P2 Gold Increases Scale of Gabbs with Annual Average Production of 104,000 Ounces Gold and 13,500 Tonnes Copper Over 14.2 Years in Positive PEA
VANCOUVER, May 22, 2024 - P2 Gold Inc. ("P2" or the "Company") (TSXV: PGLD) (OTCQB: PGLDF) reports results from a positive Updated Preliminary Economic Assessment ("2024 PEA") on its wholly-owned Gabbs Gold-Copper Project located on the Walker-Lane Trend in Nevada. The 2024 PEA was prepared by Kappes, Cassiday & Associates ("KCA") of Reno, Nevada with Mineral Resource and geological/mining contributions from P&E Mining Consultants Inc. ("P&E") in accordance with National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101").
A comparison of the 2024 PEA to the September 2023 Preliminary Economic Assessment (the "2023 PEA") is set out after the 2024 PEA description.
- After-tax net present value (5% discount rate) of US$949.2 million and internal rate of return of 33.5% at US$2,414/oz gold, US$31.48/oz silver and US$4.71/lb copper ("Spot Metal Prices") (See spot to base case price comparison in Table 1)
- Total projected life-of-mine ("LOM") post-tax cash flow of US$1.7 billion at Spot Metal Prices over 14.2-year mine life
- Total projected LOM revenue of US$5.4 billion at Spot Metal Prices over 14.2-year mine life
- LOM production of 1.471 million ounces of gold, 2.058 million ounces of silver and 190 thousand tonnes of copper
- Estimated pre-production capital cost, including contingencies, of US$365.5 million with payback of 1.7 years at Spot Metal Prices
"We have increased the production profile for Gabbs to nine million tonnes per year while still maintaining a healthy mine life of over 14 years," commented Joe Ovsenek, President and CEO of P2. "Life-of-Mine production at Gabbs is now expected to be over 1.4 million ounces of gold and 190 thousand tonnes of copper. The 2024 PEA contemplates heap leach processing at nine million tonnes per year as the first phase of operations for the initial five years to reduce upfront capital requirements and project risks. In year six, operations will switch to concurrent heap leach processing at four million tonnes per year and mill processing at five million tonnes per year. Heap leach operations will pay for preproduction capital and a significant portion of mill capital prior to the commencement of mill processing in year six.
The next steps are to optimize metallurgical recoveries (as metal leaching was continuing when column tests were stopped due to time constraints), renew water well permits and file a mining plan of operations. What's more, Gabbs has considerable Mineral Resource expansion potential for both oxides and sulphides, which is why we expect Gabbs to be a long-life gold and copper mine."
The 2024 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 Updated 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 for the 2024 PEA are based on the same metal prices for the various cases, other than the Spot Case, as the 2023 PEA for comparison purposes (see news release dated September 11, 2023).
Table 1: Gabbs Project 2024 PEA Economics
| Low Case | Base Case | High Case | Spot Case(1) | |
| Gold Price (US$/oz) | $1,800 | $1,950 | $2,100 | $2,414 |
| Silver Price (US$/oz) | $22.50 | $25.00 | $27.50 | $31.48 |
| Copper Price (US$/lb) | $4.00 | $4.50 | $5.00 | $4.71 |
| Net Revenue (US$) | $4.2 billion | $4.6 billion | $5.0 billion | $5.4 billion |
| After tax NCF(2) (US$) | $769.3 million | $1.1 billion | $1.5 billion | $1.7 billion |
| After tax NPV(2) 5% (US$) | $326.8 million | $550.0 million | $768.7 million | $949.2 million |
| After tax NPV(2) 10% (US$) | $104.7 million | $257.0 million | $405.3 million | $530.0 million |
| After tax IRR(2) (%) | 14.4 % | 21.0 % | 27.4 % | 33.5 |
| Payback(3)/Mine Life (years) | 4/14.2 | 3/14.2 | 2/14.2 | 1.7/14.2 |
| (1) | As of May 17, 2024 |
| (2) | NCF means net cash flow; NPV means net present value; IRR means internal rate of return. |
| (3) | Preproduction capital, excluding mill and heap leach sustaining capital |
Table 2: Gabbs Project 2024 PEA Capital Costs
| Capital Costs | (US$ in millions) |
| Mining (including contingency of 10%) | $68.5 |
| Process, Heap Leach | $204.8 |
| Other (including contingencies) | $92.2 |
| Total Pre-Production Capital(1) | $365.5 |
| Working capital and initial fills (heap leach) | $14.2 |
| Sustaining Capital (heap leach & mill capital and contingencies) | $343.2 |
| Sustaining Capital (mining and contingencies) | $141.7 |
