's in place and UT is a very special situation kind of opportunity for that. So yeah, I mean investors looking at Serge like my my uh my refrain has been pretty consistent here. You can look at Berg, you can run the ruler over it on Berg and say, "Wow, this equity is pretty undervalued." And then kind of underneath that, you've got this this uh second string project at uh at UT, which is like a big resource endowment. Uh again, look at just the gold. Go to the technical report and look at, you know, the uh grade tonnage chart. Ramp the cutoff up really high. Look at what the, you know, higher higher cutoff portion of copper gold's uh resources would be. There's probably a pretty juicy uh interesting project there. Uh and it also sits right next to a mill that will one day be kind of wondering where the where the next 10 years of uh ore is going to come from. So huge amount of option value there that uh is uh is is just there for the taking with no uh it's not not really in our equity price today for sure. >> And I'm sure you and I will be talking about in the future as some of these developments um and some of these assay results and whatnot start coming in. When do you think the next time is going to be that you and I should be sitting down for for an update interview? >> Um yeah, I think certainly before the prefeasibility study is uh released. I I think um you know once we get some additional uh data disclosure out around some of our data that says like okay all of the drill holes that have been drilled since the last resource have been released. So here's kind of a picture of how that uh you know data has has changed. Uh and I think if we you know if we ultimately um render some decisions on uh on you know the size of the project and kind of are are uh in a position to give some guidance on that um you know beforehand in the form of a press release. I think that might uh make sense to to give some added color on that uh as well. So, I I think there's um uh yeah, there's probably enough kind of like fundamental stuff in the works to to justify a an interim update before the before the big one at the delivery of the PFS. >> Yeah. I asked you this last time as well, so I'll I'll ask it to you again, but what's been the biggest criticism you've received of uh Surge in the meantime um over the last four months? >> Um not a lot. Uh, Antonio, to be honest, um, so I I hope this isn't a unsatisfactory answer and I'm not I'm not blowing smoke, but um I I I think the pro I think what we're doing is pretty logical and I think we're being pretty methodical about how we go about it and I think we we frankly get some good feedback and and compliments on it. Um I think people recognize that uh you know this is this would be a big project in Canada and in BC. So in the in the wrong market environment, it's um uh I I think it would be hard to push on this, but this is but it's not that it's the right market environment for this, right? Like if you follow the political discourse in Canada, like this is a like smack in the middle of the bullseye critical minerals project that is uh relevant for what uh Canada is trying to do and what the province of BC is trying to to do. Um and it has the right ingredients on uh the infrastructure and kind of uh yeah like First Nations and community side of things as well. So um but it's yeah I mean it's a it's a big capital project. Um so you know I deal with a lot I I I talk to a lot of investors that I think are uh sometimes um you know are are their their questions relate to how to bridge that gap between you're a small company with a big project. um h how will you build this mine and how does ARM fit into this and um and what's the timeline? Uh and so the the truthful answers to those things are um are there's nothing wrong with those truthful answers. They're like the the they're like the absolutely normal things that you deal with in mining which is that uh you know junior mining companies are in many cases in the business of uh of you know designing de-risking projects doing that hard doing the hard work to actually create an investment opport an an investable construction decision ready opportunity and once you get to that point like lo and behold there's actually a market that is willing to pay uh you know real value for that sort of thing. So um I think you know we're we're in a emerging bull market in our bis in our sector right now and so there's obviously a lot of investors who are maybe new to it that uh haven't lived through these cycles and don't quite haven't quite seen that uh soup to nuts type thing happen a bunch of times and so they're looking at it more from a you know like a self-contained uh you know small business me mentality of like okay you you know how how will you raise all this money to build it yourself and like well you know that's that that is a possibility. Um, and we're but it's not the only possibility. And uh uh but we're we're obviously doing the right things in terms of talking to uh potential JV partners, potential offtake uh uh finance providers, potential, you know, project finance providers in order to kind of put those pieces in the puzzle as we go down the road. But but uh but even that's not always necessary. It's like sometimes you you have a project that you know you de-risk it enough you you kind of you put you put it on a plate enough that uh there's a market that emerges that um uh that can you know take it uh take it from there. Um so so it's that and then it's I think a lot of the a lot of the um the stuff around just BC right and that's a again it's an education type thing right like I think uh I think there's a lot of projects in BC that have been around for a long time and uh people have fatigue about it and they don't always kind of understand what what developments have happened under the under the hood and uh and how things are you know changing today versus uh you know 10 years ago and uh yeah I think on the I I think on the it's a bit of a catch all term, but on like the social license and permitting type uh type square. Again, I'll just emphasize it's complex in VC, but not in a not in a necessarily bad way. Like I think there's a ton of opportunities for just like win-winwin type situations emerging and the societal kind of attitude toward towards this is uh is as good as it's ever been in BC. And I'm not I'm not the only one saying that. like a lot of my a lot of my peers, a lot of the just kind of market commentators that have a BC lens are uh are in kind of furious agreement on that that there's um yeah, there's just a real a real positive attitude in the province right now to see uh mineral development uh advance. >> What about I ask you what you the biggest criticism is you might have gotten over the surge story. What's the biggest criticism you've got of me? What did you can't come here hoping to talk about that I've have not brought up or um you know something else along those lines? >> Hard question to answer. Again I I I don't uh not in receipt of a lot of that sort of criticism but um uh no I I think we've covered um a lot of a lot of waterfront here. Um what can I say? like I I think the I I think it's been a really interesting market environment in the last um several months. Um obviously we've seen that borne out in uh the the share price environment for a lot of these equities uh the equity capital market environment. So we were early to that. We did a financing as I said in July and I had a few folks saying, "Oh, you're you're lucky you got that deal off uh before the summer holidays and then lo and behold, August was like, you know, the one of the busiest Augusts probably ever for mining financings in uh the Canadian market. So, uh very busy like uh ECM time right now. And I'm hearing from lots of other corners of the market that um yeah like there's just a lot of demand for the stuff which is um maybe uh maybe indicating a yeah like a inflection point in the market uh you know asset rotation out of non-mining equities non non-mining asset classes uh into uh into our space and so um yeah I I'm look I mean the the seat I'm in is is a very is one of long-term thinking and I'm I'm not to use my earlier metaphor of like lily pad hopping. I'm just I'm not able to engage in that type of stuff and as a result I I kind of you know keep a posture that is is not uh really geared towards that type of stuff. I'm trying to I'm trying to make like, you know, 10 year decisions, 10 year bets on things and uh so that requires quite a lot of patience. And so everything that everything that I'm seeing, everything that I'm saying is like literally been the same thing that I have been saying and seeing for 5 years. it just feels like it's uh starting to actually um uh it's starting to become a little bit more um recognized or something like the you know uh feel I feel like uh I've been early early to to this particular thematic for um for a while but uh you know what I've been saying for many years uh instead of people disagreeing there's there's kind of more agreement with it now. So, I'm hopeful that there's a uh I'm hopeful that we're entering a market environment that's like more constructive uh for these things cuz um it's been it's been uh hard yards. And I think uh uh yeah, but I I think like just to kind of bring this back to maybe why you're why some of your listeners listen to this stuff like from an investment uh opportunity perspective. It's like and this will be a repeat of what I said on our last conversation like I I feel that at surge we have been adding value very consistently for five years and the the the rewards for that in the form of like you know equity market value have like really only just kind of peaked their head above the parapet and so uh I I think there's a a long road of opportunity ahead of us. So I'm very excited. Uh it's a it's been a fun year in that regard. I think uh delivering a catalyst like a prefeasibility on a project that could uh you know be in that snack bracket of like the largest develop copper development opportunity in Canada is a is a really great uh great thing to be a part of. We've got a really good team around us. Uh we're actually out hiring right now for uh you know kind of a VP environment role. So great to see the team team growing. So yeah, I don't know. it just feels like stuff's firing on all cylinders including the market conditions at the moment. And so um that's the right uh that's the right kind of um set of ingredients to just see stuff really really start to happen. So um yeah, I'm excited. It's it's a great opportunity to be, you know, sharing that with uh on platforms like this. So yeah, >> thank you so much for doing this. I really do appreciate you investing um yeah almost two hours again in me this time and I'm looking forward to our next conversation. >> Likewise. Thanks a lot. >> And as always, thanks to everyone for watching Resource Talks. I have a couple of more things to say though. The fact that this company was interviewed here today does not mean that they're necessarily a good or a bad company. I'm not here to endorse nor attack anyone. I am simply here to ask some questions. 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$2.1B Copper Assets With Growth Plans | Surge Copper CEO Interview
Summary
Transcript
Today on the CEO barbecue, we're looking for copper, malibdinum, a little bit of precious metals as well in BC together with Serge Copper. If you want a bullet point summary of this conversation and all the other CEO barbcues in your inbox once a week, go to resource.com and subscribe to our free newsletter. Now, the company you're about to hear from has paid us for the production of this video, which means that this is not research. It's an advertisement and you should treat it as such. Research is conducted by reading the company's official filings which you can find on setterplus.ca. And please only watch this if you absolutely know what you're doing. This interview is intended only for experienced junior mining speculators because mineral exploration development and mining is a very tough business where failure is the norm and should be the expectation. This is going to be a conversation that is general and impersonal in nature containing forwardlooking statements. I am not a licensed financial adviser and my business sells content producing services which also makes me biased in multiple ways. So before continuing on, please talk to an independent investment adviser with a good long-term track record because your capital might be at risk. If you're not 100% sure you understand 100% of the disclaimers I just showed you, please go to the last section of this video and do not consume this content unless you fully understand and agree with everything said therein. That said, Serge is a development company that owns a large land package in British Columbia where a couple of porefree deposits um have been discovered. They have a 2023 PE on uh one of those deposits with a $2.1 billion NPV8 and a 20% IRRa on it with a $2 billion pre-capex uh pre-production capex good for 30 years of mine life and an average annual after tax free cash flow of nearly $350 million for the LOM. All of which calculated at $4 copper, $15 malibdinum, $23 silver, and $1,800 gold. And all of which, of course, are much lower prices than the spot prices of the metals today, which is something hopefully Leaf and I can talk about later on. We don't really need the usual in-depth company overview here. uh neither a smell test because Leaf and I spoke about 4 months ago in what ended up being a 2 and a half hour interview covering everything from insider incentives, uh risks and challenges, growth opportunities, and so on. So, if you're new to the story, you cannot afford not to watch that interview first. Uh so, I'm I'm going to link in the description of this video. Surge is listed as uh Surge, so SURG on the TSXV, and uh with just over 345 million shares outstanding and an $80 million market cap. Today, this is a 22 cent stock with a 52- week high of 31 cents and a 52- week low of 9. The 50-day moving average is at 20.5 cents and the 200 day moving average is at 14.5 which means the stock is trading well above both of those um indicating positive momentum. 