In addition to the JV Agreement, Surge US and Evolution entered into a Contribution Agreement (the “Contribution Agreement”) pursuant to which each party transferred certain assets that they each owned in connection with the NNLP to the JV. The initial focus of the JV will be on facilitating the completion of a Preliminary Feasibility Study (“PFS”) for the purpose of evaluating the potential for the proposed development of the NNLP.
Material terms of the JV Agreement and the Contribution Agreement
Under the contribution agreement, Surge US has contributed all of its mining claims and mineral rights that are part of the NNLP to the JV. Evolution has contributed its 75% mineral interest to the 880 hectare private land portion within the NNLP. These mineral interests were part of the preliminary economic assessment recently announced by Surge. In addition, Evolution will contribute its 75% mineral rights to more than 21,000 hectares of private land in and around the NNLP. Maps of the JV’s mineral rights and claims are shown in Figures 1 and 2 below.
The JV Agreement sets forth the terms and conditions applicable to the JV, including, among other things, the ownership interests between Surge US and Evolution, the governance framework of the JV, defaults and the financial obligations of each party.
Surge US’s ownership interest in the JV will initially be 77% (with Evolution owning the remaining 23% ownership interest). Pursuant to and subject to the terms of the JV Agreement, Evolution will solely finance, in phases and subject to certain conditions, up to CAD$10,000,000 (the “Financing Commitment”) for the purpose of financing a PFS in exchange for additional ownership interests in the JV, of which CAD$3,000,000 is expected to be funded on or before December 5, 2025 (the “Initial Commitment”). Upon receipt of the initial commitment by the JV, Surge US is expected to own 74.15% of the ownership interest, with Evolution owed the remaining 25.85%. Assuming Evolution meets the financing obligation in its entirety, Evolution’s ownership interest in the joint venture will increase to 32.5% (with Surge US owning the remaining 67.5%). Subject to the terms of the JV Agreement, upon full payment of the financing obligation, any additional expenses of the JV in accordance with an approved budget will be jointly funded by Surge US and Evolution on a pro rata basis consistent with their ownership interests in the JV.
The JV will be primarily governed by its operating committee (the “Operating Committee”), which will, among other things, determine the general policies, objectives and actions of the JV and its management team. The Operating Committee will consist of five appointees: three initially appointed by Surge US and two initially appointed by Evolution. As set forth in the JV Agreement, certain Operating Committee decisions require the approval of appointees representing members who own at least 80% of the ownership interests of the JV (a “supermajority decision”). Matters requiring a supermajority decision include matters relating to, among other things: (a) commissioning and conducting a feasibility study; b) suspending or restricting activities for a period of more than 90 days; (c) the sale or other disposition of all or substantially all of the assets of the JV; (d) making or approving material changes to the JV’s operations; e) approving budgets and programs of the JU; and (f) the appointment, replacement or removal of senior officers of the JV.
Under the JV Agreement, Surge US is the General Manager of the NNLP (the “Manager”) for as long as Surge US maintains a greater than 50% ownership interest in the JV and otherwise can only be dismissed under certain circumstances. The Manager will have overall day-to-day management responsibility for the activities of the JV, in accordance with the terms of the JV Agreement.
The JV Agreement also contains certain rights in favor of both Surge US and Evolution with respect to rights of first refusal, drag-along rights and drag-along rights in connection with the direct or indirect transfer of each party’s ownership interests in the JV.
The JV Agreement and Contribution Agreement will be available on Surge’s SEDAR+ profile at sedarplus.ca.
Mr. Greg Reimer, Chief Executive Officer and Directorcommented: “Surge is thrilled to have entered into definitive agreements to formally establish the joint venture with Evolution Mining on the NNLP. This marks an important milestone in advancing one of the most promising lithium assets in the United States. Now that the partnership is official, we are ready to accelerate the project’s development and meet the growing demand for critical battery metals.”
Figure 1
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Figure 2
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The company also announced that it has granted a total of 3.2 million stock options, exercisable for a period of five years, at an exercise price of 60 cents per share to certain directors, officers and consultants.
About Surge Battery Metals Inc.
Surge Battery Metals, a Canadian-based mineral exploration company, is leading the way in securing the supply of domestic lithium through its active involvement in the Nevada North Lithium Project. The project focuses on exploring for clean, high-quality lithium energy metals in Nevada, USA, a crucial element for powering electric vehicles. With a primary listing on the TSX Venture Exchange in Canada and the OTCQX market in the US, Surge Battery Metals Inc. strategically positioned as a key player in advancing lithium exploration.
About Evolution Mining Limited
Evolution is a leading, globally relevant gold miner. Evolution operates six mines, including five wholly owned mines: Cowal in New South Wales, Ernest Henry and Mt Rawdon in Queensland, Mungari in Western Australia and Red Lake in Ontario, Canada, and an 80% stake in Northparkes in New South Wales.
On behalf of the Board of Directors
“Greg Reimer”
Greg Reimer,
Director, President and CEO
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Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This document may contain certain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used in this press release, the words “anticipate,” “believe,” “estimate,” “expect,” “target,” “plan” or “scheduled,” “possible,” “potential,” “predict,” “intend,” “may,” “plans” and similar words or expressions identify forward-looking statements or information. Forward-looking statements herein include statements regarding the timing of the Initial Commitment and future ownership interests. Such statements represent the Company’s current views with respect to future events and are necessarily based on various assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political, environmental (including endangered species, habitat conservation and water-related risks) and social risks, contingencies and uncertainties, including risks related to Surge US’s ability to meet its obligations under the JV Agreement. Many factors, both known and unknown, could cause results, performance or achievements to be materially different from those expressed or implied by. such forward-looking statements. The Company does not intend, and assumes no obligation, to update these forward-looking statements or information to reflect any change in assumptions or changes in circumstances or other events affecting such statements and information, other than as required by applicable laws, rules and regulations.
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