African Rainbow boosts Surge Copper stake to 19.9%

African Rainbow Minerals (JSE: ARI), controlled by billionaire Patrice Motsepe, has increased its stake by another 6.5% in junior Surge Copper (TSXV: SURG) which is developing the Berg project that could be one of the top Canadian producers of copper and molybdenum. 

The purchase of nearly 26 million shares were made at 17.5¢ each, above Surge Copper’s Friday market price of 14¢ per share, for total proceeds of about $4.51 million.

ARM, which mainly operates gold, platinum and coal mines in South Africa, first invested in Surge Copper in April 2024. Surge is completing a resource update on Berg — which might produce 3.8 billion lb. copper and 402 million lb. molybdenum over 30 years according to a 2023 study — and advancing the project towards the pre-feasibility stage.

With the latest purchase, ARM now owns 68.7 million of Surge Copper’s shares or 19.9% of those outstanding. Motsepe is executive chairman and the largest ARM shareholder through his family trust, making him the ultimate owner. In a statement, the African miner says it acquired the shares for investment purposes.

At market close Friday, Surge Copper had a market capitalization of $44.9 million.

Copper-molybdenum

Surge’s main asset, the Berg project in central British Columbia, is being designed as a standalone open-pit mine. The underlying porphyry deposit has more than 1 billion tonnes in measured and indicated resources containing 5.1 billion lb. of copper and 633 million tonnes of molybdenum.

Based on the production profile, the study gave the project a post-tax net present value of $2.1 billion and a 20% internal rate of return. The initial capital is estimated at $1.97 billion, which would be paid back over four years.