3mon average daily volume is about 430 although the 10day volume seems to be increasing with an average of almost a half a million shares. Again uh no long intro needed here so I'll just shut up already and leave I'll let you do the talking but first of all thank you so much for being here today. >> Thank you very much Antonio. I'm happy to be here and yeah, the interview we did uh earlier this summer got I got a lot of great feedback from it. So, um yeah, very happy to be another have another opportunity to be a guest on your podcast. I'm a big fan. >> Of course. Appreciate it. And um and and I'm looking forward to it as well. I'm um I'm just I got pretty good feedback on it because I think that's one of the longest interviews that I've done and uh it was two and a half hours and I'm I'm just happy that people still, you know, care about our our sector enough that they're going to and and a lot of them too. Um that they would actually go and watch it. So yeah, pleasure is mine. I see that you've had a couple of news releases since we last spoke this summer again about four months ago. So maybe just a brief summary. What have you done for shareholders lately? >> Uh yeah, sure. I don't have the the chronology of releases in front of me, so apologies if I'm overlapping or repeating anything I've talked about before, but yeah, the big um the big news for us uh in the summer was the delivery of a MET program. Um, again, I don't recall if I went into any degree of detail on that last time, but uh, yeah, it was about a year-long program that we were uh, running uh, as part of the kind of underlying technical work that is going to feed into the prefeasibility study for the Bird project. Uh, and yeah, the results were were very good. We're very happy with it. um robust kind of program. Lots of different um you know pretty large volume of material, large volume of individual uh tests across the kind of full spectrum of um you know stages of the flowheets and um you know the the different uh you know products that are going to come out of this thing which is a copper con containing precious metals and a and a molly. So, uh, you know, when we came out of the pea, there was there was some recommendations around this this, uh, particular piece and, um, and it's obviously been a a focus of ours as long as we've owned the bird project. So, there was a lot of preparation that went into it and I think we were aiming to achieve the types of results that we did. So, um, absolutely fair to say that we're we're pretty, uh, pretty happy with the results and, um, yeah, it'll point to both an increase in, uh, you know, prospective assumed recovery um, recoveries for these key metals in the PFS. So, so the corpus of data will allow us us and our independent engineering consultants to derive recovery formula that will point to kind of life of mine uh recoveries that are likely going to be materially higher than what we saw in the in the pea. So, that's obviously good, but uh it's also just a a risk reduction. This is a kind of key component to these types of projects. Uh and I think in the pea it was certainly an area that we were um we were conservative around for for the for that reason that there just wasn't uh the type of work done on it that we uh that we wanted. So I think we've uh really advanced that uh perspective on on the project. So that's probably the main item and then um we had a uh you know significant financing this summer as well. Uh the color there it was uh launched at the beginning of July. It was a um we've got a significant shareholder in a a group called ARM, South African Diversified Mining Group. Uh they uh prior to this financing owned about 15%. Uh we had kind of negotiated with them leading up to this financing to to have them increase their ownership to 19.9 which is the kind of maximum thresholds that you can you can do here in Canada. And um and so it was kind of a couple parts to the financing. One was that private placement um bilateral between us and ARM. Uh and the other piece was a public offering uh to existing and and just kind of normal uh market investors and um roughly half and half. So I think uh just under six million went to the um the or yeah just under six million went to the public market investors and about four and a half uh to ARM. So it was about uh $10.4 million in total raised. uh and the first trunch of that with the public investors closed at the end of July uh and then the the balance with uh ARM closed in uh in September and use of proceeds there the the guidance to investors in the market as a whole was this is going to give us runway to deliver the prefeasibility at Berg in the first half 2026 and allow the company to uh complete its EA readiness objectives its environmental uh assessment uh readiness objectives. So what that means is you know getting all of the uh environmental baseline data in place, the document preparation in place, the um you know kind of agreements and and soft sort of relationships and and engagement all advanced with both the regulatory uh entities and the government as well as our our First Nation partners. uh so that when we embark on that formal environmental assessment process, it's uh you know, we're kind of as set up for success as we can be uh in order to kind of keep the timelines uh moving uh ahead efficiently and and make sure everyone's all the relevant stakeholders who are going to be at the table are are uh kind of party to that. So, a lot tons of work is going to go into that. um you know we're we're sort of soft circling a a similar timeline to what I mentioned for the PFS there of uh of the first half of next year but um it's there's there's obviously a lot more things kind of external to the company in that case as opposed to delivering a prefeasibility which is just kind of you know down to us and our our engineering uh uh partners. So, um, we'll we'll be keeping the market, uh, up to date as we are, you know, up to up to speed on those timelines as we progress things over the winter, but, um, yeah, we're kind of up to our eyeballs right now in all of the, uh, PFS related stuff. And then in the in the middle of all that, uh, we had a field program as well. So, uh, you know, in in concert with the, uh, announcement of that financing in July, that's the usual time frame that our summer field season kicks off. So roughly from the July time frame to the end of September, we had lots of activity going on in the field, we had um you know about a 5,000 meter drill program spread across bunch of different objectives ranging from resource infill drilling um environmental geochem drilling, geotechnical drilling um you know various other uh activities going on around environmental baseline as well. So, uh, I think as I mentioned in one of my one of the press releases, it was a certainly a hive of activity, lots of different professionals, uh, at camp, uh, for a significant part of the the summer, there was no spare beds. It was, uh, it was a very busy uh busy busy uh, place. So, uh, but successful. We had a great field season, got everything that we needed to get. Um, I think everything's, uh, coming out looking looking the way we want it to. So, uh, yeah, company's posture at the moment is very much, um, burn rate has come way down, uh, with the conclusion of the field season and over the winter, it's going to be kind of taking, uh, taking stock of all of this technical data that we've gathered over the last three field seasons since the pea to pull it all together into uh, the next uh, you know, big economic study milestone in the form of the prefeasibility study uh, targeting first half of next year and advancing all the kind of EA readiness stuff in parallel with that. >> The 5,000 meter number there is interesting to me. So, we'll definitely be back to that. But, uh, and looking at your skin tone, doesn't look like you you were able to spend much time at the beach this summer either. >> Well, uh, okay. Yeah. I mean, I uh I got a bit of uh outdoor time for sure. I'm an avid golfer, so uh tried to tried to do a bit of that, but um >> Did you go to site this year? >> I mean, >> I I did. Yeah. But I'm uh you know in in contrast to probably a lot of your other um companies that you interview I'm not the the geo style of uh of CEO. I got a bit of a technical background but uh our our president and VP exploration uh Shane Bird he he's the you know guy that runs the stuff in the field and is uh very very hands-on there. Uh so I'm I'm more of an office office office rat and spend a lot of my time in the in the cities and doing you know uh conversations and and marketing and uh strategic type stuff. But uh yeah, I did make it to to sites um uh for about a week toward the end of the field season this year. >> Yeah. Um again, a couple of things to touch upon there. Really um four or five big points that we're going to be going through here today. Financing first though and and we'll talk about the proceeds and and their proposed destination here in a minute as well. African Rainbow Minerals Limited. So, uh, ARM is is giving almost 5 million bucks and are increasing their ownership to 19.9%. As you said, you're calling them a a strategic partner here, but but how or why is it that that that they are strategic partner given that again they're ASX listed uh and operate they operate mostly in South Africa, right? They produce iron or maganganesees, PGMs, coal, nickel I think, but not I mean not much to do with copper, right? So how are they how are they strategic fit for you? >> Yeah. Uh just to clarify for folks that JSC listed, not ASX. So they're they're listed on the Johannesburg Stock Exchange. That's right. Um >> yeah. Uh so headquartered in Joberg and uh yeah, kind of uh rich tradition there in uh South Africa and and as you mentioned mo most of their operating assets are are in South Africa. uh they've got some sort of downstream uh refining assets in Malaysia as well and uh they do have a history um you know many years back of uh some uh you know assets outside of South Africa in continental Africa in places like Namibia, DRC uh Zambia um etc. So uh yeah the current snapshot of the platform though is is very South African uh centric and yeah they are a diversified mining company as as uh as you note with exposure across a bunch of different commodities um no no operating copper exposure today which uh I think interestingly is a is to some degree a expression of the geology of South Africa. I just don't think there's a lot of uh opportunities to to to do that in South Africa. there aren't a you know there isn't a huge amount of um uh you know known deposits or geological environments that are perspective for big copper deposits in in that country. Obviously if you go a little bit north into uh Batswana and Namibia and then you know further into the uh the copper belt that changes. So they've had um they've had uh copper assets in in the past uh but uh divested those and so the platform you know as it currently is configured uh doesn't have an operating um exposure to to copper. Uh but as a diversified mining company I mean I would I would point to examples that probably all market watchers are familiar with in recent years of companies that are not incumbent players in the copper mining business. uh either executing on transactions or at least kind of rhetorically pointing to that. And that would range from gold mining companies to uh yeah, you got some uh you know examples that have a lot of um institutional overlap with ARM like uh like Harmony. Harmony is a sort of a related party. They've got ARM has a big shareholding in Harmony. uh they share some some uh you know directors and so forth and and Harmony is an urst while kind of gold mining company out of uh out of SA but um has made some you know big uh big acquisitions in the copper space in recent years and yeah so I think there's a this is uh I think one demonstration dare I say proof of a thesis that I've had for a number of years which is that um you know the copper thematic the the thesis around copper the the bull market in copper is I think a uh a a bet a thesis that um a lot of people in our industry share um and and it's been building for many years and I I think it's starting to gain real momentum now but it's been brewing for uh quite a long time and I I think the basis of it is that uh a lot of people strategically see there being excellent supply and demand fundamentals in that market but perhaps perhaps of equal importance is it's big market right like I think you can look at things like rare earths and graphite and things like that and come to a similar conclusion that there's excellent supply and demand fundamentals but uh as everyone or as as people who work in this industry know uh a lot of these minor metals are really small markets and uh in many cases when you have market fundamentals developing in a positive way the way that translates into the into the corporate development or sort of you know new mindbuild type uh type, you know, opportunity set is it's a race to the finish line to get kind of one project built because the the market can't even handle more than one or two mines. So, copper is very different, right? like there's a there's a depth to the market. I think a uh a a kind of fact pattern around it that we need the the the world's needs to produce a lot of this metal in order to achieve a a wide range of you know uh social development energy production development um just GDP growth urbanization etc etc I heard this from many people I'm sure but uh in order for the world to achieve a bunch of this stuff we need to mine a build a lot of new copper mines and so there's there's a big depth to that market and so I think a lot of diversified miners are really keen to get involved in uh in this this space and ARM is no exception. Uh so why do I see them as a strategic uh partner for us? Well, they are a they're a mining company. I I sort of use a very specific definition of the term strategic investor, which is that it's a uh yeah, it's like they're not a financial investor. They're not the type of uh investor that is um uh passive and buying simply to see their their um the market value of the shares that they own go up in price with an intention to sell in the future. Uh it's very much a um long-term operating investment. They are a mining company that's in the business of um building and operating and holding mining assets for the long term. their investment in Surge is uh building optionality for them to do that. I don't think they they don't view it as one of these things where it's like if the share price gets to some level they're going to liquidate and move on. They don't have a portfolio of uh of similar things. So their investment in this type of thing is really around assessing it as a uh from a kind of build own operate uh type um uh type type perspective. And I think importantly again words have meaning and and matter. So when I when I use the term strategic investor like that that signals to investors a few things and and there there's there's kind of two sides to it. On the positive side it's like a uh there's validation endorsement. Um obviously a highly technical group has run the ruler over stuff and come to a determination. But there's also agreements that come in uh that that come along with these sorts of strategic investments that you know a you know if we had a similars sized investment from a purely financial counterparty um you wouldn't expect to see the same agreement or or rights being granted to that party. But you often do in these, you know, quote unquote strategic investments where the counterparty negotiates for protections, um, in some cases, uh, you know, first look type rights, um, that sort of thing. So, I I I think the, uh, I think the term strategic investor is really meant to, um, to communicate and signal, uh, those sorts of things. It's like there's there's a there's things that fall into both the positive and maybe less than positive um uh bucket with regard to uh you know validation on the positive side, technical support um all that stuff. But you're also you're also granting some unique rights to a counterparty that you wouldn't uh otherwise uh you know see or or be doing with a a purely financial investor. I