P2 Gold PEA pegs Gabbs posttax NPV at $163.1M (U.S.)

Jun 29, 2023

2023-06-29 11:37 ET – News Release

Mr. Joe Ovsenek reports

P2 GOLD ANNOUNCES POSITIVE GABBS PRELIMINARY ECONOMIC ASSESSMENT

P2 Gold Inc. has released results from a positive preliminary economic assessment (PEA) on its wholly owned gold-copper Gabbs project located on the Walker Lane trend in Nevada. The PEA was prepared by Kappes, Cassiday & Associates (KCA) of Reno, Nev., with mineral resource and mining contributions from P&E Mining Consultants Inc. in accordance with National Instrument 43-101 — Standards of Disclosure for Mineral Projects. An NI 43-101 technical report will be prepared and posted on P2 Gold’s website and the company’s profile on SEDAR within 45 days of the date of this news release.

PEA highlights:

Open pit, heap leach operation focused predominantly on oxide gold and copper Mineral Resources (Phase One), mining 43.4 million leachable tonnes and 102.3 million waste tonnes;
After-tax net present value (5% discount rate) of US$163.1 million and internal rate of return of 16.7% at US$1,950 gold and $4.50 copper;
Mine life of 11.1 years, with an average processing rate of 11,000 tonnes per day;
LOM gold equivalent production of 837,000 ounces (43.4 million tonnes @ 0.54 g/t gold and 0.25% copper) and LOM gold production of 562,100 ounces;
Estimated pre-production capital cost, including contingencies, of US$230.2 million

“The PEA provides a solid plan for advancing Phase One development at Gabbs, where we are taking a phased approach to production,” commented Joe Ovsenek, President and CEO of P2. “With an initial focus primarily on the oxide resources, we can shorten and simplify the path to production with an open pit, heap leach operation. Our next goal is to optimize the mine plan and capex, evaluate contract mining and complete additional metallurgy, which we believe will significantly increase the rate of return at lower metal prices. In addition, Gabbs has considerable oxide Mineral Resource expansion potential to extend Phase One operations beyond that contemplated in the PEA. Phase Two will focus on the development of the sulphide mineralization which sits below the oxide mineralization. Overall, we expect Gabbs to be a long-life gold and copper mine as the oxide mineralization is expanded and the sulphide mineralization is brought online.”

The PEA is preliminary in nature, includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The Company has not defined any Mineral Reserves on the Gabbs Project.

Economic Sensitivities

Base Case metals prices were established by the Company reflecting the Company’s expectations for market conditions at the time of construction financing for the Gabbs Project.

Mining and Processing

Mining

The mineralized material will be mined by standard open-pit mining methods using an owner mining fleet of 90-tonne haul trucks and 11 m 3 hydraulic shovels, fine crushed using a system incorporating a jaw crusher, cone crushers and high-pressure grinding rolls (HPGR), agglomerated with cement and conveyor stacked on the heap leach pad in 8-metre lifts.

Processing

The Gabbs mineralized material is estimated to contain an average of 0.25% copper based on the mine plan used for this PEA. A portion of this copper is cyanide soluble and is expected to be extracted in the heap leach circuit. The cyanide soluble copper has an effect on the cyanide consumption. A SART (sulfidization, acidification, recycling and thickening) plant that releases cyanide associated with the copper cyanide complex, allowing it to be recycled back to the leach process as free cyanide is included. The resulting copper precipitate will be sold, bringing additional revenue to the Project.

Mineralized material will be single-stage leached with a dilute cyanide solution. The gold and copper bearing solution will be collected in the pregnant solution pond and pumped to the SART plant. Pregnant solution will be acidified with sulfuric acid, then copper will be precipitated as sulfides by the addition of sodium hydrosulfide. The precipitate will be thickened and filtered to produce a copper filter cake for shipment to a smelter. The barren solution from the SART plant will be processed in a carbon adsorption-desorption-recovery (ADR) plant to recover gold. The gold will be periodically stripped from the carbon using a desorption process. The gold will be plated on stainless steel cathodes, removed by washing, filtered, dried and then smelted to produce a dore bar.

Opportunities

Contract Mining – evaluate contract mining versus owner fleet;
Metallurgy – complete additional test work to increase recoveries for oxide and sulphide mineralization and evaluate the use of HPGR for potential heap leaching of sulphide mineralization to increase recovery of free gold;
Mineral Resource – expand oxide gold and gold and copper mineralization;
Capex – evaluate equipment alternatives to reduce capital costs;
Mine plan – optimize mine sequencing to increase return on capital.

Gabbs Project 2023 Mineral Resource Estimate

The June 2023 Updated Mineral Resource Estimate (“2023 MRE”) was prepared by P&E based on four diamond drill holes and 27 reverse circulation drill holes completed by the Company in 2021 and 2022 and 494 drill holes completed by prior Gabbs Project operators between 1970 and 2011.

The main difference between the 2023 MRE and the February 2022 Mineral Resource Estimate (see news release dated February 10, 2022) is the decrease in the oxide cut-off grade to 0.28 g/t gold equivalent from 0.35 g/t gold equivalent and an increase in the sulphide cut-off grade to 0.44 g/t gold equivalent from 0.36 g/t gold equivalent. As a result, oxide Mineral Resources have increased and sulphide Mineral Resources have decreased.

Oxide Mineral Resources at Gabbs consist of Indicated Mineral Resources of 724,400 ounces of gold equivalent (30.6 million tonnes grading 0.49 g/t gold and 0.27% copper) and Inferred Mineral Resources of 779,000 ounces of gold equivalent (33.0 million tonnes grading 0.53 g/t gold and 0.23% copper). See Table 5 below for a breakdown of the oxide and sulphide Mineral Resources.

Next Steps

Additional metallurgical test work will be undertaken next to refine metallurgical recoveries for both the oxide and sulphide mineralization. Thereafter, feasibility level studies will commence and will include an evaluation of contract mining versus an owner fleet, equipment alternatives and mine plan optimization. Timing of the metallurgical test work and feasibility level studies will be dependent on the availability of funds.

Qualified persons

The PEA was prepared by Dan Whiteley, P.E. of KCA and Eugene Puritch, P.Eng., FEC, CET, and Andrew Bradfield, P.Eng. of P&E Mining Consultants Inc. (“P&E”) of Brampton, Ontario, each of whom is a “Qualified Person” as defined by NI 43-101 and independent of the Company and has reviewed and approved of the technical content relating to the PEA in this news release.

The 2023 MRE was prepared under the supervision of Eugene Puritch, P.Eng., FEC, CET of P&E Mining Consultants Inc., who is an Independent Qualified Person, as defined by National Instrument 43-101. Mr. Puritch has reviewed and approved the technical contents of this news release relating to the 2023 MRE.

Ken McNaughton, M.A.Sc., P.Eng., Chief Exploration Officer, P2 Gold, is the Qualified Person, as defined by National Instrument 43-101, responsible for the Gabbs Project. Mr. McNaughton has reviewed, verified, and approved the scientific and technical information in this news release.

About P2 Gold Inc.

P2 Gold is a mineral exploration and development company focused on advancing precious metals and copper discoveries and acquisitions in the western United States and British Columbia.

We seek Safe Harbor.

https://www.p2gold.com/