Surge Copper Announces C$3.8 Million Strategic Investment by African Rainbow Minerals Limited

Vancouver, British Columbia, April 02, 2024 (GLOBE NEWSWIRE) -- Surge Copper Corp. (TSXV: SURG) (OTCQB: SRGXF) (Frankfurt: G6D2) (“Surge” or the “Company”) is pleased to announce that it has entered into a subscription agreement for a private placement financing (the “Strategic Placement”) with a new cornerstone strategic investor, African Rainbow Minerals Limited (JSE: ARI) (“ARM”).

Under the terms of the Strategic Placement, ARM, through its wholly-owned subsidiary ARM Copper Company Proprietary Limited (“ARM Copper”), will subscribe for 39,608,708 common shares (the “Strategic Placement Common Shares”) of Surge at C$0.095 per Strategic Placement Common Share, representing an approximately 18% premium to the 20-day volume weighted average price of the Company’s common shares on the TSX Venture Exchange as at April 1, 2024, for gross proceeds of approximately C$3,762,827. Upon completion of the Strategic Placement, ARM (through ARM Copper) will own 15.0% of Surge’s issued and outstanding common shares on a non-diluted basis.

Leif Nilsson, Chief Executive Officer, commented: “We are excited to be welcoming ARM as a strategic investor into Surge. They bring significant experience in the development and operation of large-scale mines, with a foundational commitment to operational efficiency and fostering strong community ties. We look forward to leveraging this expertise as we advance our wholly owned Berg project and surrounding exploration targets in this emerging critical minerals district.”

Concurrent with the closing of the Strategic Placement, the Company, ARM and ARM Copper will enter into an investor rights agreement (the “IRA”). The IRA will grant ARM certain rights in the event it maintains minimum ownership thresholds in the Company, including the right to maintain its ownership position through future equity financings, and the right to appoint a member to a technical advisory committee to be formed following closing of the Strategic Placement. Additionally, the IRA will include a covenant from ARM Copper, for a period of two years, to vote in favour of management’s recommendations on routine matters to be approved by the shareholders of the Company. Furthermore, ARM Copper will agree in the IRA to a two-year standstill with respect to the acquisition of ‎additional securities of the Company which would result in ARM Copper owning greater than 19.9% of ‎the then issued and outstanding common shares of the Company on a non-diluted basis, subject ‎to exceptions customary for a standstill of this nature. So long as ARM Copper’s ownership interest is at ‎least 19.9% of Surge’s issued and outstanding common shares on a non-diluted basis, ARM Copper will ‎have the right to nominate one director to the Company’s board of directors.‎