I do kind of get it from their perspective, I suppose. But what about from your perspective? What are the synergies that you would have having them on as a strategic as opposed to um as opposed to someone else? Yeah, I mean um they are a uh a a company with a balance sheet and free cash flow generation that uh is in the I'm repeating myself here but they're in the business of building and operating mines. So if you know our take for example our flagship asset at Berg if it ultimately gets to a construction decision, they're the type of group that uh you know could could be involved at at really any level of of ownership. And there's lots of ways to structure these things and we can get into the weeds on that if you want. But they're they're the type of group that um uh can be uh yeah brought to bear in terms of um providing balance sheet depth and relationships with you know many of their operating partners that they have in their business. So if you look into the details of how they operate their uh their assets in South Africa, effectively all of them are in joint venture with uh a wide array of multinational mining enterprises. Um the likes of you know Glenor, Nurilk, um you know Anglo over over different periods of time etc. Valet over different periods of time that sort of thing. So lots of relationships there. Um a lot of familiarity with building things in partnership. These sorts of big porefree copper mines uh they are frequently done in uh in in joint ventures. Right? If you look at the uh asset level ownership of a lot of these big copper mines, whether you're talking about the ones in BC or Chile or wherever, you often see, you know, one or more mining companies, uh maybe like an offtake partner, uh you know, a company that operates smelters in Asia, that that sort of thing. So >> um again they're the type of group that could very logically and easily fit into that kind of uh kind of mix either directly or through their ownership in uh the top code. Now that's that's you know that's down the road right right now this the ownership Roundberg is very simple Serge owns 100% of it they own 20% of Surge they're providing financial and uh and kind of strategic or technical support uh to what they're doing u I think more in a more nuanced fashion though um yeah like they they're the type of group that could back surge into um you know really interesting corporate development opportunities that may uh may arise for us in the future where um you know more special situation type things where the type of capital outlay is maybe significantly smaller than what I'm talking about for the green field development of something like Berg you know something like Berg would which the usual way these things are financed would be uh big corporate finance or sorry big project finance facility uh you know JV equity comes in if you look at what Hud Bay just did at Copper World they sold 30% of that development project to Mitsubishi for a big number. So I think they they're bringing in 600 million for themselves and then that that party will you know continue to contribute their proratic capital. Um and yeah, so there's there's lots of sort of standard ways in which these big capital nuts are ultimately whittleled down through uh through, you know, project level debt, maybe something like a mezzanine type product like a stream or a royalty uh partnership uh JB type stuff and then and then kind of the ultimately the the partners are contributing um uh equity. So that's the case for Berg, but uh we we may have other types of opportunities that arise for us that are of a more special situation type nature where it's it's more rifle shot um you know smaller chunks of capital, but they would be opportunities that would see us uh yeah maybe acquire um more mature but smaller assets. Uh and you know from the ARM perspective uh it's the type of thing where they would derive a lot of value from it in terms of um being able to you know uh leverage surge as a vehicle to um uh acquire something interesting like that in in a jurisdiction that they do not operate in. And vice versa, we would drive a lot of value from it in terms of that uh backing that uh you know financial and um operating experience uh type backing. And in that in that realm I draw a very distinct uh comparison against what probably a lot of people in this industry are more familiar with when they look at strategic investments which is these bigger counterparties um like the you know in the gold space AGO is really well known for this in the copper space tech is really well known for this. So these big um you know industry leaders in Canada who make strategic investments in a much more kind of portfolio broad sense where they are investing these kind of chunks of capital across like a dozen of these things and uh there may be some rights involved there. There there's obviously um you know uh technical committees and prata participation and and what have you but uh but there's also a pretty long history of divestments as well. So they've kind of, you know, seen these things grow up into their own their own things. So I mean Orllo is a a very successful example of this. In the case of Agniko, uh recently they made a pretty substantial divestment of a of a position that was, you know, quite successful uh for them. And so yeah, I think those those bigger companies that are doing this on a portfolio basis, I think the relationship between the junior and that parent comp or that larger company is um is a is a little bit uh different than I think what we are aiming for and ultimately experiencing with ARM, which is a yeah pretty pretty honest um exchange of strategic value. like we're we're able to bring strategic opportunities and um and insights to to them uh with a Canadian lens and vice versa. they're able to bring to us um you know kind of explicit balance sheet uh depth um on a on a look through basis and uh and credibility when it comes to operating capabilities that are are maybe not as uh readily apparent when you just kind of look at what surge is today as a junior mining company that's pursuing you know a prefeasibility on a big copper project >> theoretically hypothetically forward-looking being speculative and all that, but would Canada be happy with potentially giving, you know, potential control of such a large asset within a strategic commodity to a South African or just a non-Canadian company in this case? >> Well, uh, Anglo-American has deep South African roots and they're in the process of merging with tech. Um, so yeah, I don't see why not. I mean, the to be clear, well, I don't think you can be clear in this. It's all it's all a bit uh murky, but uh I I think the recent history with regard to uh Investment Canada reviews around these types of things like uh change of control transactions with foreign buyers for mining companies, it's really been Chinese buyers that have been stymied. Um and I and I think that's kind of where the line has been drawn. I I suspect if like uh you know Narilk tried to buy assets in Sudbury or something you know they'd probably run into some trouble as well but uh no that those sorts of things are not happening. So most of what we've seen recently is uh Chinese S so ses um making either change of control offers for Canadian companies with assets abroad um or or even strategic investments sort of minority 10 to 20% stakes for Canadian companies with assets abroad and um a number of those have either been you know blocked outright or just sort of stalemated in a in a way in the in the process. Um but all that was in the last uh the last yeah the the Justin Trudeau uh era and so um the world has changed in a in a big way. So um yeah I I don't see I don't see this being a an issue for us at all. Um, >> does having them at 19.9%, which I guess is not a it's not a backing uh, it's not a it's not a blocking interest in there, but does having them in there for, you know, almost 20% now, does that um, does that mean there's no room for others or could there be room for other strategics for, you know, future financings? The answer to that is yes, there's absolutely could be room for others and and our board thought long and and carefully about this. Um so the yeah the way to think about it is like the the reason for the 19.9% threshold is that that's kind of Canadian uh securities laws or corporate laws. Um if if you go above 19.9% you're obliged to make an offer to like all shareholders. So that's that's kind of the practical uh limit before before there's a creation of a control person and and there there needs to be a bunch of steps taken to either uh get shareholder approval to do that or you know make a takeover bid for the whole company. So uh that that's the kind of reason for that uh 19.9%. you know, if I'm just speaking generic terms, not specifically about Surge here, but uh in generic terms, if you have a company with a 19.9% shareholder and the thing evolves in such a way that there is a third, you know, bidder that comes in, a third group that comes in and is, you know, offering a price and and a transaction structure and terms that are like attractive to all shareholders. you know, these these sorts of things are they're not de facto uh blocking stakes. So, this is going to get into a little bit of M&A mechanics in in Canada, but the way it works in Canada is, you know, you you do what are called plan of arrangement transactions in most cases, which is they're all or nothing transactions predicated on uh the approval of 66 and 2/3 approval of all the shares that are being voted. So in theory, uh, if you have, you know, a really large turnout at a at a shareholder vote for an M&A transaction, you need 66 and 2/3% not not of the whole 100, but not of the whole pie, but of just the portion of the pie that turns up. And if you get that if you if you cross that threshold, then it's compulsory that kind of everything gets uh gets sort of put into that uh that transaction. So, uh, you know, if you had a if you had a 19.9% shareholder that was not, um, you know, that was like against that transaction and not going to vote in favor of it, that's a pretty high hurdle to cross, but it's it's not a de facto blocking stake. It may be perceived as a you know for all intents and purposes uh blocking stake but um uh that that just sort of raises the bar of you know what a if a bidder wants to kind of acquire control of something it just means they have to win over that uh that shareholder or um or or you know it kind of raises the bar but it's not a de facto blocking stake. Um, bringing it back to the surge case though, I I think part of how the board got comfortable with this is that again these types of assets are usually not built in uh by a single party. Um, it's a little bit different than the dynamics you see in the for example the gold space where a lot of gold mines are, you know, relatively smaller capital outlays. um they are the types of things that usually usually companies are able to finance off their own balance sheets and there's a yeah there's just kind of a cultural business preference in the gold space for companies to kind of do things themselves. You don't see a lot of JVS in the gold space. Um there's like historical reasons for that, cultural reasons, and uh I think just the kind of relative size of the of the assets allows for that flexibility. Copper is a fair bit different. Um it's and it's again probably primarily driven by the size of the capital outlays but there's just a historical um evolution there where a lot of the companies involved and a lot of the assets over time have been built in in joint venture type structures. So you go through the whole list of like these big global uh pfrey copper mines and many of them not all of them but many of them will have uh JB structures attached to them and you'll usually see like a yeah like an offtake partner a uh stateowned entity uh or you know one or more mining two or more mining companies uh attached to them in in uh in some cases and so yeah I I think in that case here like um our perspective is um you know ARM have come to the table they've been great supporters of this thing. they've earned a earned a like a a seat there and um through the the surge uh structure and if if the Berg asset if the Berg deposit ultimately finds its way to a construction decision and a a JV consortium is sort of put around it um I don't I don't think any parties coming into that would see ARM as a prospective JV partner as a as a um as as something to be avoided quite the opposite they're they're great partner to have and um again can bring balance sheet strength and uh lots of kind of um knowledge and expertise to the table. So uh I I think combination of all those things we we did not see it as something that is going to cause a lot of friction in the future in terms of the competitive playing field around a future uh M&A scenario and yeah quite to the opposite gives us a lot of optionality as we as we uh uh push things forward like we we may want to take this forward to a uh to a certain degree in the future where um yeah having a kind of in the tent um deep pocket marketed partner that can um yeah just sort of help get this thing as as as far down the road as possible is uh on balance uh definitely in our in our favor. >> I do want to talk about the proceeds from this investment as well. Uh you set out for 6.4 at first ended up getting 10 and a half if I'm not mistaken. What's the uh what are you going to do with the money? What's this what's the split going to be in terms of um yeah drilling versus other stuff? And within the drilling, what do you want to spend the most money on drilling? >> Yeah. So, to be uh to be clear, the the deposit is a is pretty advanced from a drilling perspective. So, um and and that's kind of been the case at Berg for a while. So, we're usually we haven't been in this sort of realm where we are financing, you know, 30,000 meter drill programs. um we're kind of getting in into the engineering phase of things where drilling is important but the uh size of the programs is is is not uh quite there. So uh you know for example as I had mentioned at the top what we were doing this year was a lot of like geotech and geochem drilling. Um so uh the the kind of scale of meterage is not um not up there. I mean as as we get to feasibility for sure there's going to be some campaigns uh probably for you know uh larger diameter like metallurgical uh core drilling uh lots more geotech drilling etc. So that that will come. But uh what was required for the PFS was not uh not huge like the at I've made this point um before undoubtedly but the um mineral inventory in the pea so the portion contained in the in the pit which I often think of as a you know the the target for uh a reserve the proportion of that that was already in the measured and indicated categories in the pea was was pretty high 80%. So coming out of the pea, we didn't need to do, you know, lots and lots of drilling to to upgrade an inferred resource to measured and indicated. It was much more modest than that. And also simplistically because we've got like a single deposit, single open pit, um there's a lot of like uh you can double up on a lot of stuff. You can be you can be smart with how