VANCOUVER, BC, June 29,
2023 /CNW/ - P2 Gold Inc. ("P2" or the
"Company") (TSXV: PGLD) (OTCQB: PGLDF) reports 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, Nevada 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 ("NI 43-101").
An NI 43-101 Technical Report will be prepared and posted
on www.p2gold.com and the Company's profile on www.SEDAR.com
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$230.2 million
"The PEA provides a solid plan for advancing Phase One
development at Gabbs, where we are
taking a phased approach to production," commented Joe Ovsenek, President and CEO of P2. "With an
initial focus primarily on the oxide resources, we can shorten and
simplify the path to production with an open pit, heap leach
operation. Our next goal is to optimize the mine plan
and capex, evaluate contract mining and complete additional
metallurgy, which we believe will significantly increase the rate
of return at lower metal prices. In addition, Gabbs has considerable oxide Mineral Resource
expansion potential to extend Phase One operations beyond that
contemplated in the PEA. Phase Two will focus on the development of
the sulphide mineralization which sits below the oxide
mineralization. Overall, we expect Gabbs to be a long-life
gold and copper mine as the oxide mineralization is expanded and
the sulphide mineralization is brought online."
The PEA is preliminary in nature, includes Inferred Mineral
Resources that are considered too speculative geologically to have
the economic considerations applied to them that would enable them
to be categorized as Mineral Reserves, and there is no certainty
that the PEA will be realized. Mineral Resources that are not
Mineral Reserves do not have demonstrated economic viability. The
Company has not defined any Mineral Reserves on the Gabbs
Project.
Economic
Sensitivities
Base Case metals prices were established by the Company
reflecting the Company's expectations for market conditions at the
time of construction financing for the Gabbs Project.
Table 1: Gabbs Project 2023 PEA Economics
|
Low
Case
|
Base
Case
|
High
Case
|
Spot
Case(2)
|
Gold Price
(US$/oz)
|
$1,800
|
$1,950
|
$2,100
|
$1919
|
Copper Price
(US$/lb)
|
$4.00
|
$4.50
|
$5.00
|
$3.81
|
Net Revenue
(US$)
|
$1.44
billion
|
$1.58
billion
|
$1.73
billion
|
$1.49
billion
|
After tax
NCF(1) (US$)
|
$213.5
million
|
$319.5
million
|
$424.7
million
|
$247.2
million
|
After tax
NPV(1) 5% (US$)
|
$90.9
million
|
$163.1
million
|
$234.9
million
|
$114.4
million
|
After tax
IRR(1) (%)
|
11.9 %
|
16.7 %
|
21.1 %
|
13.6 %
|
Payback/Mine Life
(years)
|
6.0/11.1
|
4.2/11.1
|
3.5/11.1
|
5.5/11.1
|
(1)
|
NCF means net cash
flow; NPV means net present value; IRR means internal rate of
return.
|
(2)
|
As of June 27,
2023
|
Capital and Operating Costs
Table 2: Gabbs Project 2023 PEA Capital Costs
Capital
Costs
|
(US$ in
millions)
|
Mining (including
contingency of 10%)
|
$61.9
|
Process (including
contingency of 20%)
|
$143.7
|
Other (including
contingencies)
|
$24.7
|
Total Pre-Production
Capital
|
$230.2
|
Working capital and
initial fills
|
$6.8
|
Sustaining Capital
(including contingency)
|
$27.7
|
Reclamation and
Closure
|
$19.6
|
Table 3: Gabbs Project 2023 PEA Operating Costs
Operating
Costs
|
(US$)
|
Mining ($/tonne mined)
(LOM strip ratio 2.36:1)
|
$2.31
|
Processing
($/tonne)
|
$11.22
|
G&A
($/tonne)
|
$1.23
|
AISC, LOM @ Base Case
(US$/oz AuEq)
|
$784
|
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 m3 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 doré 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.
Table 4: June 2023 Gabbs Project Pit Constrained Mineral
Resource Estimate(1)(2)(3)(4)
Mineral
Resource
Classification
|
Tonnes
(M)
|
Gold
Grade
(g/t)
|
Copper
Grade
(%)
|
Gold
(M oz)
|
Copper
(M lbs)
|
Gold Eq.
Grade
(g/t)
|
Gold Eq.
