African Rainbow Minerals (JSE: ARI) has increased its stake in Canadian junior Surge Copper (TSXV: SURG) by another 6.46% with the purchase of approximately 25.78 million shares.
The share purchases were made at C$0.175 each, above Surge Copper’s current market price of C$0.14 per share, for total proceeds of approximately C$4.51 million.
ARM, which mainly operates gold, platinum and coal mines in South Africa, first invested in Surge Copper in April 2024, purchasing about 39.61 million shares at C$0.095 each. It subsequently bought another 1.58 million shares at C$0.15 in June after exercising its investor rights to prevent dilution.
With the latest purchase, ARM now owns approximately 68.74 million of Surge Copper’s shares or 19.9% of those outstanding. In a statement, the African miner says it acquired the shares for investment purposes.
At market close Friday, Surge Copper had a market capitalization of C44.9 million.
Large copper-molybdenum project
Surge’s main asset is the 100%-owned Berg project in central British Columbia, which it is developing as a standalone open-pit mine. The underlying porphyry deposit has more than 1 billion tonnes in measured and indicated resources containing 5.1 billion lb. of copper and 633 million tonnes of molybdenum.
A preliminary economic assessment published in 2023 outlined a 30-year mine life with total production of 3.8 billion lb. copper and 402 million lb. molybdenum. This would make Berg one of the top copper producers in Canada, and by far the largest molybdenum producer.
Based on the production profile, the study gave the project a post-tax net present value of C$2.1 billion and a 20% internal rate of return. The initial capital is estimated at C$1.97 billion, which would be paid back over four years.
The company is currently in the process of completing a resource update and advancing the project towards the pre-feasibility stage.