you design drill holes so that you're achieving multiple objectives where a drill hole is you know traversing the ore body and achieving a bunch of like infill conversion drilling but also uh getting useful material for met test work getting useful material for geocchem work uh piercing the ultimate you know pit wall boundaries so you can use it for geotech etc. So um you know aggregate meterage for us has been we we've kept that um contained as a result of just smart planning and just some you know good benefits of where the where the deposit was at. Um but yeah to get to your question like the probably like 70% of that uh that proceeds is going directly to the field program that we just completed and the finalization of the PFS. So you know costs specifically related to the the the delivery of the of the prefeasibility study. So we'll we will see that uh ultimately deployed um by the kind of end of the first uh half of next year. Um, and then the other the other kind of 30% roughly of the of the proceeds is a corporate runway buffer and kind of uh direct kind of budgeted uh allocation towards EA preparedness and but a lot of that stuff is like um yeah, it's it's sort of agreement negotiation. It's it's really a lot of soft cost. It's hard to necessarily pinpoint exactly what's going to go into that. Um I think once you get into EA that's that's more uh there's more heavy lifting around environmental consultants and um field field work to deliver the goods on that. But um you know for for what we need to complete between now and uh entering the EA process a lot of the a lot of those costs would be earmarked for you know advis legal adviserss um environmental consultants >> the fun stuff >> travel you know relation just stuff like that relationship type type work around that >> but but so no immediate plan for like a a large step out or exploration drilling program where you're you know essentially I hear it as as an argument a lot um where people like we're trying to defeat the Lan curve essentially because you're going to come into that you know throw of the Lan curve there and the way some people try to defeat it is by making new discoveries um so yeah as far as I'm hearing it here no plans to you know go looking for new discoveries in the meantime then >> um I would not qu I wouldn't agree with that no we um it's just a matter of like prioritization ranking and sensitivity around uh uh dilution effectively. So, Serge has I think a really excellent um pipeline of exploration opportunities in our district. Um and if you look at our our website and some of the um kind of key press releases we've put out over the last few years around this, it's kind of the bucket that we refer to as regional exploration. you you can see some of the kind of key investments we've made in this area and it's all of a systematic nature. So we have you know done really big campaigns around uh airborne uh EM data gathering and then followed that up with you know multiple campaigns of groundbased uh you know soil surveys, groundbased uh uh geohysical surveys, IP and and the like to to kind of identify and advance targets through that through that kind of uh funnel of getting them up to a drill ready status and then doing campaigns of like uh target drilling on on some of these targets is it's limited to like one hole, some are three holes, some are you know six holes, that kind of thing. So we've had a number of uh I would say every every season we are doing a little bit of this. It's um some seasons it's been a big focus and we've had you know uh programs on the kind of regional recon work that are on the order of 10,000 mters. Other years it's like much smaller than that like less than 1,000 mters. Um but in the background what that's done for us is it's kind of like built this optionality and it's built this pipeline that has kind of slowly been progressing and the the the strategic purpose of that is kind of what you're saying. It's um it is to it is to sort of give balance to that um uh you know to to use a for lack of a better term the kind of Lison curve dynamics. Uh and so you know if we are uh going to be spending the next couple years at Berg doing some heavy lifting on uh geotech uh metallergy permitting type stuff um there's there's absolutely I think a strong argument to be made that okay well why while you're doing that and while the while the kind of um picture of value around Berg is is kind of stabilized you're you you've kind of you put out a a pretty definitive marker on value in the form of a of a preliminary feasibility study and you're you're not you're not like you know doubling the size of the resource or whatever. While that's the case, it's like it's it's smart value creation to kind of go and use part of your uh your your financial and you know human resources during the field seasons to to to try and um advance some of the like uh you know earlier stage higher risk high reward type stuff. So um we absolutely will be doing some of that. It's it's not as if we've put out any clear guidance on that recently on what the pipeline of that will be, but uh part of that is because the picture hasn't changed in the last couple years. It's like the pipeline the the um the pyramid looks the same as it did a couple years ago and it's uh it's targets like Burgett, uh Sylvia, Sabola. Uh we've got some like completely unrillled tested uh geohysical targets from a ZTEM survey we did a few years ago that are um again they're not drill ready. there's more surface work to do, but I I fully expect that we'll see some of that work advanced um in the coming uh year or two. I'm not going to give any guidance on the size of programs or budget. It's it's totally down to cost of capital. So, um, to tie this back to to valuation and dilution, it's like I think myself and the board is of the view that surge is very undervalued. And so, like running out to go and raise order of magnitude $10 million for this type of use, it's it's hard to make that like I don't think we would lean in favor of that decision at our current valuation, but at a much higher valuation, uh, you know, the higher the valuation, the easier it becomes to, uh, to make that decision. It's all it's all about, you know, um are we diluting our shareholders interest in Berg for the purpose of rolling the dice on a much uh much riskier um uh bet and yeah, it's just uh there's that kind of constant um tension and and interplay. So, I think we've been prudent about it over the last few years where um when we when we've had the ability to raise bigger amounts of money uh from a price and market conditions perspective, we've allocated some good um uh we've done some good programs on making these like long-term investments on big recon data sets. uh we've we've kind of pushed things forward slowly but surely on the target drilling side of things and that's built for us uh a good amount of optionality to um strike when the when the market conditions uh permit to to really um advance those types of things and I uh yeah and like when you're in the field you've got fixed costs right so we will be in the field every year for sure because we're advancing a project through feasibility like you you you have to be out there doing um environmental baseline like there's always going to be stuff going on at Berg. So we'll have like a fixed cost around that and so it's a question of oh can we can we add you know 10 15 20% to the field budget to have some targeted work done on advancing you know key high priority uh exploration targets. That's kind of always been our philosophy and we have done that every year and that will continue. >> What about in terms of timing? How long do you think you're not going to have to raise capital for? >> Um, so the the 10 and a half 10.4 million that we raised, I guess, plus where our treasury was at the time, which is around a million bucks, um, will give us runway to the end of next year, uh, strictly on the kind of Berg deliverables around PFS and EA readiness. So, uh yeah, I think if we if we wanted to do like a much bigger um campaign next year, uh around around um yeah, like the heavy lifting like higher cost stuff around uh around drilling, whether that's at the B deposit or regional type stuff, you know, we we would need to um to top up before then, but uh but that's not a definitive like we may not uh decide to do that as well. Mhm. Do you think come time to do it, is there room for maybe you can remind me actually what what percentage of the revenue is from precious metals right now and and come time for you to raise capital would there be room for streamers? >> Um so the the percentage revenue from the precious metals uh in the pea I mean we'll talk about this I'm sure but the metal prices are way out of date particularly for those uh those metals. Uh so I think it was like 12% uh was the revenue contribution from silver and gold. Um I think if you run like either spot prices or you know something approximating what would be sensible long-term prices in today's environment that number goes up. It is it's not a it's not a crazy increase. It probably goes from like 12% to like 15 or 17% something like that. Um, so this is still very much a copper molly project, um, to be sure, but there's a there's a nice little byproduct there around the precious metals. Um, my philosophy on that stuff is, um, you know, selling streams and royalties, that's like you can you can kind of do it once. Um, uh, and you're going to get the biggest bang for your buck if it's part of a project financing type thing. And um yeah, like I think these types of projects like we're we're in the business of uh of advancing this using risk capital and um and ultimately uh you know I think a I think a very common um outcome for these things is a is a change of control M&A type transaction. I'm not saying that's our that's our objective here, but that's a um just speaking in general terms that's like a common um outcome for these types of uh projects. And so it would be it would be a little bit illogical for us to impair that uh to to make that outcome less likely by impairing the asset with a cumbersome royalty or stream prematurely. And without naming names, uh there are there are absolutely assets out there today that have have that effect to them, right? where it's a good project, good asset, sold royalties and streams too early and probably impacted the ability for the for the project to find an ultimate home or a buyer and and maybe if it ever does, the streamer royalty will need to be uh restructured. Anyways, so I I think there's a yeah, there's a bit of a history of that kind of thing happening in in in the mining space. And yeah, so again at a super high level bit of a uh keeping things very general, I think um uh like I I think if you actually if you want to sell a royalty or a stream um doing so toward the end of the of the arc before you get to a construction decision, like the the later you do that, the better in terms of um knowing what the ultimate like ownership um you know sponsor group is going to look like knowing what the project financing uh pool is going to look like. I think it can fit in very well as a project financing tool. Um but uh but yeah, we're not at that stage yet. So why why would we give away a project financing uh you know tool in the toolkit simply to fund you know higher risk uh earlier stage stuff. I I'm just of a view that that stuff should be is is better done by um you know risk capital partners uh uh early on. That being said, there's a lot of kind of like hybrid solutions that we've seen where some of these uh uh royalty and stream finance providers take equity uh in exchange for rights of first refusal, rights of first offer on those sorts of things. And yeah, those are those are good instruments, right? like um uh getting getting sort of an e equity um investment from one of these partners or one of these players in exchange for saying hey if we ever do a streamer royalty you'll have first kick of the can that that's a very uh you know fair and attractive thing in uh for for a project at this stage. >> Yeah, I think you and I would have spoken about this uh last time but please remind me what the um what the change in control fees here are. Um so it's uh yeah for the named executive officers which is like the management team four individuals um it's going to be uh different for each person but um you know per the terms in their either employment contract or consulting contract or uh you know just whatever the like minimum statutes are for not for change of control but for like termination provisions. Um yeah, it'll be sort of a uh a multiple of their annual uh annual income both on the uh base salary and kind of bonus. So again, I don't have all these memorized or in front of me, but uh order of magnitude, it's going to be like, you know, whatever an individual was paid in the last 12 months, salary and bonus, it would be sort of like onex that. So um you know, they basically get paid a year of of what they what they were previously earning as a change of control. Uh and then uh yeah unvested uh RSUs, DSUs, etc. vest essentially. So um >> which is both of those things are locked standard and pretty fair, right? Like uh in the case of a change of control, you're losing your job and so it's a it's a bit of a kind of normal severance uh package. >> Uh unless of course you're like going on like sometimes there's change of controls that aren't really change of controls. you're sort of like mer doing ane or something and the the the board changes but the CEO stays the same like there's there's obviously like exceptions to to these things but um uh but yeah it's sort of a a severance in terms of like cash that you've been earning for the last year and then yeah the point of RSUs and DSUs it's like uh they are um they are like long-term incentivization securities right so it's like to incent people to stay in the seat and So if the company is deciding that you can't stay in your seat anymore because we're doing a transaction that's in the best interests of shareholders, well I think it's makes complete sense that uh those securities would uh would vest and you would you would treat them as if they were uh owned as as stock. You obviously have to pay pay tax on them and what have you. But uh yeah, >> I agree uh not on the tax thing, but I do agree about you uh deserving a um you know deserving um deserving a change in control fee there. What what I'm really checking for here leaf just as a bit of a background is I'm a firm believer of um incentive being one of the most important concepts in finance and so it's essentially trying to see you know what what drives you. I do think the value of your equity would be higher at that point. So that's essentially what I'm checking for here and that's why I'm asking about a change in control fee. Um you had mentioned uh that your fuel program would run up to late September. So I I assume it's done now. Um you said 5,000 mters. How did it go? What did you get done? Where was that 5,000 mters? Talk to me more about that. >> Yeah, it went uh it went very well. Um so there was uh four holes drilled into the Berg deposit for uh resource conversion infill purposes. Um, and those were Yeah, I mean