Surge Exploration (TSX?EUR?V: SUR) announced on Wednesday that its board of directors approved a strategic reorganization of the company's assets that would spin off its interests in the "Hedge Hog" and "Mineral Mountain" exploration projects, both copper/gold projects in British Columbia, Canada.
The exploration projects form a newly incorporated subsidiary, CuGold Corp. Surge will continue to hold its interest in its cobalt projects in both Chile and Ontario, and its lithium brine project in Chile.
Under the terms of the spin-out, shareholders of Surge would exchange their existing common shares of Surge for the same number of new common shares of Surge and common shares of CuGold. There will be no change in shareholders' holdings in Surge as a result of the spin-out.
The company stated that the net proceeds of the financing will be used to fund the working capital of CuGold, the negotiation of potential joint venture opportunities, exploration projects and potential future acquisitions.
The proposed spin-out will be subject to the approval of Surge's shareholders.