Why South America is key to Surge’s cobalt exploration model (Video)

CEO of Surge Exploration discusses the future of the lithium ion battery.

Surge Exploration Inc. (TSX.V: SUR) is a TSX Venture Exchange Tier 2 mining exploration company with head offices located in Vancouver, Canada and a satellite international office in Santiago, Chile. Surge’s goal is to locate, evaluate and explore early stage cobalt and lithium mineral properties in the mining-friendly jurisdictions of Canada, the United States and South America.

Hannah Bernard: Hi, I’m Hannah Bernard. You’re watching Market One Minute, and today I am joined by Tim Fernback, President and CEO of Surge Exploration. Tim, let’s start off by talking about the focus of the company. Why are you focused on two metals: cobalt and lithium?
Tim Fernback: We’re a green energy company and we are focused on metals that are important to the green energy movement. Lithium and cobalt are both important parts of [the] lithium ion battery, which is fueling the green energy movement.
Hannah Bernard: Okay.
Tim Fernback: So, we believe, fully, in the future of the lithium ion battery. Over the next 50 years, they’ll be in multiple uses, and cobalt and lithium are both two key components of that battery.
Hannah Bernard: Can you explain why you’re focusing on South America, and how that adds shareholder value?
Tim Fernback: We’re focused in South America because we can find unique opportunities to find cobalt where others are looking for metals like copper, and iron ore. We’ve got great partnerships in Chile with our exploration team and office down there, and great associations with multi-billion dollar companies such as Cap. Our financial partner, Wellington Shields in New York, is very much bullish on the South American mineral exploration business, and we believe that they can guide us through various financing options for our projects down there.
We have a board member, Bill Bennett, who’s not only the former Mines Minister in B.C. for 12 years, but he also has significant experience in the Chilean market, for example. So, we are really bullish on the opportunities that we can gather from the South American market.
Hannah Bernard: And, you mentioned that you believe in the future of the lithium ion battery, but what do you see for the entire market of cobalt and lithium as a whole with regards to it?
Tim Fernback: So, cobalt and lithium are key components to the battery. Cobalt makes the battery efficient and safe, and lithium makes the battery very energetic and conductive. Lithium, on itself, is a very explosive metal. Cobalt stabilizes that metal in the battery. We believe that they’re key components, and large components of these batteries. So, we think that the future for cobalt and lithium, both are great as more batteries get created.
Hannah Bernard: Let’s talk about your process of seeking out properties globally, and how they fit your exploration model.
Tim Fernback: So, we’re looking for the best properties that we can that are in the cobalt and lithium space. We are looking, specifically, for those metals because we’re big believers in the lithium ion battery and their key components to that battery. So, we are looking for advanced exploration projects. Ontario, we have a project that has over 10 thousand metres of drilling already on it. It’s in a producing region that had produced over 4 million pounds of cobalt in the past, and we believe that we have the only historic resource on our property in that whole area.
So, we’re in a great position to advance that project and advance it for the benefit of our shareholders. Similarly, in Chile, we’ve negotiated a project from a very, very large iron ore company, multi-billion dollar iron ore company in Chile. They’re focused on iron ore. We’re focused on cobalt. Cobalt is found within iron ore deposits and copper deposits. So, we found this project that has a higher than normal concentration of cobalt inside their iron ore property. Doesn’t fit their criteria, very much fits our criteria. Those are the kinds of examples of properties that we’re looking for, for exploration model.
Hannah Bernard: And, what is the effect in reducing the amount of cobalt actually used in the lithium ion battery on the entire demand of cobalt?
Tim Fernback: Well, back in June of 2018, Elon Musk quoted, tweeted and said that cobalt was going to be eliminated in the Tesla battery. We don’t believe that that’s the case. Cobalt itself as an element as an essential component of the battery is going to be eliminated. But, there will be reduced amounts of cobalt inside the battery as manufacturers try to get the cost of the overall battery down. Because there’s so many more batteries that are going to be created, and there’s such a huge demand of cobalt within an electric vehicle battery, per se. There’s going to be, actually, about 10 times more cobalt produced in the near future, by 2030, then there is today. So, there’s a huge demand for metals like cobalt in the future.
Hannah Bernard: Tim, we have an investor audience here, so tell us why Surge Exploration is a good investment opportunity.
Tim Fernback: So, Surge is a very early stage exploration company that has a low market capitalization right now. We believe that we have great projects that are advanced exploration projects where you’re going to see great numbers of cobalt that are going to come from those projects in the future. We have an exploration team in Chile that is very top notch, and they’re able to get us proper projects that meet our criteria. I believe that we can advance these projects to a production state.
Hannah Bernard: Well, it sounds like a lot of great news for our investors to look forward to. Thanks for sharing that with us, Tim.
Tim Fernback: Thank you.