(M oz)
|
Indicated
|
42.3
|
0.50
|
0.28
|
0.676
|
261.3
|
0.78
|
1.058
|
Inferred
|
55.2
|
0.50
|
0.25
|
0.895
|
304.0
|
0.77
|
1.358
|
(1)
|
Mineral Resources which
are not Mineral Reserves do not have demonstrated economic
viability. The estimate of Mineral Resources may be materially
affected by environmental, permitting, legal, title, taxation,
sociopolitical, marketing, or other relevant issues.
|
(2)
|
The Inferred Mineral
Resource in this estimate has a lower level of confidence than that
applied to an Indicated Mineral Resource and must not be converted
to a Mineral Reserve. It is reasonably expected that the majority
of the Inferred Mineral Resource could be upgraded to an Indicated
Mineral Resource with continued exploration.
|
(3)
|
The Mineral Resources
in this press release were estimated using the Canadian Institute
of Mining, Metallurgy and Petroleum (CIM), Standards on Mineral
Resources and Reserves, Definitions (2014) and Best Practices
(2019) prepared by the CIM Standing Committee on Reserve
Definitions and adopted by CIM Council.
|
(4)
|
The Mineral Resource
Estimate was prepared for a potential open pit scenario using a
constraining pit shell (with 50 degree slopes) at respective 0.28
g/t and 0.44 g/t oxide and sulphide gold equivalent cut-off grades.
The gold equivalent cut-off grades were derived from US$1,838/oz
gold, US$3.96/lb copper, US$2.15/tonne mining cost, and US$11.76
and $23.66/tonne respective oxide and sulphide processing costs;
US$1.25/tonne G&A cost, 78.3% and 95.2% respective Au oxide and
sulphide process recoveries; and 48% and 78% respective Cu oxide
and sulphide process recoveries.
|
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.
Table 5: June 2023 Gabbs Project Pit Constrained Mineral
Resource Estimate by Rock Group(1)(2)
Rock
Group
|
Tonnes
(M)
|
Gold
Grade
(g/t)
|
Copper
Grade
(%)
|
Gold
(M oz)
|
Copper
(M lbs)
|
Gold Eq.
Grade
(g/t)
|
Gold Eq.
(M oz)
|
Oxide
Indicated
|
30.6
|
0.49
|
0.27
|
0.483
|
182.1
|
0.74
|
0.724
|
Oxide
Inferred
|
33.0
|
0.53
|
0.23
|
0.556
|
167.8
|
0.74
|
0.779
|
Sulphide
Indicated
|
11.7
|
0.52
|
0.31
|
0.193
|
79.2
|
0.89
|
0.333
|
Sulphide
Inferred
|
22.2
|
0.47
|
0.28
|
0.339
|
136.2
|
0.81
|
0.579
|
(1)
|
See Notes 1 to 4 to
Table 1 above.
|
(2)
|
Tables may differ and
not sum due to rounding.
|
Table 6: June 2023 Gabbs Project Pit Constrained Mineral
Resource Estimate by Zone(1)(2)
Zone
|
Tonnes
(M)
|
Gold
Grade
(g/t)
|
Copper
Grade
(%)
|
Gold
(M oz)
|
Copper
(M lbs)
|
Gold Eq.
Grade
(g/t)
|
Gold Eq.
(M oz)
|
Sullivan
Indicated
|
42.3
|
0.50
|
0.28
|
0.676
|
261.3
|
0.78
|
1.058
|
Sullivan
Inferred
|
9.6
|
0.52
|
0.27
|
0.161
|
57.6
|
0.83
|
0.256
|
Lucky Strike
Inferred
|
41.0
|
0.47
|
0.26
|
0.619
|
238.0
|
0.74
|
0.976
|
Car
Body
Inferred
|
3.3
|
0.99
|
-
|
0.106
|
-
|
0.99
|
0.106
|
Gold
Ledge(3)
Inferred
|
1.3
|
0.21
|
0.28
|
-
|
-
|
0.47
|
-
|
(1)
|
See Notes 1 to 4 to
Table 1 above.
|
(2)
|
Tables may differ and
not sum due to rounding.
|
(3)
|
Gold Ledge Inferred
Mineral Resource rounded to zero**.
|
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.
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.
Forward Looking
Information
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,
2022, dated March 16, 2023
filed on SEDAR at www.sedar.com 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.