If Surge Copper’s (TSXV: SURG; US-OTC: SRGXF) Berg copper-moly porphyry project in central B.C. were operating today, its production profile of 126 million lb. copper a year over a 30-year mine life would make it a top-three copper-producing mine in Canada.
It would be alongside Teck Resources’ (TSX: TECK.A/TECK.B; NYSE: TECK) Highland Valley copper-moly mine (225 million lb. copper produced in 2024) and Taseko Metals’ (TSX: TKO; NYSE: TGB) Gibraltar copper-moly mine (106 million lb. copper produced in 2024), Canada’s largest and second-largest copper producers, respectively.
But Berg wouldn’t just be a top copper producer in Canada, it would be the country’s largest molybdenum producer by nearly an order of magnitude, with 13 million lb. of the critical metal produced annually. Molybdenum, a critical metal renowned for its heat and corrosion resistance, is crucial in high-performance steel applications in industries ranging from aerospace and defense, to energy, chip making and electric vehicles.
“It’s quite a large moly credit so Berg is a unique beast in that sense,” says Surge Copper CEO Leif Nilsson. “Molybdenum is a strategic metal with a lot of important uses that people should care about right now.”
Looking ahead, the company is laying the groundwork to complete a prefeasibility study on Berg toward the end of the year.
Test results
Recent results from comprehensive metallurgical work over the last year have also demonstrated the project is amenable to conventional flotation processes for producing saleable copper and molybdenum concentrates.
Locked cycle tests on over 1,350 kilograms of material returned up to 90.7% copper and 93% molybdenum recoveries to a bulk concentrate grading 29.7% copper. The test-work also confirmed high separation efficiency (molybdenum recoveries of 94.6% to 97.4% with rapid and simple flotation kinetics), and a clean final product with no deleterious elements.
“There’s nothing tricky about the concentrate flow sheet,” adds Nilsson. “Some projects utilize newer technologies, but we’re proposing off-the-shelf flotation. There are no oxide zones, so no SX-EW, and no sulphide leaching. It’s just a traditional concentrate flow sheet.”
Berg, in the central B.C. Tahtsa Ranges about 100 km south of Smithers and 150 km southwest of Prince George, is one of the largest undeveloped copper-molybdenum projects in North America.
The project contains 1.01 billion indicated tonnes grading 0.23% copper, 0.03% molybdenum, 4.6 grams silver and 0.02 grams gold per tonne for contained metal of 5.1 billion lb. copper, 633 million lb. molybdenum, 150 million oz. silver and 744,000 oz. gold. Inferred resources add another 542 million tonnes grading 0.17% copper, 0.02% moly, 3.7 grams silver and 0.02 gram gold for 2.1 billion lb. copper, 288 million lb. molybdenum, 65 million oz. silver and 284,000 oz. gold.
Open pit
A preliminary economic assessment (PEA) completed in June 2023 outlined a single open-pit mine producing 3.8 billion lb. copper and 402 million lb. molybdenum over a mine life of 30 years at life-of-mine C1 cash costs of US$1.75 per lb. copper-equivalent.
The PEA forecast an after-tax net present value (at an 8% discount rate) of C$2.1 billion ($1.55 billion) and a 20% post-tax internal rate of return (IRR). Initial capex of C$1.97 billion could be repaid in 3.9 years. The study used metal prices of $4 per lb. copper, $15 per lb. molybdenum, $23 per oz. silver and $1,800 per oz. gold.
“This is a robust project, the economics are very strong for something of this magnitude,” Nilsson says. “And metal prices have improved since the PEA. Moly is very established at between $20 and $30 per lb. but even if it bottomed out at $10 per lb. over the entire 30-year mine life, you’d still get very strong numbers here.”
The Berg project would still beat the 15% IRR hurdle that Hudbay Minerals (TSX: HBM; NYSE: HBM) has set for an investment decision on its Copper World project, said Nilsson, who recently served as an independent director of Adventus Mining. It was sold last year to Silvercorp Metals (TSX: SVM) for $200 million.