like we we've got a long longish inventory uh of planned holes for these purposes and it's just a matter of you know moving down the priority list and kind of ticking these things off as as we go. Part of it is you know where in the deposit we need to infill like where the inferred blocks are where etc. part of it is like pad construction um you know logistical considerations um you know the costs and just sort of challenges around building uh new pads and kind of permit constraints around that. So yeah for each each year over the last three years we've done um fair bit of this advancing the infill drilling uh work and uh and that's kind of how we go through the list. Um this year we did um so what I mean by environmental geochem drilling that is uh again at the simplifying a bit it's like drilling into the waste rock in the pit. So we we've got a known we've got a known volumetric envelope in the form of an engineered pit shape. Uh there's a block model that sits within that pit shape and then kind of everything outside of the block model that's in that pit shape is deemed waste or considered to be waste. In most cases it's it's just doesn't have a lot of drilling into it. Right. that's uh you're theorizing that it's waste because uh the it it it hasn't been drilled and it's you know the grade is kind of uh diminishing as you approach the the um the margins of the deposit. And so uh but but over time that waste envelope will get more drilling into it for both geotech and geochem purposes. And there's of course the the chance of upside surprises in the form of uh you know discovering new zones hitting hitting distal veins things like that. So uh but simplistically like the waste envelope in the in the deposit is something that when you when you excavate it when you extract that you got to put that waste somewhere. You're either going to put it into a waste pile or it's got to go into the tailings facility. And the the differentiating characteristic there is whether it's potentially acid generating or not. So it just has to do with, you know, sulfur abundance in the rock. And so you got to put some drill holes into it to uh to to understand that um model the the kind of sulfur in in the rock. And >> again, it's relatively simple with these big porefree systems. You've got a big pyite halo. And so if you're in if you're out of the orzone but in the pyite halo, nine times out of 10 that's going to be potentially acid generating rock and then at some point you get out of the pyite halo and it's and it's non acidgenerating rock. So it's really just about kind of putting in some drill holes to characterize uh what that the shape of that boundary and just characterize how it kind of attenuates over uh radially as you as you move out. And so, um, we've we've done over many years a bunch of surface work to characterize that. And, uh, last year when we were doing geotech drilling, that was, um, a lot of stuff in the margins of the deposit and moving into the outer reaches of the of the pit, but a lot of that was like a lot of that was angled drilling. It was pointing down to hit the pit pit rim at a at a 90° angle effectively. Uh, and so you're you're missing a lot of that like large volume waste that kind of sits in the upper portions of the of the pit cone. And so this year we went back and did some dedicated drilling into that waste envelope. And we we attempted to do something that we thought was going to be um much more cost-effective and efficient, which was using underground rigs uh secured against the Berg has a bit of a pit shape to it already. We see that in a lot of, you know, imagery that we put out. But um so we got drill roads along the hill and we're and we were drilling into this waste envelope which because of the erosional profile of of the Berg deposit because the deposit kind of sits in a what looks like a cone-shaped um depression or or hill side already. Uh drilling into the waist is actually an uphill exercise. You're drilling up the up the slope. And so we used underground drill rigs anchored to these drill pads on the side of the hill. and the the the angle of the of the drill drill hole itself was going up basically. So negative angle drilling and um yeah we we completed uh four holes successfully of that method but it was um a hard work like I think there's just a lot of uh technical challenges with uh executing it. So I think for future um data collection in that realm like there will need to be more of this uh before you get to the end of the feasibility road I think we'll probably you know do some helicopter supported uh drilling where you you bring a rig up to the top of the hill and drill down instead of up. It'll probably end up on balance being cheaper even though you're using a a helicopter to do that. Um but anyways for for that program we had some good success. got the core we needed, got the data we needed. It's in the laboratory now doing uh doing the you know geochem u humidity cell tests and and whatnot. And then the final piece was geotechnical drilling in the infrastructure area of the project. So last year we had a geotech project uh geotech program in the pit. So that was as I said intersecting the the the final uh pit shell um to to understand to do some tests and understand rock mechanics at that um you know uh at the kind of final uh pit limits. Uh same thing has to be done along the you know the whole corridor and the the whole area where you're going to be building you know the the mill foundation the conveyor route um the where the camp will ultimately go etc. So uh we just acquired a bunch of the tenementss uh that underlies that area in the last year. So this was the first year that we were able to actually do drilling on that uh on that ground. So we had about a dozen holes uh completed this year uh for that portion of the program. Um the these are much shallower holes because this is this is we're not investigating anything to do with a or deposit. It's all about in it's all about um estimating uh or or um learning about the bedrock in an area where you're just going to be building stuff at surface. So you want to know how deep the bedrock is and then you want to drill a few meters into the bedrock to know if it's, you know, all fractured up and what have you. And so in this particular area, it's like yeah, you got till cover that ranges from a few meters to a few tens of meters and then you're drilling a few meters into that bedrock. And uh we didn't see any surprises like the the depth of that till cover was as expected. Uh and so the yeah the depth of most of these holes was like on the order of 50 to 75 m. So you know a dozen of those holes u uh to get to like you know whatever thousand thousand plus meters of uh of that type of uh drilling. So yeah lots of uh lots of data lots of um I guess important impactful stuff for uh for prefeasibility engineering work. Um, but because of the different use cases, that's why the total isn't, you know, tens of thousands of meters. It wasn't it wasn't a campaign of dozens of infill holes into the deposit itself. As a result, the news flow coming out of this stuff, which should start here pretty soon, you know, we'll obviously have a, you know, a couple press releases about those infill holes in particular that highlights the, you know, the grade in in some interesting areas of the deposit that are 200 meter infills, that kind of u that kind of thing. So, it's it's uh it's impactful stuff. Uh and then in parallel with that there was a a resampling campaign done on some historical core from the center of the deposit. So the the the kind of spatial center of the deposit is um uh Berg is a bit of a donut-shaped uh mineralized zone. So you have an intrusive stock in the middle and then uh you know veins developed into the into the surrounding wall rock. So most most of the metal sits in the uh that that kind of vein envelope in the wall rock, but the intrusive stock in the middle is is mineralized as well, but it's like it's weakly mineralized. So it's not the juicy stuff. And as a result, a lot of the historical drilling done at Berg in the early days of its um of its uh of it being drilled out, for obvious reasons, when you're doing exploration, you you're chasing ore, you're chasing economic mineralization. So, a lot of the drill density is in that donut and you've got uh comparatively less drill density in the uh in the center and the uh a lot of that historical stuff was yeah like the QAQC um history around it, the assaying for precious metals, a lot of that stuff has just changed over the years. And so, uh, I think a lot of this, a lot of these, a lot of these drill holes are are used in our current resource estimate for grade estimation. So, you've got above cutoff grade um, mineralized material in that center of the doughnut. But for categorization purposes, like whether whether the QP says it's going to, you know, meet the criteria to be inferred, indicated, or measured, it it's categorized as inferred because of the uh QAQC type stuff. And so we've gone through and uh resampled a bunch of that stuff this year. I think it was like 20 holes, 18 17 to 20 holes. Uh I don't know the exact number off the top of my head. Um but yeah, easy, lowcost work. uh go find this stuff in the coreyard quarter quarter uh the core uh have it reassided. We get some new data for silver and gold that may not have been there from the old stuff and we get to uh revalidate the QAQC under modern standards and it kind of will will meet that criteria for C categorization. So it's for for purposes of you know infill drilling or inferred conversion it's equivalent to drilling those same holes as if we did as if we did it this year from uh from scratch. So we're going to get some big impact from that uh in terms of uh inferred conversion and all of that matters for a PFS because if you if it stays inferred it's treated as waste in in a PFS which obviously you don't want right like it's if you know it's above cut off you know you know it's there especially if it's like very obviously in the mine plan it's kind of like you know in the middle of the in the middle of the pit you want that to be treated as uh uh as as what will be called ore once we're uh once we deliver the uh the PFS. >> You said a lot of data is about to come through here sometime soon. Um, yeah. What does that mean for your news release cadence? When will some assay start coming in from that and then how far how long are you going to have news for essentially? >> Yeah, I mean I think most of the assay uh stuff will be delivered before the end of the year. I it's it's all kind of coming in in batches now. So um yeah for this type of stuff batching it will be a function of clear communication. I don't think any of this stuff is material. Um so we don't we're not trying to drip feed stuff out. It'll be like how do we how do we batch this so that it is like a coherent uh you know uh story to tell or you know kind of bit of information. So, as I said, four infill holes and then like, you know, 17 18 um uh resampled uh batches of core. So, we'll we'll get all that data in and and figure out how it uh all ties together and put that out in maybe a couple press releases uh this fall. Uh I I think the you know, the laboratory work that's going to be going on on the geo tech and geochem stuff uh will will take more time. So, you know, if if there's newsworthy summaries of any of that to to to come out, that'll be, you know, maybe into the new year. Um, and and then yeah, I think the uh that's potentially it, right? Like the obviously the huge catalyst coming up is the delivery of the PFS. So, um there there isn't there isn't uh it's a little bit down to our discretion if we if we want to put out just general updates that I think help to help to kind of lead people in the direction that we're going. We we obviously will uh we may choose to do that a couple of times between now and the delivery of the PFS to just sort of say here's how things are going. Here's you know here's how the information has changed from before to where it is and and what the PFS is trying to achieve. um as opposed to just kind of you know plopping the whole thing out uh at at the end. So uh but yeah the the the big all of this is in service of delivering the the prefeasibility study which is kind of the big one which will be uh yeah targeting um uh first half of next year um the the sooner the better the earlier the better obviously. >> Yeah I was wondering if that timeline has changed but first half of 2026 so it's not changed. Uh that's that's good. Why would I own the stock in the meantime? It's kind of the question here though. If if I if I didn't know it today, um and you're entering what some people would call the boring part of the Lan curve. Um yeah, what do you how do you how do you create excitement, I suppose? Or how how do you create how do you close that valuation gap? That might be a bit of question. I know I'm it's too many questions that I'm asking, but I'm trying to make it sound like I'm smarter than I really am here, so give me some rope. People will say, "This is the most undervalued copper developer out there. Why is that the case? How do you close it?" And essentially that goes back to what I just said, like why would I own the stock between now and and you know the PFS if if um if again you say that there's not, you know, major catalysts or anything like that? >> Yeah. I mean um excitement and uh and you know news news releases do not equate to value as as you know right like uh they're they're a communication news releases and catalysts are a communication element around like the the the value creation process but uh yeah like I I think the question you're asking is is also you know you're you're describing the psychology of a lot of investors speculators as you like to call them in in our in our industry which is like uh you know people trying to time the market to the nth degree, right? Like uh I'm going to I'm going to you know park my money here for this week because I'm expecting this news release that's going that's misunderstood by the market. I I know it better than the market does. So there's going to be a a pop there and then I'm immediately going to go park it somewhere else. And so it's this kind of like perceived investor psychology that people can lily pad hop throughout the the you know the calendar of catalyst events from a bunch of uh mining companies. I I don't I don't know how that how well that works across the the the business as a whole. There's probably some very talented individuals that uh that can can do that. But um yeah, I don't know. My my attitude on these things is I take a much longer term view, which is that we're we're doing something in the in the mining space here that is pretty vanilla. It's pretty uh you know, like we're working in a in a in a commodity environment that's obviously got bullish fundamentals. We're uh we're doing the very obvious uh quality work that you need to do to derisk these things to uh to surface value. You know, de-risking is also like uh that that comes through in the form of like, you know, multiple rerating or reductions in discount rate, whatever you want to however you want to like theorize what that means. It's like