| Reclamation and Closure | $56.4 |
| (1) | Sum differs due to rounding |
Table 3: Gabbs Project 2024 PEA Operating Costs and AISC
| Operating Costs | (US$) |
| Mining ($/tonne mined) | $1.55 |
| Heap Leach Processing ($/tonne) | $10.70 |
| Mill Processing ($/tonne) | $13.64 |
| G&A ($/tonne) | $0.73 |
| AISC (co-product)(2), LOM @ Base Case Metal Prices ($/ounce of gold) | $1,233.81 |
| (1) | Including rehandle material |
| (2) | Net of silver credits |
Table 4: Gabbs Project 2024 PEA Projected Processing and Metal Production Summary
|
| Tonnes | Gold | Silver | Copper |
|
|
| Gold |
| 1 | 9,000/ | 0.78/ | 1.68/ | 0.23/ | 150 | 186 | 9,464 | 201 |
| 2 | 9,000/ | 0.54/ | 1.28/ | 0.26/ | 130 | 174 | 12,233 | 194 |
| 3 | 9,000/ | 0.35/ | 0.96/ | 0.24/ | 86 | 131 | 11,858 | 148 |
| 4 | 9,000/ | 0.26/ | 1.17/ | 0.22/ | 63 | 148 | 11,028 | 121 |
| 5 | 9,000/ | 0.31/ | 1.16/ | 0.21/ | 69 | 151 | 10,352 | 124 |
| 6 | 4,000/ | 0.52/ | 1.40/ | 0.22/ | 133 | 194 | 17,195 | 223 |
| 7 | 4,000/ | 0.35/ | 0.72/ | 0.19/ | 100 | 135 | 14,437 | 175 |
| 8 | 4,000/ | 0.43/ | 0.89/ | 0.23/ | 107 | 146 | 15,314 | 187 |
| 9 | 4,000/ | 0.47/ | 0.72/ | 0.26/ | 118 | 140 | 16,081 | 202 |
| 10 | 4,000/ | 0.36/ | 0.60/ | 0.25/ | 93 | 109 | 15,832 | 175 |
| 11 | 4,000/ | 0.25/ | 0.55/ | 0.23/ | 83 | 119 | 18,055 | 176 |
| 12 | 4,000/ | 0.51/ | 1.21/ | 0.16/ | 102 | 153 | 14,047 | 175 |
| 13 | 4,000/ | 0.67/ | 1.39/ | 0.21/ | 139 | 155 | 11,698 | 201 |
| 14 | 2,317/ | 0.20/ | 0.64/ | 0.14/ | 84 | 99 | 10,446 | 138 |
| 15 | -/ | -/ | -/ | -/ | 16 | 18 | 1,917 | 26 |
| Total | 1,472(4) | 2,058(4) | 189,959(4) | 2,466(4) |
| (1) | Ox/S means oxide mineralization/sulphide mineralization |
| (2) | Nominal tonnes |
| (3) | At Spot Metal Prices. |
| (4) | Sums may differ due to rounding |
Table 5: Gabbs Project 2024 PEA Other Mine Production Parameters
| Mining | (M t) |
| Total waste tonnes mined | 399.3 |
| Total processed tonnes mined | 125.3 |
| Total tonnes mined | 524.7 |
| Recoveries | ( %) |
| Heap - Gold Recovery, Oxide | 78.3 |
| Heap - Silver Recovery, Oxide | 45.0 |
| Heap - Copper Recovery, Oxide | 54.0 |
| Mill - Gold Recovery, Sulphide | 94.5 |
| Mill - Silver Recovery, Sulphide | 50.0 |
| Mill - Copper Recovery, Sulphide | 79.9 |
Mining
The open pit waste and mineralized material will be mined by standard open-pit mining methods using a combination leased and owned mining fleet of 136-tonne haul trucks and 15.3 m3 hydraulic shovels, fine crushed using a system incorporating a gyratory crusher, cone crushers and high-pressure grinding rolls (HPGR).
Processing
Heap Leach
The Gabbs mineralized material is estimated to contain an average of 0.24% copper based on the mine plan used for the 2024 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 (sulphidization, 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.
After the crushing circuit, the mineralized material will be agglomerated with cement and conveyor stacked on the heap leach pad in 8-meter lifts then 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 sulphuric acid, then copper will be precipitated as sulphides by the addition of sodium hydrosulphide. 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 doré bar. For the first five years, the heap leach circuit will operate at a rate of nine million tonnes per annum, in years six through 14 the heap leach circuit will operate at a rate of four million tonnes per annum.
Mill
The ROM feed material to the mill will use the same crushing circuit as the heap leach facilities. The mill feed will be crushed to P80 6.3 mm, (1/4") in a three-stage crushing circuit, with the third-stage an HPGR. The milled sulphide product will be treated in a flotation plant to produce a copper concentrate suitable for sale. The flotation tailings and ground oxide material will be thickened, then direct cyanide leached to dissolve gold, silver and copper. The leached solids will be washed in a CCD circuit to remove the dissolved metals and cyanide. The dissolved copper and silver will be recovered from the CCD overflow solution in a SART plant as a copper/silver sulphide precipitate. Regenerated sodium cyanide from the SART plant will be recycled to the leach circuit. Gold in the SART plant barren solution will be recovered in an ADR plant and refined to produce doré bars. The CCD tails are treated in a cyanide destruction circuit, filtered, and conveyed to a "dry stack" storage facility.
