Dear Shareholders
This past year has certainly been a very successful one for Surge Battery Metals at our high-grade, near surface lithium claystone discovery at our Nevada North Lithium Project (NNLP). During this time, we have gone from publishing our highly encouraging 2022 drilling results to executing another successful drilling season in 2023. These programs set the groundwork for filing our permit application for our Exploration Plan of Operations – a major milestone event.
I would be remiss to talk about 2023 without mentioning the deterioration of the lithium carbonate spot price during the year. Share prices of lithium companies have suffered across the board and while there has been volatility in our share price, our year over year performance is strong. I am very optimistic that lithium prices will rebound to better reflect what we believe will be a looming demand/supply imbalance in the future.
In fact, industry forecasters have repeatedly underscored the massive investments needed to meet the consumer demand for EVs. This is compounded by the very ambitious targets set by governments and some of the largest automakers for assuring the mass adoption of EVs. In addition, US government efforts to incentivize EV purchases and the build-out of a secure domestic mine-to-battery supply chain will have a significant influence on domestic lithium supply and demand.
With all these tailwinds working in Surge’s favour a unique opportunity is emerging to become a supplier to the “Made in America” lithium battery marketplace in just a few short years. Our discovery at NNLP continues to return high grades which are at or near surface.
Going forward, I am confident that the deep lithium industry experience and extensive capital markets expertise of our Board of Directors and management team will continue to accelerate the development of the NNLP.
All told, 2024 promises to be a breakout year for Surge with many significant developmental milestones in the pipeline.
Q1 of 2024 is expected to see the completion of our maiden Mineral Resource Estimate — something that investors and markets alike are keenly awaiting. In addition, a Q1 highlight is expected to be the completion of the test work being led by our Board member Dr. Vijay Metha (who benefits from over 50 years’ experience in the lithium industry) to fully optimize lithium recovery in the NNLP flow sheet.
Moving into the spring and summer, we will be applying to reclaim some of our 5-acre disturbance limit. With this, our 2024 drill program is expected to continue to expand the knowledge of our lithium clay discovery.
Additionally, we will be working closely with the Bureau of Land Management (BLM) on our Exploration Plan of Operations permit application throughout 2024. Once approved, the plan is expected to provide for up to 250 acres of disturbance, compared with the currently authorized five acres. This major permitting milestone is expected to allow for in-fill drilling to further define the current mineral resource area and allow for the possible expansion of the known discovery area.
Our final planned milestone catalyst of the year will be the completion of a Preliminary Economic Assessment to confirm the potential economic viability of NNLP.
Thank you for your continued support. As you can see, 2024 will be a very active year for Surge as we advance the NNLP as quickly as possible.
Greg Reimer
President, CEO and Director
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This document may contain certain “Forward-Looking Statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”, “target, “plan” or “planned”, “possible”, “potential”, “forecast”, “intend”, “may”, “schedule” and similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to future prices of commodities including lithium and nickel, the accuracy of mineral or resource exploration activity, reserves or resources, regulatory or government requirements or approvals including approvals of title and mining rights or licenses and environmental, local community or indigenous community approvals, the reliability of third party information, continued access to mineral properties or infrastructure or water, changes in laws, rules and regulations including in the United States, Nevada or California or any other jurisdiction which may impact upon the Company or its properties or the commercial exploitation of those properties, currency risks including the exchange rate of USD$ for CAD$ or other currencies, fluctuations in the market for lithium related products, changes in exploration costs and government royalties, export policies or taxes in the United States or any other jurisdiction and other factors or information. The Company’s current plans, expectations, and intentions with respect to development of its business and of its Nevada properties may be impacted by economic uncertainties arising out of any pandemic or by the impact of current financial and other market conditions (including US government subsidies or incentives) on its ability to secure further financing or funding of its Nevada properties. Such statements represent the Company’s current views with respect to future events and are necessarily based upon several assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political, environmental (including endangered species, habitat preservation and water related risks) and social risks, contingencies, and uncertainties. Many factors, both known and unknown, could cause results, performance, or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements. The Company does not intend, and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules, and regulations.
Dear Shareholders
It is my pleasure to write this letter given our exploration successes in 2022 and to outline the important steps we plan to take in the first part of 2023 to grow our flagship property, the Nevada North Lithium Project (NNLP).
These days, billion-dollar plants to make the massive batteries that power electric vehicles are announced so often that — even if you follow the auto industry — it’s hard to keep track of them all. Cumulatively, it is reported that more than $128 billion of announced investments into electric vehicle plants, battery plants and battery recycling plants have been made to date. In 2022 alone, companies announced more than $73 billion in planned projects — more than three times the previous record set in 2021.
In addition, both car and battery manufacturers have recently moved to “direct sourcing” critical EV raw materials and components from suppliers in North America and free-trade-agreement countries that helps make their supply chains more secure as well as managing cell costs, and sustaining jobs. One such investment in long term lithium supplies was the joint announcement of GM and Lithium Americas (T-LAC) to develop U.S.-sourced lithium production through a $650 Million Equity Investment and Supply Agreement on Jan31, 2023.
Now, Surge Battery Metals has found itself in the enviable position of being able to take advantage of this unprecedented global growth opportunity. As you likely know, significant discoveries at the exploration stage are notoriously difficult to come by and indeed a rare occurrence. We are the 100% owners of a remarkable new lithium discovery in northeastern Nevada; one that exhibits very high lithium values over an impressive area. This new find may rival the Thacker Pass deposit of Lithium Americas or that of American Lithium’s (TSX-V:LI) TLC project near Tonopah Nevada. A lot of work will be needed to solidify the importance and value of our discovery and we are looking forward to completing the necessary steps in the weeks, months, and years ahead. For more information on this project please click here.
Late last year, our maiden drill program at the Nevada North Project returned impressive lithium values over a strike length of approximately 1,600 meters (5,315 feet). Drill results confirmed that highly anomalous lithium values persist to depth in the silty clay unit that that appears to underlie the better soil values observed in samples collected in 2021 and earlier in the summer of 2022. I can confidently say the Company has identified significant potential for a lithium deposit.
Planning for Further Drilling
Subject to final approval of the Bureau of Land Management, the Company plans to conduct both step-out and infill drilling as Phase 2 of the maiden drill program initiated last fall. The first phase was designed to evaluate whether significant surface soil values continued to depth and to evaluate the results before continuing further into the program. It is anticipated that a further 7 holes may be completed in Phase 2. A budget of approximately $500,000 approved and requisitions for drill bids have gone out. The program will get underway as soon regulatory approvals are given and as weather permits.
Metallurgical and Baseline Environmental Studies
The Company is underway with baseline metallurgical evaluations on the composition of various clay samples recovered in the first phase of drilling. X-ray diffraction studies, together with the clays chemical properties will provide information on how lithium occurs with the clay minerals recovered in the drilling. Furthermore, mineralogical studies can determine the distribution of lithium throughout the clay that may assist in identifying the physical beneficiation techniques required, if any, to upgrade the lithium content.
In addition, the Company has issued several requests for proposals that include a maiden NI 43-101 report and initial environmental baseline studies. We plan to announce acceptance of these studies in the very near future.
2023 will be an active year for the Company as we focus our exploration efforts on the Nevada North Lithium Project. Our aim is to advance this important new discovery as quickly as possible and build the Project into a long-term robust asset benefiting all shareholders.
Committed to being a leading ESG (Environmental, Social, and Corporate Governance) compliant company.
