P2 Gold Announces Agreement to Settle Outstanding Debt and Convertible Debenture Unit Offering

VANCOUVER, Feb. 13, 2024 - P2 Gold Inc. ("P2" or the "Company") (TSXV: PGLD) (OTCQB: PGLDF) reports, subject to TSX Venture Exchange (the "Exchange") approval, that it has reached an agreement to settle the outstanding debt related to the acquisition of the Gabbs Project and that it intends to complete a concurrent non-brokered private placement of convertible debenture units (the "Units") for up to $1.7 million (the "Offering").

In settling the debt, P2 has entered into a termination agreement (the "Termination Agreement") with Waterton Nevada Splitter, LLC ("Splitter"), an affiliate of Waterton Precious Metals Fund II Cayman, LP pursuant to which P2 will issue or pay to Splitter (a) US$1 million and 5,231,869 common shares in the capital of the Company ("Shares"), following Exchange approval of the Termination Agreement and Offering, (b) US$125,000 on or before January 31, 2025, and (c) US$125,000 on or before January 31, 2026.

Splitter currently has beneficial ownership of, and control or direction over, 18,320,534 Shares of the Company, representing approximately 16.9% of the issued and outstanding Shares. Following the issuance of 5,231,869 Shares to Waterton under the Termination Agreement, Waterton will have beneficial ownership of, and control or direction over, 23,552,403 Shares, representing 19.9% of the issued and outstanding Shares.

"The team at Waterton has been very supportive as we have worked to advance Gabbs," commented Joe Ovsenek, President and CEO of P2. "The removal of the debt overhang on Gabbs will allow us to continue to move the project forward and to pull back on the sale of a royalty in the short term. Without the time constraints associated with the debt payments, we can assess the best options for financing Gabbs going forward as we optimize mine development."

Splitter is a "related party" of the Company. The issuance of the Shares and cash payments to Splitter described above is considered a related party transaction subject to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions. The Company relied on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(g) and 5.7(1)(e) of Multilateral Instrument 61-101 on the basis that the debt settlement transaction is intended to improve the Company's financial position.

The Company expects to issue up to 1,700 Units at a price of C$1,000 per Unit. Each Unit will consist of one convertible debenture (a "Convertible Debenture") with a principal amount of $1,000 and 12,500 Share purchase warrants (the "Warrants").

The Convertible Debentures will bear interest at a rate of 7.5%, payable semi-annually on the last day of June and December of each year, commencing on June 30, 2024. Interest will be paid in Shares based on the 15-day volume weighted average price ("VWAP") of the Shares on the Exchange or cash, at the Company's election, subject to Exchange approval. The Convertible Debentures will have approximately a two-year term (the "Term"), with the principal amount being due to be repaid in full by the Company on January 31, 2026 (the "Maturity Date"). At any time during the Term, the Company will have the option to extend the Term by up to one additional year on payment of an extension fee to the holders of the Convertible Debentures (the "Holders") in the amount of six month's interest payable in Shares based on the 15-day VWAP or cash, at the Company's election, subject to Exchange approval. The Convertible Debentures are unsecured.

At any time during the Term, a Holder may elect to convert the outstanding net principal amount, or any portion thereof, into Shares at a conversion price of C$0.08 per Share up to January 31, 2025 and $0.10 per Share from February 1, 2025 up to January 31, 2026 (the "Conversion Price"). In the event the Company announces a business combination and the 15-day VWAP of the Shares on the Exchange is greater than $0.08, the Company will have the right to require the Holders to convert the outstanding net principal amount into Units at the Conversion Price by giving notice to the Holders by news release or other form of notice permitted by the Convertible Debentures that the Convertible Debentures will convert on the closing of the business combination.

Each Warrant shall entitle the holder thereof to acquire one Share at an exercise price of $0.15, for a period of 24 months (the "Expiry Time"), provided that, if after the later of four months from the date of issue and conversion, the closing price of the Shares on the Exchange is equal to or greater than $0.30 for a period of 10 consecutive trading days at any time prior to the Expiry Time, the Company will have the right to accelerate the Expiry Time by giving notice to the holders of the Warrants by news release or other form of notice permitted by the certificate representing the Warrants that the Warrants will expire at 4:30 p.m. (Vancouver time) on a date that is not less than 15 days from the date notice is given.

The majority of the proceeds of the Offering will be used to fund obligations under the Termination Agreement. The Offering will close on completion of documentation and is conditional upon receipt of all necessary regulatory approvals, including the approval of the Exchange.

The Offering will be offered to accredited investors in all Provinces of Canada pursuant to applicable securities laws. In connection with the Offering, the Company may pay finders' fees as permitted by the policies of the Exchange. All securities issued pursuant to the Offering and underlying securities will be subject to a four-month hold period.

The securities to be offered in the Offering have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Further to the Company's news release of February 2, 2024, the Company does not intend to proceed with further tranches of the non-brokered private placement announced on December 21, 2023 and upsized on December 27, 2023.

An early warning report will be filed by Splitter in accordance with applicable securities laws. For further information or to obtain a copy of the early warning report, please see the Company's profile on SEDAR at www.sedar.com or contact Richard Wells, Chief Financial Officer of Waterton Global Resource Management, Inc., at 416-504-3505. The head office address of Splitter is c/o Waterton Global Resource Management, Inc., 2 Bloor Street East, Suite 1530, Toronto, ON, M4W 1A8.

Splitter has no current plan or future intentions which relate to, or would result in, acquiring additional securities of P2 or disposing of securities of P2. Depending on market conditions, Splitter's view of P2's prospects, other investment opportunities and other factors considered relevant by Splitter, Splitter may acquire additional securities of P2 from time to time in the future, in the open market or pursuant to privately negotiated transactions, or may sell all or a portion of its securities of P2.

P2 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.

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release contains "forward-looking information" within the meaning of applicable securities laws that is intended to be covered by the safe harbours created by those laws. "Forward-looking information" includes statements that use forward-looking terminology such as "may", "will", "expect", "anticipate", "believe", "continue", "potential" or the negative thereof or other variations thereof or comparable terminology. Such forward-looking information includes, without limitation, information with respect to the Company's expectations, strategies and plans for exploration properties including the Company's planned expenditures and exploration activities at the Gabbs Project, the significance of the removal of the debt overhang as it relates to the development of Gabbs, the completion of the Offering, Exchange approval of the Offering and the Termination Agreement, and the use of proceeds from the Offering.

Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made, including without limitation, that the Company will be able to use the proceeds from the Offering as anticipated, that the Company will receive Exchange approval for the Offering and Termination Agreement, that the settlement of outstanding debt will allow the Company to optimize mine development at Gabbs as well as the other assumptions disclosed in this news release. Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking information, including without limitation, the inability to use the proceeds from the Offering as expected, that the Company will not receive Exchange approval for the Termination Agreement or the Offering, that the settlement of outstanding debt will not allow for the optimization of mine development at Gabbs and risks associated with mineral exploration, including the risk that actual results and timing of exploration and development will be different from those expected by management. See "Risk Factors" in the Company's annual information form dated March 16, 2023 filed on SEDAR+ at www.sedarplus.ca for a discussion of these risks.

The Company cautions that there can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, investors should not place undue reliance on forward-looking information.

Except as required by law, the Company does not assume any obligation to release publicly any revisions to forward-looking information contained in this press release to reflect events or circumstances after the date hereof.

SOURCE P2 Gold Inc.