if you have if you have something that's trading at like 1% of NPV right now and you and you go and deliver a bunch of like real scientific work that shows, oh, all these assumptions are actually pretty good assumptions like this is less risky than than you know, we are derisking it. we are reducing the risk in what's going on. There's there's a there's just like logical uh you know there's finance logic to suggest that that 1% of NPV should just like increase over time to 2 three four five 10% of NPV. Uh so I think that's kind of the the very simple pitch to investors here for for Surge is that hey we are uh we're we're a good project. Um it's always been good. I think u I think maybe the recognition of how good it is is is changing in real time. That's probably why our share price has done uh pretty well. We've outperformed uh handful of peers uh really really relevant close peers to us in the last uh year. So there's raised raised awareness over how uh the quality picture around this project, the uh the extent to which it's being uh derisked and and yeah, we've got a big catalyst coming up in the form of a you know, snapshot in time study that's going to kind of put a bow around a lot of this stuff. Um so yeah, like why own it between now and then? I mean, torque to just like macro stuff going on, I guess. like uh why own any copper stock uh between catalysts because uh uh because you never know when these reratings come. You never know when the market's going to move on these things and um yeah, we're just like we're objectively very cheap versus a bunch of uh >> uh comparative things. Um so that's that's a message I've had for a while. Um the stock has done pretty well in the last year, but it's there's still a huge huge uh gap between us and where I think uh some of our really logical like uh you peers are, right? Like projects that are at this kind of level of de-risking that have a lot of the fundamental ingredients in place. Um I I'd also say like on the BC side, um yeah, like permitting in BC is like I'm not saying anything that people don't already know. the the like unique aspects of BC as a jurisdiction for copper development are uh are squarely around the like the permitting topic right the a lot of these projects are in fact lower risk technically than other parts of the world but I think uh I I think there's an investor perception quite rightly so that there's you know unique challenges or unique um unique complexities around permitting so as a company we're very focused on on advancing that that piece of the puzzle. Like it's great to see the government uh and you know Canadian society as a whole uh you know starting to respect and understand the importance of these types of things. Um but we got you know rub the rubber has to hit the road for us in terms of actually getting into the EA process actually getting some concrete understanding around timelines and you know we we have aspirations to really you know deliver some positive outcomes there around you know bringing first nations uh uh partners into the fold there and just kind of showing a very a very clear pathway to how how we're going to kind of move through the EA process. That's just it is fundamentally different than what you see in other jurisdictions. Um but I don't I don't see it as a negative. It's uh it's like a it is it's more complicated but it's um it doesn't mean it's like riskier. It's just um it's I think not well understood and it's evolving but I think the way it's evolving is u is in favor of big important projects that are being pushed forward in the right way. And so, um, yeah, so that's another that's another bunch of catalysts that, uh, you know, going back to your question of why own the stock between now and then. Well, we're working on that stuff right now, too. I'm not going to give any promises or or guidance around you know timeline of delivery of catalysts around the permitting square but uh you know ourselves and all of our competitors in BC are yeah working away on this stuff trying to um trying to you know advance relations with the government and first nation stakeholders to try and kind of put these projects in the right uh the right uh pathway so to speak. So that there will uh there may very well be some um you know material material value creation events around that uh as well I would say >> and there's BC and then there's BC right I mean there's the golden triangle and then there's southern BC maybe you can talk to me or help me better understand how that changes things for you is it I mean either in terms of permitting or community or in terms of I know that like seasonality is is less pronounced in in southern BC Um, but what else is is different? Are there any specific challenges to southern BC as opposed to, you know, call the Golden Triangle or the northern part of the province? >> Yeah. So, um, I will just uh, and I know you you did a great tour around the province, so I I don't want to um suggest you you don't understand the geography, but southern BC to me would mean like uh, you know, down by like Cam Loops and um, like the very far south of the province. I would say Smithers Smithers and kind of where we are is um you know central to to northern BC but it's very much in the kind of interior of the province that has uh a lot of infrastructure pretty mundane topography like it's pretty easy to to get around. Um and I like to me that's the big contrast with the Golden Triangle which is like the Golden Triangle is like deep into the coast mountains. It's uh it's very rugged. there isn't a lot of infrastructure in place there. Uh but it's always been known as obviously extremely geologically perspective and I I think we're you know we're like we're we're we're in a period of time right now where there's been some big discoveries made there over the last 20 years. been a couple successful mind builds and uh you know the the political lens with the Tall Tan nation has uh progressed really successfully and uh yeah so it's like a really unique area of BC kind of because of all those ingredients like really epic geology and prospectivity really tough environment from a infrastructure perspective and probably one of the um yeah like it's a it's got a unique lens around it because you're dealing with a uh like a single uh nation, indigenous nation that is that has very deep capacity. They're they're quite sophisticated. They kind of know what they're doing and how to do it and they they they know what they want. And so it it works really well there. And so I think it's a area that um is winning a lot of investment um winning a lot of investment around exploration. But the flip side of that is like the hurdle rate is super high especially for copper for gold for gold less. So I mean gold you can build gold mines anywhere in the world because you can you know you got to get your kit in there once and then once you got a mine going you can fly your bullion out with or your dory out with a chopper. With copper it's obviously very different. You have to you need trucks or railroads or whatever to move your thousands of tons of concentrate out on a daily basis um or weekly basis. So uh so yeah when you look at the the actual practicality around building mine building base metal copper mines in the deep golden triangle the challenges around them are really all down to infrastructure like how do you get a road into these things how do you get power into them and and it's really a function of how deep you are like KSM is is in the process of really you know it's it's kind of breaking through the the threshold right now but they're like they're kind of like, you know, right at the threshold or right at the uh right at the start of the, you know, deep into the mountains and you compare that to like Galore, whatever, which is way in there. So, uh, you just sort of look at these things on a map and you can kind of tell based on like how deep into the mountains you are is like the deeper you are, the more difficult it's going to be for just obvious infrastructure re reasons. I think where we are uh is yeah I don't I don't want to uh it's a little bit semantics but we're not southern BC. There is um I just want to make that clear. It's uh it's kind of like uh the northern part of the central BC interior um and and kind of uh somewhat analogous to KSM. We're not like deep into the mountains. It's sort of like the very front uh the first one of the first ranges uh there. So access is pretty easy. the the prospect of building big minescale infrastructure whether you're talking about roads or power lines is very tangible. Doesn't mean it's cheap or easy or free whatever you're still talking about um you know building roads into the wilderness but the the scales involved are like orders of magnitude less and much easier than what you would be contending with in uh deep into the into the golden triangle. So that that to me is like the fundamental uh uh fundamental difference is is like uh access to infrastructure uh is is kind of the number one thing. Um and then yeah like the the First Nations lens as well is quite a bit different um elsewhere in the province. So you you have usually kind of overlapping uh title claims. Uh so you know multiple indigenous nations uh or you know treaty first nations bands that uh that will have uh yeah title claims traditional territory maps boundaries etc that overlap with one another and so you're dealing with overlapping title claims in particular geographical locations. Um I I think in the golden triangle that picture is uh quite a bit uh uh simpler because you're you're dealing with uh with one uh one party. So the the complexity for uh groups like us uh in many cases boils down to like and we're not alone in this picture. It's like all across BC is uh is like this and frankly elsewhere in Canada as well. Um but yeah, the the picture boils down to um yeah, advancing things in parallel or together with kind of uh um multiple multiple different uh groups like that. >> Yeah. Yeah. Um when I when I said certain BC, I suppose I was thinking just to the south of where I went in the Golden Triangle. Um >> and that's just an excuse for not looking too stupid on camera. Um, but are you guiding any numbers for the uh MPV and capex at the current metals prices or or whatever prices you might end up using for the for the for the PFS? I mean h how how much of a difference are we talking about? I clearly as I mentioned in the beginning there is some difference but how big of a difference are we talking about? >> Um yeah I mean the I'll try to simplify this for you know the the investor audience. So, um, yeah, like when you when you when you put out these studies, um, you know, part of the requirements under 43101 is like the sensitivity tables. So, you kind of show how, you know, for for each 10% change in one of the revenue inputs, metal prices, you know, how how fast does the um, uh, NPV change. So we we have that disclosure in our press uh presentation um front and center as it relates to the main metals uh copper and molly anyways. >> Um and so yeah like those are basically linear changes. So you can kind of just see like okay for every for every like 10 cent or 20 cent uh change in copper price or dollar change in molly price whatever whatever it is here's how the NPV changes. So you can kind of do the math and say, well, um, you know, if if if all else equal, if you were kind of running the pea at spot prices or I don't know, pick what pick what you think might be sensible long-term um, metal prices for those things uh, today. Um, certainly I don't think $5 is the right thing for copper. Probably, you know, $425, 435, something like that. Molly, on the other hand, has like been very sticky between 20 and 30 bucks. and virtually every, you know, study out there from, you know, bigger companies to smaller companies that have Molly involved in it, uh, I haven't seen anything below 20. Um, so I I think I think 20 is a safe floor for something like that. >> Um, and then and then silver and gold have been I mean they're like more than double where we were uh 3 years ago. So quite uh quite interesting movements there. Um, so yeah, you can kind of like piece together that uh it all LSQ equal and the PA if like you're just using new metal prices. I mean, I think the flip to my presentation here, but the um I think the like bottom right hand corner for the sensitivity tables on NPV, which uh is um yeah, I mean that's like five 520 copper and 1950 Molly. I mean, you're talking about $4 billion NPV and roughly 30% uh IRRa. That doesn't that doesn't take into consideration the changes in the precious metal prices. So, you'd probably get uh you know, an additional boost there. So, four and change NPV and probably, you know, low 30% IRRa. the the flip side of the equation is like again if there's no design changes from a from one study to another you know how has the cost environment changed so what where is cost uh inflation gone um and that's certainly not trivial right now like as we all know uh no matter where you are in the world today like we're we're living through an inflationary um period and so there's absolutely been cost inflation across the board for both you know capex and opex related items we're we're like certain aspects of that we're going to be shielded from like this is a project where a lot of the a lot of the power uh a lot of like the you know energy consumption costs are are like hydroele electricity so you're not like dealing with the same kind of like commodity price swings that uh you might see with things like steel and and I mean oil is obviously not uh super high at the moment but um uh yeah like the the the drivers of cost inflation are are there's a complicated story there. Uh but there's obviously been we've we've you can you can easily kind of witness cost inflation on realized capital expenditures and uh realized operating uh costs for these types of things. So um I so I think that's that's obviously going to pull those numbers back from the the upper bookend that I just mentioned from the sensitivity tables. Um and then the the third factor is like okay well what has also fundamentally changed and so for us a big one is going to be the the metallurgical recovery profile. So uh we have the I guess the way I described this before was the recovery um formula we used in the pea was we believed it was conservative. I think the results of our pfs met program have borne that out. We're likely going going to see um you know changes to the recovery uh profile here on the order of like you know five percentage points for copper and maybe um you know 10 plus percentage points for Molly the two biggest credits. So um you know macro pricing environment aside that's just like more metal per ton that you're you're recovering and selling. Um so kind of big fundamental improvement there. And then also um you know other physical changes will just be yeah like design changes. So the resource is going to be bigger. Do we want to make any adjustments to the throughput to the uh you know we've got more geotechnical knowledge now. Will the will the phase development of the pit um change in a more optimal fashion? Will the mill be located in a slightly different area? Is the conveyor