P2 Gold Announces Acquisition of Gabbs Project, Nevada, Mineral Resource Estimate for Gabbs and Financing
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES
February 23, 2021 News Release 21-02
P2 Gold Announces Acquisition of Gabbs Project, Nevada,
Mineral Resource Estimate for Gabbs and Financing
Vancouver, British Columbia, February 23, 2021; P2 Gold Inc. (“P2” or the “Company”) (TSX-V:PGLD)
reports that it has entered into an agreement with Borealis Mining Company, LLC (“Waterton”), an
indirect, wholly-owned subsidiary of Waterton Precious Metals Fund II Cayman, LP to acquire all of the
assets that comprise the Gabbs Project located on the Walker-Lane Trend in the Fairplay Mining District
of Nye County , Nevada (the “Transaction”) . The closing of the Transaction remains subject to the
satisfaction of customary closing conditions for a transaction of such nature, including acceptance by
the TSX Venture Exchange (the “Exchange”) and the completion of the P rivate Placement (defined
below). The Transaction will be an arm’s length transaction under Exchange policies.
Gabbs Project Description and Inferred Mineral Resource Estimate
The Gabbs Project is comprised of 355 unpatented lode mining claims and one pa tented lode mining
claim covering four known zones of mineralization and comprising approximately 2,800 hectares.
Nevada Highway 361, Gabbs Pole Line Road and a powerline cross the Gabbs Project. The gold-copper
mineralization at three of the zones, Sullivan, Lucky Strike and Gold Ledge, is hosted within what are
interpreted to be sills associated with an alkaline gold/copper porphyry . The gold mineralization at
the fourth zone, Car Body, is interpreted to be low-sulphidation epithermal mineralization.
The Company retained P&E Mining Consultants Inc. (“P&E”) to prepare a Mineral Resource Estimate
for the Gabbs Project based on 494 drill holes completed by prior project operators between 1970 and
2011. A National Instrument 43-101 Technical Report to be prepared by P&E with an effective date of
February 3, 2021, will be posted on www.p2gold.com and the Company's profile on www.SEDAR.com
within 45 days of the date of this news release.
The Gabbs Project has an Inferred Mineral Resour ce of 1.84 million ounces of gold equivalent or 1.26
million ounces of gold and 422.3 million pounds of copper ( 73.1 million tonnes grading 0.54 g/t gold
and 0.26% copper). See Tables 1 and 2 below.
Table 1: Gabbs Project Inferred Mineral Resource Estimate(1)(2)(3)(4)
Tonnes
(M)
Gold Grade
(g/t)
Copper
Grade
(%)
Gold
(M oz)
Copper
(M lbs)
Gold Eq.
Grade
(g/t)
Gold Eq.
(M oz)
73.1 0.54 0.26 1.26 422.3 0.79 1.84
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(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 R esource in this estimate has a lower level of confidence tha n 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 Inferred Mineral Resource Estimate was prepared for a potential open pit scenario using
a constraining pit shell (with 50 degree slop es) at respective 0.24 g/t and 0.30 g/t oxide and
sulphide gold equivalent cut-off grades. The gold equivalent cut-off grades were derived from
US$1,600/oz gold, US$3/lb copper, US $2/tonne mining cost, US$8 and $12 /tonne oxide and
sulphide processing cost s, US$2/tonne G&A cost and 80% Au oxide and sulphide process
recoveries and 90% Cu sulphide process recoveries. A zero process recovery for oxide Cu was
used.
Table 2: Gabbs Project Inferred 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 37.6 0.58 0.28 0.70 233.8 0.75 0.90
Lucky Strike 32.6 0.41 0.26 0.43 188.3 0.77 0.81
Car Body 2.8 1.39 0.00 0.13 0 1.39 0.13
Gold Ledge(3) 0.1 0.76 0.15 0 0 0.76 0
Total 73.1 0.53 0.26 1.26 422.3 0.79 1.84
(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.
The Gabbs Project oxide Inferred Mineral Resource Estimate is 610,000 ounces of gold (26.2 million
tonnes grading 0.72 g/t gold and assuming zero recovery for copper). See Table 3 below for a
breakdown of the oxide and sulphide Inferred Mineral Resources.
Table 3: Gabbs Project Inferred 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(3) 26.2 0.72 0.25 0.61 143.3 0.72 0.61
Sulphide 46.9 0.43 0.27 0.65 279.2 0.82 1.24
Total 73.1 0.54 0.26 1.26 422.3 0.79 1.84
(1) See Notes 1 to 4 to Table 1 above.