Berg’s geometry is advantageous too, given it’s a single, standalone deposit, rather than multiple pits that would require sequencing. It has a low strip ratio of 1.1:1, the grade is pretty consistent, and there are good levels of copper enrichment near-surface in the chalcocite blanket. What’s more, and “the camp already is starting to look like a pit” and there is already a sizeable erosion profile from post-glaciation, Nilsson explains.
“You drive on the flat roads of the interior plateau from Smithers and then you climb a single hill to get to the camp,” says Nilsson, who prior to joining Surge Copper worked for many years on Bay Street as an investment banker with Macquarie Capital, advising on a wide range of transactions for global mining firms. “There’s a big valley to the west, hemmed in by mountains, so it’s also a good set up for a tailings dam.”
Low emissions
Ore and waste rock will be brought to a crusher at the pit’s edge by haul trucks and an electric overland conveyor will take crushed material to the plant, a design feature that is expected to result in a very low carbon emission footprint given the predominantly hydroelectric grid in B.C.
Its location in the Tahtsa Ranges sets it apart, too. Unlike more remote projects in B.C.’s Golden Triangle or in the Yukon, Nilsson says, Berg lies in the industrial heartland of B.C., a very well-developed area with forestry operations and several mines. They include Artemis Gold’s (TSXV: ARTG) Blackwater gold-silver mine, about 125 km to the southeast, and Imperial Metals’ (TSX: III) Huckleberry mine, now on care and maintenance, about 22 km away.
Other nearby infrastructure includes the Coastal GasLink pipeline, which stretches from near B.C.’s border with Alberta to the liquid natural gasterminal in Kitimat, B.C., about 100 km to the west of Berg. There is also the Kemano Generating Station, which provides power to Rio Tinto’s (NYSE: RIO; ASX: RIO; LSE: RIO) aluminum smelter just 50 km west of the project.
Last year, African Rainbow Minerals (JSE: ARM) invested C$3.8 million for a 15% stake in the company. The South African company has iron ore, nickel, and platinum group metals assets.
“They’re a highly respected, diversified mining company with deep experience in building and operating large-scale mines — exactly the kind of partner you want as you advance a project like Berg,” says Nilsson. “Their investment brings not only strong technical validation, but also the financial strength and long-term outlook that will support us as we move forward.”
Centerra option
Other shareholders include Centerra Gold (TSX: CG), which a 12% stake in the company. Centerra acquired the Berg project through its acquisition of Thompson Creek Metals in 2016 and then optioned 70% of the project to Surge Copper in 2020 for C$5 million in shares and C$8 million in spending commitments. After earning the 70% stake three years later, Surge acquired the remaining 30% in December 2023 by issuing Centerra another 21.22 million shares for a 15% stake in the junior.
The acquisition consolidated Surge Copper’s land package in the district, growing the company’s contiguous holdings to 1,417 sq. km, which include the Ootsa exploration project to the east. Ootsa contains the Seel and Ox porphyry deposits adjacent to the Huckleberry mine. These deposits host an additional 1.7 billion lb. copper, 167 million lb. molybdenum, 30 million oz. silver, and 1.6 million oz. gold in the measured and indicated categories.
With a market cap of $41 million based on 291 million common shares outstanding trading at 15¢ apiece, Berg is undervalued compared to its peers, Nilsson says.
“Berg is one of the most mispriced assets in the market today and there’s no good reason for it,” he says. “It’s an advanced stage project that compares well on fundamentals—scale, economics, simplicity—yet it trades at a fraction of the value of its peers.
“Frequently, the conversation around critical minerals veers toward niche metals with limited end markets, but Berg is different. It’s a copper-molybdenum project with exposure to large, strategic sectors like energy, transportation and technology. It doesn’t depend on major new infrastructure or speculative processing technologies; it’s straightforward and real.”
The preceding Joint Venture Article is PROMOTED CONTENT sponsored by Surge Copper and produced in co-operation with The Northern Miner. Visit: www.surgecopper.com for more information.
