Surge Copper prefeasibility more than doubles Berg project value

A prefeasibility study for Surge Copper’s (TSXV: SURG) Berg project in central British Columbia more than doubles the net present value (NPV) to C$4.6 billion while also doubling the initial costs over a previous study. 

At an 8% discount, Berg’s post-tax NPV is well above the C$2.1 billion NPV of the preliminary economic assessment (PEA) from 2023, Surge reported Monday. The project’s internal rate of return (IRR) gained 4% to 24%, though costs rose twice as high to C$4.7 billion. Berg is about 590 km north of Vancouver.

“Completion of the Berg PFS marks an important milestone for Surge and materially advances one of Canada’s most significant undeveloped copper projects,” Surge CEO Leif Nilsson said in a release.

“Berg now stands out not only for its scale, but also for the quality of its development profile, with long-life production of copper as a primary metal, and industry-leading molybdenum and silver output, strong infrastructure advantages, and access to low-carbon hydroelectric power.”

Shares of Surge Copper gained 13% to C$0.83 apiece in morning trading in Toronto, before falling to C$0.73 each in the afternoon. The company has a market capitalization of C$281.9 million.

32% more copper

The new study reinforces Berg’s status as a major undeveloped copper project in Canada, putting it among the country’s larger potential red metal assets and raising its profile as governments seek new sources of the metal needed for electrification.

Despite the study’s higher estimated costs, it also raises projected output at the open pit mine, with copper production up 32% to 4.9 billion lb. and molybdenum up 50% to 602 million lb. over a 28-year life. Silver output would rise 8% to 89 million ounces. Mine life is two years less than in the PEA.

The study assumed metal prices $4.75 per lb. copper, $20 per lb. molybdenum, $45 per oz. silver and $3,500 per oz. gold.

Proven reserves

Further boosting the project economics are proven and probable reserves in the study, with Berg hosting 1.2 billion tonnes grading 0.22% copper, 0.026% molybdenum, 4.1 grams silver per tonne and 0.02 gram gold. That totals contained metal of 5.8 billion lb. of copper, 687 million lb. of molybdenum, 160 million oz. of silver and 800,000 oz. of gold.

.The new resource is based on 66,229 metres of drilling, Surge said, as well as expanded gold and silver assay coverage from historical core, updated geological and geostatistical modelling, and revised metallurgical recovery assumptions.

Environmental assessments

In parallel, the company is also planning for an Indigenous-led assessment to be carried out by the Office of the Wet’suwet’en, the engagement and coordination office mandated by the Wet’suwet’en Houses and Hereditary Chiefs.

“Chief Casbit and Thin House of the Gilseyhu Clan look forward to continuing to work with Surge Copper to implement a robust Wet’suwet’en assessment process for the proposed Berg copper project,” the Office said.

“We’re encouraged by projects like Surge’s Berg copper project to help British Columbia responsibly develop the critical minerals the world needs,” BC Premier David Eby said in a statement.