going to be designed slightly different? So there will like we're not we're not totally changing anything. It's not like we're going from, you know, an open pit to an underground design or something. It's it's nothing dramatic like that. But there's lots of um lots of changes to the like physical uh parameters underlying the project that will drive impacts to uh NPV and and IRR as well. So, uh I I would I would say, you know, the the bottom end of the book end is I think should hopefully be the the pea numbers. I think uh we've seen enough we've seen enough like improvements on the macro side. You know, metal prices have moved higher than the kind of inflationary uh pressure underneath. Um plus we've delivered some good fundamental improvements. Um so so I think the PA numbers should be kind of like the the bottom book end. And then you know just taking the PA and running much higher metal prices through it will give you a sense of like the upper book end. And so somewhere in between is kind of where this uh where this thing should uh should shake out. We're doing a lot of important trade-offs right now around um sizing and kind of phasing of the project. And uh just simplistically like this is the this is a deposit that has more than enough mineralized material and you know hopefully our maiden reserve declaration will you know be at that at that kind of scale as well. like there will be enough quote unquote ore here to um you know it could justify like a much bigger throughput that uh is um you know kind of at that uh that Highland Valley type level or or types of throughputs that we see at some some bigger mines in Peru or or Chile um that's going to drive higher capex and so yeah we're looking at well doesn't it make sense here to look at a uh a phased development to just sort of have a phase one that's um something something smaller maybe even smaller than where the pea was and then kind of grow into a um a bigger a bigger um throughput so that you're not talking about a 50-year mine life. You're talking about something that's kind of more uh more more akin to where we were at the pea sort of 30-year mine life. So, no definitive answers on that. I'm kind of um I guess testing the waters by by saying that, but it's a it's a logical thing to be uh investigating at the stage of a pfS to to sort of ask the question, okay, you've got a bigger resource. What's the right size for something like this? And then once you know the right size, then there's kind of the practical question of well, um you know, what's the what's the right way to build into that size given you're talking about something something big? It's a it's a it's a big mind for sure. So it's not uh uh for for both and this isn't really just a statement about access to capital or you know things like that trying to minimize capex it's it's just risk management and this is something that even even really big companies uh uh you know they they look at it through these lenses as well. So even if this was a project that was, you know, owned by one of the biggest mining companies in the world who has no problem building and operating and and making capital investments of this scale, they may still from a riskmanagement perspective say, well, you know, uh, you know, it's all else equal. If you're going to have a cost overrun on a capital investment, you'd rather do that on a smaller one. And then once once you sort of get everything commissioned and all the kinks worked out, then you can add another communition line and and kind of increase the the size. And so uh there's kind of risk management there. And then it's it's also kind of community impact like you're you're going to go from a standing start to trucks moving all over the place and uh and you know huge hiring spree and stuff like that. It's um there th those kinds of impacts uh are are can be significant and there's a lot of sensibility in just saying yeah do we want to ease into it is it a prudent plan to ease into it uh through a sensible phasing um scenario as opposed to just going you know full 100% throughput in in one kind of two or threeyear construction period. So again no definitive answers on that yet. We're we're working through some of that stuff uh for the PFS, but uh yeah, once we get to the that study, we'll we'll we'll obviously have some u answers on that. >> How did you get the better metallergy there though? I mean, Molly recoveries are up significantly. What has changed? I mean, did you have to grind it to a smaller size? Um different reagents, longer? Yeah. What changed? Yeah, I would say um so a little bit of all that stuff. I mean not not lower grind size. The grind size has been pretty well established here. Um >> so it's more >> Yeah. Yeah. So um it's which is not particularly fine. I think we talked about that uh in the last discussion. >> Um I think uh it's more to do with like the how the prior work was was done and and this isn't a a criticism of it. It's just sort of a reflection of the you know practicality of the the historical work and um and the kind of period of time in which it was done and so forth. So the the real simple story was the uh one of the prior owners of this project called Terrain Minerals. They did like three rounds of um uh metallurgical test work in the 2009 1011 period I think it was and this was like roughly in parallel with similar programs that they were doing at Mount Milligan. So those are the two projects that they owned. Mount Milligan was in feasibility. Berg was like precoping basically. Uh and so they had like pretty advanced metal energy going on at at uh Mount Milligan copper gold system. um as I understand it kind of tricky tricky metallergy so they were you know really focused on that and but they were drilling off Berg at the same time uh you I you weren't as far as I understand you weren't um you know following the mining sector in that time frame but it was a it was a bull market it was a real big bull market in that uh 200 you know 8 to 10 phase and so uh yeah this company would have train would have been like you know operating huge budgets uh and doing huge drill campaigns is is kind of uh my my my memory of uh of that. And so yeah, they would have been generating a lot of or material and just kind of like you know piggybacked on what they were doing uh with the the Mount Milligan MET program to kind of do a standard orfree copper flotation circuit program for Berg and but they're they're very different deposits, right? like you're talking about Mount Milligan uh at the risk of oversimplifying is roughly like a 50/50 copper golds and Berg is obviously very different. It's like copper, Molly, silver. And so yeah, like I I think there was a handful of programs done. Um they were and then they were very focused on okay well we got to produce a Molly con so let's first generate a huge volume of bulk concentrate so that we can do you know a large volume of Molly separation tests and and then they so they put together a pilot plant to do that and I it just it like the pilot plant uh didn't perform the way they wanted it to. um which is I mean pilot plants are like um uh it's you know when you're when you're building a mill like for for operating purposes you give yourself a bunch of time to commission it to kind of get the kinks out so that it's like continuously operating in a in a well- behaved manner. The concept of a pilot plant is like kind of turns that on its head. It's like, well, let's do something instead of batch scale. Let's do it on a continuous basis, but we're limited in the volume of material we have here, so we're going to give ourselves like two days to stabilize it. And it just obviously doesn't work that well. It's like a pretty uh high-risisk endeavor. And so that's that's what happened. And so they had kind of subpar um bulkcon from the pilot plant that didn't really match any of the the proper test work that they did on a on a batch basis. And then they tried to do a bunch of Molly separation test work on that and it was just kind of yeah it wasn't uh wasn't the right approach. So um we have gone at it a bit differently here which is like just batch everything really really you know large number of tests uh trying to like home in on the uh the right reagent uh um routine the the right kind of approach to pH the right approach to agitation uh etc. And um yeah, nothing particularly novel. It's all pretty um basic off-the-shelf reagents. The grind sizes, nothing crazy. Uh it's not like we're doing anything um you know, there's there's no um things like autoclaves or or you know, super fine regrinds or anything like that. It's all pretty uh vanilla type stuff, but it was just uh yeah, kind of more focus on and a lot a lot of minology as well. So, as we were going through the uh the test work, you know, you get a test that doesn't perform the way you want, okay, send send that sample in for minology, make sure that you understand if there's anything going on at the kind of like, you know, mineral grain, mineral surface level that will theoretically predict why you're having that performance or not. So just better science and um yeah so I think just through really diligent efforts there taking our time no rush uh just kind of getting the right results at each juncture um yeah we we got we got great results and I think it's uh again this is PFS level like there will be much more to do as you go go to feasibility you want to replicate this stuff you want to better understand um what the actual mill feed will look like as you approach feasibility mind planning like you know what is the first year the first two years of actual milfeed going to to look like and just do a bunch of test work on on that stuff. Um so yeah there's there's obviously more to do but I think for prefeasibility level uh knowledge um the yeah we're super happy with the program we did as are the the other professionals involved at Senko and and ALS and ARM for that matter. So >> yeah, >> I can see that we've been at it for almost over an hour and a half actually. uh at this point and and you told me you had a busy day ahead of you and I've not been too respectful of your time here, but what uh what what what's going on at UT? Um and and has your opinion on it kind of changed since the last time we spoke in terms of what I'm really thinking about here is is does it have to be in your portfolio? Is there is there some value to be realized because I don't think you're getting value for for Berg in your share price now as is, let alone some of the other projects. So is there is there a different way to realize that value there? >> Yeah, I mean the the the typical uh like corporate finance approach to like non-core assets or or you know can you can you make an argument that you're not getting value for something and if so is there sort of some corporate thing that you can do to monetize it or surface value? I think that uh that's always a question worth asking if they are non-synergistic assets. Uh that doesn't apply here. So like if if UTSA was in a different country or whatever, sure we'd have a we'd have a you know proper think of that. Um I I think here it's like again we're we are in the we consider ourselves to be in the business of defining and de-risking like a big copper development opportunity, a big copper development business opportunity. And we think the like counterparties there that will ultimately be um partners in making that become a reality are the types of enterprises that value big land packages. They value big resource endowments um above the level where you have like a defined project. So, uh, I guess the way I would kind of I'd categorize this or the way I'd describe it is like, you know, a big mining company may look at the the asset portfolio that Serge has and say, "Oh, yeah, Berg is like a great um anchor to this district. It's a big project. Uh, it it screens well. Like the the economics are robust at a range of prices and it's like, you know, low risk. It's obviously got a a a ways ahead of it in terms of permitting and all that stuff, but it's a uh from a like engineering execution perspective like relatively lowrisk uh project and you know demonstrates a 30y year plus mine life uh and it's so so that's that's like the anchor and I think the types of mining companies that um you know look at something like that maybe they maybe they are not operating in BC today uh this would in effect be like a a new a new um jurisdiction for them either from the provincial perspective or even just like you know the local perspective. So to to to make a capital investment here to actually operate there uh requires developing a whole range of of expertise and skills relating relating to that area. And uh so it's great to have an anchor project, but it's even better to see that okay, if we if we succeed in this, we see that there's a pipeline, there's a pathway to having multiple growth opportunities here to uh expand our operating footprint or extend it in time. Uh so it's not just Berg with a tiny little postage stamp uh around it. It's Berg in this broader uh land position, broader kind of operating platform where you could have or or you know uh uh footprint where you could have you know UTSA as a secondary project that comes online in parallel or is at least something that says okay well we're operating there for you know 30 years we see enough you know mineral endowment there that either with UT or you know further discoveries that are likely to be made we could see this being like a you know 50-year district. Like that's that's kind of the um the really high level thinking that big copper mining companies uh you know often have about these things is they they want to see an anchor beach head, but they also want to see okay like if we're going to go through the if we're going to go through the effort of building something big, we want to see the potential to have expansions or just like you know optionality embedded in that. So hi for us hiving off UTSA to realize a little bit of value today and by little bit I mean our market cap is small. It's not like we would you know even if we monetize that for a significant percentage of our market cap that the proceeds from that would not materially change the kind of picture of what we're trying to to do. So it's a little like you know pennywise pound foolish. Think I I again I think we're in the business of trying to like make this as uh as attractive as possible to the enterprises in the world that um put their shoulders and their balance sheets into building these sorts of uh copper uh copper businesses. And I think the key ingredients for that are obviously you got to have a good project. You got you got to have like a meaningful uh anchor flagship project. But I think you know m maybe not uh sort of like the family feud thing maybe not number two or three on the list but certainly like four five and six would be big land package um you know pipeline of exploration opportunities you know identified targets big data collection that you've already done on that in the form of you know geoysics and other things and secondary projects that kind of thing. So, and you see this with some other companies that are in the market that are doing really well like um I think Mary