Surge Exploration has entered into a non-binding Memorandum of Understanding with Mr. Miguel Angel Pérez Vargas (“MAPV”) for an option to acquire up to 100% of the Incahuasi Lithium Project in the prolific Antofagasta Region in Northern Chile.
This transaction is subject to additional due diligence by Surge, the negotiation and execution of a Definitive and Final Option Agreement between Surge and MAPV, as well as TSX Venture Exchange approval.
To read the news release, dated October 31, 2018, announcing the Incahuasi Lithium Project, please click here
Tenure Map – Incahuasi Salar
The property is located on the northernmost section of the Incahuasi salar, 75 km southeast from both the town of Tilomonte, Chile and the Salar de Atacama, where mining is the largest economic activity, and the mining industry is one of the region’s major employers. The Incahuasi salar is located on the national border between Chile and Argentina at an elevation of 3,260 m. The Incahuasi Lithium Project consists of 10 mineral exploration concessions totalling 2,300 hectares with the adjoining 9,843 hectare property located directly over the national border in Argentina is held by Advantage Lithium (TSX-V: AAL OTCQB:AVLIF).
The Surrounding Region
Map of Chile – Incahuasi Property
The area of interest inside the lithium triangle is well-known to be the world’s largest and actively mined source of lithium with over two-thirds of the global supply of lithium contained within its boundaries. The proposed Incahuasi lithium exploration concessions lie beside existing lithium exploration operations in Argentina that are held by other publicly traded mining companies.
The Incahuasi Lithium Project benefits from excellent infrastructure, energy supply, and highway access.
Subject to completion of a comprehensive due diligence process by Surge, the Company and MAPV intend to enter into a Definitive Option Agreement (the “Agreement”), will require Surge to make certain cash and common share payments totalling USD$2.22 million and making certain work and development commitments during the term of the option agreement.
The exploration phase will start immediately after the conclusion of the Option Agreement, up to a total period of 4 years, with the assurance that Surge completes a minimum of a geophysical survey and at least one drill hole within 24 months from the Effective Date (the “Exploration Program”).
The Company intends to undertake a preliminary resource definition program upon receipt of the National Instrument 43-101 report, which is expected to be completed in 2019.
Once Surge has completed all the conditions of the Agreement, it will acquire 100% interest in the Incahuasi Lithium Project.
Once Surge completes all the prerequisites of the Agreement, and therefore owns the rights to the lithium mineral claims, MAPV shall receive a 2% Net Smelter Returns (“NSR”) Royalties in the Incahuasi Lithium Project. Surge will retain the right to repurchase 50% of the NSR from MAPV at a price of USD$3,500,000.
As mentioned above, this Transaction is subject to formal TSX Venture Exchange approval. As per the terms of the non-binding MOU, a binding Definitive Option Agreement will be negotiated within the next 90 days by both parties, and is subject to the terms contained within the non-binding MOU.
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