Surge Battery Metals (TSXV: NILI) has received at least C$30 million ($21.6 million) in equity investment to support the development of its flagship lithium project in Nevada.
Under a private placement announced on Wednesday, Surge said it plans to sell units of the company at a price of C$0.60 per unit to raise C$30 million, with an option to increase the amount to C$36 million. Each of the units comprises one share of the company and one share purchase warrant exercisable at C$0.90 per share.
The financing is being led by Brian Paes-Braga, managing partner at SAF Group, and Michael Hess of Hess Capital, both of whom will join and co-lead Surge’s strategic advisory board.
“With Brian and Michael leading our strategic advisory board, we believe that we have the capital, the expertise, and the relationships to move this project at the pace the current environment demands,” Graham Harris, chairman of Surge, commented in a news release.
Brian Paes-Braga, in addition to his role at SAF, which has approximately $8 billion in market capitalization across its current growth equity portfolio, is also the founder of Lithium X (TSXV: LIX), which also has a project in Nevada. Hess is the co-chairman of The Metals Royalty Company (NASDAQ: TMCR) and a board member of TMC the metals company (NASDAQ: TMC).
The unit private placement follows the company’s recent announcement of its plans to list on the Nasdaq exchange in the coming months, with a proposed name change to Lithium X2 Mining.
Shares of Surge Battery Metals surged 11.2% by market close in Toronto following the financing announcement, taking its market capitalization to C$203.7 million ($146.6 million).
Fully funded lithium project
Upon completion of financing, the company expects to be fully funded for its Nevada North lithium project (NNLP), with about C$70 million in its treasury, Surge said.
Held under NNLP comprises a total of 685 mineral claims covering more than 5,265 hectares of land in northeastern Nevada. The site is located about 200 miles west of Thacker Pass, host to the largest known measured lithium resource in the US and a project .
Like Thacker Pass, Surge considers the NLLP to be of significant national purchase, highlighting that the project hosts the highest-grade lithium clay resource in the country. It is estimated that the NNLP holds more than 10.5 million tonnes of lithium carbonate equivalent (LCE) in measured and indicated resources.
Based on this resource, Surge released last year a preliminary economic assessment last year, outlining a potential 42-year lithium mine with average annual production of 86,300 tonnes LCE. For comparison, Thacker Pass’ phase 1 production is pegged at 40,000 tonnes.
The PEA gave NNLP an after-tax net present value of $9.17 billion and an internal rate of return of 22.8%, calculated using a discount rate of 8%. Total project capex was estimated at $5.32 billion, with a payback of 4.7 years.
Commenting on his involvement in the project, Paes-Braga said NNLP represents one of SAF’s most compelling lithium assets in development.
“Our investment and technical teams have assessed countless projects over the past eight years since our exit in Lithium X, resulting in Nevada North standing out in all aspects of what we look for: scale, location and team,” he added.