MKA has has kind of that flavor to it as well. Um you know core core anchor project um but kind of like you know bigger bigger um thematic armwaving thing going on with some like really excellent exploration uh potential and I I think those are the ingredients that uh that you know major mining companies uh care about. So for us to for us to like um attempt to monetize that would strategically not make a lot of sense for us. Um and yeah but but beyond that our view on it is like is very positive and favorable. Like I I think the way I've summed it up uh in other conversations is, you know, if we were to run the ruler over it on a standalone basis to kind of put forward a standalone pea, um I'm sure we could derive some good numbers there. There's actually really good gold credit at at UTA. So, especially at $4,000 gold, like I'm sure we could come up with a mine plan there that is uh you know, much much smaller tonnage. like we could probably focus on like a 200 million ton mine plan at UT with a dedicated much smaller mill and brand it as gold equivalent or something like that and put put forward something that's uh that's pretty interesting. I wouldn't even rule rule that out as a as a worthwhile idea that we might uh do in some value recognition campaign in the future. But from a from a purely kind of like practical perspective, then we would be then we would have a project that's kind of competing with Berg with respect to you know questions like power supply questions like uh with regard to you know permitting and uh capital resources and first nations type stuff. So like it's important to internally know uh like have views on value like that and believe me we do. Uh but in terms of like raising a flag with the market on that kind of stuff you know I I I can I can make statements like this and kind of you know leave the breadcrumbs for people to think about that and do some of their own work and think about whether there's good value there. But it's it's kind of a different kettle of fish to go out and put a flag down in the form of a study that says, "Hey, there's a de there's a development opportunity that looks like X because you at that point you then kind of step in a you open a you open a door where there's kind of um follow through that's required or expected on that in the form of advancing it to the next stage. And uh I don't know if that makes the most sense for us right now. I wouldn't rule it out in the future, but I think having competing competing projects that are um uh is is something to be um uh just yeah kind of balanced carefully. And the last thing I'll say about it, I've been pretty transparent about this in the past. The special thing about UT is that it sits 5 km away from the only Karen maintenance copper mine and mill in in the province. the future of that is, you know, not yet uh uh spelled out or there's no guidance on that yet from its owner. I think that day will come at some point in the future. Their hands are full with Red Chris right now, which is approaching feasibility and is in the environmental assessment stage. That's a big project. Their hands are full with it. They can't really, you know, I think that's the reason why they're not uh why Huckleberry is not operating today. Uh but the real simple story there is you've got a mine and mill that is um it it's not done. There's definitely, you know, there's ore, there's reserves in place there, there's value in place there that will be turned on again. And in the natural course of these things, mills like that uh will, especially at when they're toward the end of their reserve life, they will start looking for, hey, what kind of satellite uh feed can we get to keep this thing um humming, especially in a high metal price environment, so that we don't trigger a big closure obligation or closure liability. So to to me, that's just a a very logical business um uh outcome. can't can't really dictate the timeline on it, but it it just feels like there's a there's a sensible outcome there for for that uh asset and infrastructure that's in place and UT is a very special situation kind of opportunity for that. So yeah, I mean investors looking at Serge like my my uh my refrain has been pretty consistent here. You can look at Berg, you can run the ruler over it on Berg and say, "Wow, this equity is pretty undervalued." And then kind of underneath that, you've got this this uh second string project at uh at UT, which is like a big resource endowment. Uh again, look at just the gold. Go to the technical report and look at, you know, the uh grade tonnage chart. Ramp the cutoff up really high. Look at what the, you know, higher higher cutoff portion of copper gold's uh resources would be. There's probably a pretty juicy uh interesting project there. Uh and it also sits right next to a mill that will one day be kind of wondering where the where the next 10 years of uh ore is going to come from. So huge amount of option value there that uh is uh is is just there for the taking with no uh it's not not really in our equity price today for sure. >> And I'm sure you and I will be talking about in the future as some of these developments um and some of these assay results and whatnot start coming in. When do you think the next time is going to be that you and I should be sitting down for for an update interview? >> Um yeah, I think certainly before the prefeasibility study is uh released. I I think um you know once we get some additional uh data disclosure out around some of our data that says like okay all of the drill holes that have been drilled since the last resource have been released. So here's kind of a picture of how that uh you know data has has changed. Uh and I think if we you know if we ultimately um render some decisions on uh on you know the size of the project and kind of are are uh in a position to give some guidance on that um you know beforehand in the form of a press release. I think that might uh make sense to to give some added color on that uh as well. So, I I think there's um uh yeah, there's probably enough kind of like fundamental stuff in the works to to justify a an interim update before the before the big one at the delivery of the PFS. >> Yeah. I asked you this last time as well, so I'll I'll ask it to you again, but what's been the biggest criticism you've received of uh Surge in the meantime um over the last four months? >> Um not a lot. Uh, Antonio, to be honest, um, so I I hope this isn't a unsatisfactory answer and I'm not I'm not blowing smoke, but um I I I think the pro I think what we're doing is pretty logical and I think we're being pretty methodical about how we go about it and I think we we frankly get some good feedback and and compliments on it. Um I think people recognize that uh you know this is this would be a big project in Canada and in BC. So in the in the wrong market environment, it's um uh I I think it would be hard to push on this, but this is but it's not that it's the right market environment for this, right? Like if you follow the political discourse in Canada, like this is a like smack in the middle of the bullseye critical minerals project that is uh relevant for what uh Canada is trying to do and what the province of BC is trying to to do. Um and it has the right ingredients on uh the infrastructure and kind of uh yeah like First Nations and community side of things as well. So um but it's yeah I mean it's a it's a big capital project. Um so you know I deal with a lot I I I talk to a lot of investors that I think are uh sometimes um you know are are their their questions relate to how to bridge that gap between you're a small company with a big project. um h how will you build this mine and how does ARM fit into this and um and what's the timeline? Uh and so the the truthful answers to those things are um are there's nothing wrong with those truthful answers. They're like the the they're like the absolutely normal things that you deal with in mining which is that uh you know junior mining companies are in many cases in the business of uh of you know designing de-risking projects doing that hard doing the hard work to actually create an investment opport an an investable construction decision ready opportunity and once you get to that point like lo and behold there's actually a market that is willing to pay uh you know real value for that sort of thing. So um I think you know we're we're in a emerging bull market in our bis in our sector right now and so there's obviously a lot of investors who are maybe new to it that uh haven't lived through these cycles and don't quite haven't quite seen that uh soup to nuts type thing happen a bunch of times and so they're looking at it more from a you know like a self-contained uh you know small business me mentality of like okay you you know how how will you raise all this money to build it yourself and like well you know that's that that is a possibility. Um, and we're but it's not the only possibility. And uh uh but we're we're obviously doing the right things in terms of talking to uh potential JV partners, potential offtake uh uh finance providers, potential, you know, project finance providers in order to kind of put those pieces in the puzzle as we go down the road. But but uh but even that's not always necessary. It's like sometimes you you have a project that you know you de-risk it enough you you kind of you put you put it on a plate enough that uh there's a market that emerges that um uh that can you know take it uh take it from there. Um so so it's that and then it's I think a lot of the a lot of the um the stuff around just BC right and that's a again it's an education type thing right like I think uh I think there's a lot of projects in BC that have been around for a long time and uh people have fatigue about it and they don't always kind of understand what what developments have happened under the under the hood and uh and how things are you know changing today versus uh you know 10 years ago and uh yeah I think on the I I think on the it's a bit of a catch all term, but on like the social license and permitting type uh type square. Again, I'll just emphasize it's complex in VC, but not in a not in a necessarily bad way. Like I think there's a ton of opportunities for just like win-winwin type situations emerging and the societal kind of attitude toward towards this is uh is as good as it's ever been in BC. And I'm not I'm not the only one saying that. like a lot of my a lot of my peers, a lot of the just kind of market commentators that have a BC lens are uh are in kind of furious agreement on that that there's um yeah, there's just a real a real positive attitude in the province right now to see uh mineral development uh advance. >> What about I ask you what you the biggest criticism is you might have gotten over the surge story. What's the biggest criticism you've got of me? What did you can't come here hoping to talk about that I've have not brought up or um you know something else along those lines? >> Hard question to answer. Again I I I don't uh not in receipt of a lot of that sort of criticism but um uh no I I think we've covered um a lot of a lot of waterfront here. Um what can I say? like I I think the I I think it's been a really interesting market environment in the last um several months. Um obviously we've seen that borne out in uh the the share price environment for a lot of these equities uh the equity capital market environment. So we were early to that. We did a financing as I said in July and I had a few folks saying, "Oh, you're you're lucky you got that deal off uh before the summer holidays and then lo and behold, August was like, you know, the one of the busiest Augusts probably ever for mining financings in uh the Canadian market. So, uh very busy like uh ECM time right now. And I'm hearing from lots of other corners of the market that um yeah like there's just a lot of demand for the stuff which is um maybe uh maybe indicating a yeah like a inflection point in the market uh you know asset rotation out of non-mining equities non non-mining asset classes uh into uh into our space and so um yeah I I'm look I mean the the seat I'm in is is a very is one of long-term thinking and I'm I'm not to use my earlier metaphor of like lily pad hopping. I'm just I'm not able to engage in that type of stuff and as a result I I kind of you know keep a posture that is is not uh really geared towards that type of stuff. I'm trying to I'm trying to make like, you know, 10 year decisions, 10 year bets on things and uh so that requires quite a lot of patience. And so everything that everything that I'm seeing, everything that I'm saying is like literally been the same thing that I have been saying and seeing for 5 years. it just feels like it's uh starting to actually um uh it's starting to become a little bit more um recognized or something like the you know uh feel I feel like uh I've been early early to to this particular thematic for um for a while but uh you know what I've been saying for many years uh instead of people disagreeing there's there's kind of more agreement with it now. So, I'm hopeful that there's a uh I'm hopeful that we're entering a market environment that's like more constructive uh for these things cuz um it's been it's been uh hard yards. And I think uh uh yeah, but I I think like just to kind of bring this back to maybe why you're why some of your listeners listen to this stuff like from an investment uh opportunity perspective. It's like and this will be a repeat of what I said on our last conversation like I I feel that at surge we have been adding value very consistently for five years and the the the rewards for that in the form of like you know equity market value have like really only just kind of peaked their head above the parapet and so uh I I think there's a a long road of opportunity ahead of us. So I'm very excited. Uh it's a it's been a fun year in that regard. I think uh delivering a catalyst like a prefeasibility on a project that could uh you know be in that snack bracket of like the largest develop copper development opportunity in Canada is a is a really great uh great thing to be a part of. We've got a really good team around us. Uh we're actually out hiring right now for uh you know kind of a VP environment role. So great to see the team team growing. So yeah, I don't know. it just feels like stuff's firing on all cylinders including the market conditions at the moment. And so um that's the right uh that's the right kind of um set of ingredients to just see stuff really really start to happen. So um yeah, I'm excited. It's it's a great opportunity to be, you know, sharing that with uh on platforms like this. So yeah, >> thank you so much for doing this. I really do appreciate you investing um yeah almost two hours again in me this time and I'm looking forward to our next conversation. >> Likewise. Thanks a lot. >> And as always, thanks to everyone for watching Resource Talks. I have a couple of more things to say though. The fact that this company was interviewed here today does not mean that they're necessarily a good or a bad company. I'm not here to endorse nor attack anyone. I am simply here to ask some questions. 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