The Board of Directors of Surge Exploration Inc. (TSXV:SUR) announced the spin-off of its interests in Hedge Hog and Mineral Mountain exploration projects in British Columbia on January 9, 2019. The transaction will be carried out by way of statutory plan of arrangement pursuant to the Business Corporations Act (British Columbia). Under the strategic reorganization of the Surge Exploration's assets, it would spin off its interests in the Hedge Hog and Mineral Mountain exploration projects in British Columbia into a newly incorporated subsidiary CuGold Corp. Under the terms of the spin-out, shareholders of Surge would exchange their existing common shares of Surge for the same number of new common shares of Surge (having the identical terms of the existing Surge common shares) and common shares of CuGold. The number of common shares of CuGold to be issued to each Surge shareholder under the spin-out has not yet been determined. There will be no change in shareholders’ holdings in Surge as a result of the spin-out. Surge will continue to hold its interest in its cobalt projects in both Chile and Ontario, as well as, its lithium brine project in Chile. In connection with the spin-out, Surge intends to complete a non-brokered private placement (the Financing) into CuGold for a maximum of 15 million units at a price of CAD 0.05 per unit for gross proceeds of CAD 0.75 million. The net proceeds of the financing will be used to fund, among other things, the working capital of CuGold. Surge intends to seek a listing of the CuGold common shares on the CSE but no assurance can be provided that such a listing will be obtained. Any such listing will be subject to CuGold fulfilling all of the requirements of the applicable stock exchange. The proposed spin-out will be subject to the approval of Surge’s shareholders which Surge intends to seek at a special meeting of shareholders. The plan of arrangement is subject to TSX Venture Exchange approval and the spin-out also requires the approval of the British Columbia Supreme Court. The date for the shareholders meeting has not yet been determined. The Board of Directors of Surge Exploration Inc. has approved, in principle the strategic reorganization plan.