(2) Tables may differ and not sum due to rounding.
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(3) Copper recovery in oxides assumed to be zero.
Gabbs Project Exploration Target and Potential
Based on historical drilling, the Gabbs Project has an Exploration Target of 0.90 million to 2.25 million
ounces of gold (contained in 40 million to 70 million tonnes at an average grade of 0.7 to 1.0 g/t gold).
No Exploration Target has been estimated for copper. The potential quantity and grade of this
Exploration Target is conceptual in nature . There has been insufficient exploration to define it as a
Mineral Resource and it is uncertain if further exploration will result in the target being delineated as
a Mineral Resource.
Due to the limited systematic exploration completed to date, the Company believes the full potential
of each of the known zones of mineralization at Gabbs has yet to be recognized. The mineralized zones
have not been tested along strike or at depth, and of the 494 holes drilled at Gabbs between 1970 and
2011, 180 holes (36%) ended in mineralization. Also, a significant number of holes drilled prior to 2004
were, depending on the focus of the operator, assayed only for gold or only for copper, not both
metals.
Following the closing of the acquisition, the Company plans to undertake a systematic exploration
program for a large porphyry-related copper-gold system. Initial drilling will focus on the known zones
of mineralization to expand and improve the confidence in these Mineral Resources.
Transaction Terms
Under the terms of an asset purchase agreement, P2 Gold has agreed (a) to pay US$5 million and issue
15 million shares in its capital to Waterton at closing, and (b) to pay an additional US$5 million to
Waterton on the earlier of the announcement of the results of a Preliminary Economic Assessment
and the 24 month anniversary of closing. Waterton will also reserve for itself a 2% net smelter returns
royalty on production from the Gabbs Project, of which one percent may be repurchased at any time
by P2 Gold for US$1.5 million and the remaining one percent of which may be repurchased for US$5
million. Following completion of the Transaction and the Priva te Placement (as defined below)
Waterton will be an Insider of the Company.
For further details on the Gabbs Project acquisition please see www.p2gold.com/gabbs.
Private Placement
P2 Gold intends to complete a private placement of 32 million subscription receipts (the “Subscription
Receipts”) at a price of $0.50 per Subscription Receipt for aggregate gross proceeds of $16 million (the
“Private Placement”). If the Private Placement is brokered, the Company intends to pay the brokers
a commission and grant the brokers an option to sell an additional 4.8 million Subscription Receipts at
$0.50 per Subscription Receipt. The Private Placement remains subject to approval of the Exchange.
The net proceeds of the Private Placement will be used by P2 Gold to fund the acquisition of the Gabbs
Project and, following the closing of the Transaction, exploration of the Gabbs Project and for general
corporate purposes. At the time the Transaction closes, each Subscription Receipt will be exchanged
for one common share of the Company . If the Transaction has not closed by May 21 , 2021 the
Subscription Receipts will automatically be cancelled and all subscription proceeds will be returned to
the subscribers.
The Subscription Receipts to be issued under the Private Placement and the common shares of the
Company exchanged for the Subscription Receipts upon the closing of the Transaction will be subject
to a hold period in Canada expiring four months and one day from the closing date of the Private
Placement.
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The securities to be offered in the Private Placement 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 b uy 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 details in respect of the Private Placement will be announced in a separate press release.
Qualified Persons
The Mineral Resource Estimate was prepared by Eugene Puritch, P.Eng. and F.H. Brown, P.Geo. of P&E
Mining Consultants Inc. of Brampton, Ontario, Independent Qualified Persons (“QP”), as defined by
National Instrument 43-101. Mr. Puritch has reviewed and approved the contents of this news release.
Ken McNaughton, M.A.Sc., P.Eng., Chief Explorati on Officer, P2 Gold, is the QP responsible for the
Gabbs Project exploration program.
About P2 Gold Inc.
P2 is a mineral exploration and development company focused on advancing precious metals
discoveries and acquisitions in the western United States and British Columbia.
For further information, please contact:
Joseph Ovsenek
President, CEO and Chairman
P2 Gold Inc.
Suite 1100, 355 Burrard Street
Vancouver, BC
V6C 2G8
(SEDAR filings: P2 Gold Inc.)
Michelle Romero
Executive Vice President
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 and the proposed Private
Placement.
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 unkn own risks, uncertainties and other
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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 dated October 21, 20 20 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.