- Metallurgy - complete additional test work to increase recoveries for oxide and sulphide gold and copper mineralization and evaluate the use of HPGR for potential heap leaching of sulphide mineralization to increase recovery of free gold
- Mine Plan - optimize mine sequencing to increase return on capital and carryout geotechnical drilling to optimize pit wall slope angles
- Waste Stripping - evaluate extent of alluvium in waste to reduce stripping cost
- Contract Mining - evaluate contract mining versus owner fleet
- Mineral Resource - expand oxide and sulphide gold and gold and copper mineralization (zones remain open)
- Capex - evaluate equipment alternatives to reduce capital costs
Additional metallurgical test work will be undertaken next to refine metallurgical recoveries for both the oxide and sulphide mineralization along with an evaluation of the depth of the alluvium and geotechnical drilling. Thereafter, feasibility-level studies will commence and will include an evaluation of contract mining versus an owner fleet (leased or owned), mine plan optimization and equipment alternatives. Timing of the metallurgical test work, drilling and feasibility-level studies will be dependent on the availability of funds.
The 2023 PEA contemplated processing at a rate of six million tonnes per year over a 13.4 mine life based on heap leach processing for the first five years and mill processing for the remainder of the mine life, with oxide and sulphide mineralization campaigned through the mill. Under the 2023 PEA, oxide mineralization below the mill cutoff grade is not processed.
As noted above, the 2024 PEA contemplates processing at a rate of nine million tonnes per year over a 14.2-year mine life based on heap leach processing for the first five years followed by concurrent heap leach processing at four million tonnes per year and mill processing at five million tonnes per year for the remainder of the mine life. Under the 2024 PEA, oxide mineralization will be heap leached and sulphide mineralization will be milled.
Capex for the 2024 PEA is higher than for the 2023 PEA as, not only has production increased to 9 million tonnes per annum from six million tonnes per annum, the 2024 PEA maintains both heap leach processing and mill processing from year six through the remainder of the mine life, while the 2023 PEA only provides for milling from year six onwards. The 2024 PEA allows oxide mineralization, after year five, that does not satisfy the mill cut off to be heap leached increasing the total tonnes processed from approximately 79 million tonnes in the 2023 PEA to over 125 million tonnes in the 2024 PEA.
Economic sensitivities for the 2024 PEA are compared to those for the 2023 PEA at Base Case and Spot Metal prices, with the 2023 PEA updated for current costs, in Table 6 below.
Table 6: Gabbs Project Comparison of 2024 PEA to 2023 PEA Economics
| 2023 PEA | 2024 PEA | 2023 PEA | 2024 PEA | |
| Gold Price (US$/oz) | $1,950 | $1,950 | $2,414 | $2,414 |
| Silver Price (US$/oz) | $25.00 | $25.00 | $31.48 | $31.48 |
| Copper Price (US$/lb) | $4.50 | $4.50 | $4.71 | $4.71 |
| Net Revenue (US$) | $3.7 billion | $4.6 billion | $4.3 billion | $5.4 billion |
| After tax NCF(2) (US$) | $939.6 million | $1.1 billion | $1.5 billion | $1.7 billion |
| After tax NPV(2) 5% (US$) | $485.0 million | $550.0 million | $818.6 million | $949.2 million |
| After tax NPV(2) 10% (US$) | $244.3 million | $257.0 million | $472.8 million | $530.0 million |
| After tax IRR(2) (%) | 23.8 % | 21.0 % | 36.8 % | 33.5 % |
| Payback(3)/Mine Life (years) | 2.5/13.4 | 3/14.2 | 1.7/13.4 | 1.7/14.2 |
| (1) | As of May 17, 2024 |
| (2) | NCF means net cash flow; NPV means net present value; IRR means internal rate of return. |
| (3) | Preproduction capital, excluding mill and heap leach sustaining capital |
The 2024 PEA was prepared by Carl E. Defilippi, RM SME 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 Updated PEA in this news release.
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.
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.
Neither the TSX Venture Exchange (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 the Gabbs Project including the Company's planned expenditures and exploration activities.
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. 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. See "Risk Factors" in the Company's annual information form for the year ended December 31, 2023, dated March 21, 2024 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.
Contact
Joseph Ovsenek, President & CEO, (778) 731-1055; Michelle Romero, Executive Vice President, (778) 731-1060; P2 Gold Inc., Suite 1100, 355 Burrard Street, Vancouver, BC, V6C 2G8, info@p2gold.com, (SEDAR filings: P2 Gold Inc.)
