P2 Gold Announces Positive Gabbs Preliminary Economic Assessment
P2 Gold Announces Positive Gabbs
Preliminary Economic Assessment
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 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 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.
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%SEDAR: 00045664E
For further information:
Joseph Ovsenek, President & CEO, (778) 731-1055, P2 Gold Inc., Suite
1100, 355 Burrard Street, Vancouver, BC, V6C 2G8, [email protected], (SEDAR filings: P2 Gold
Inc.); Michelle Romero, Executive Vice President, (778) 731-1060
CO: P2 Gold Inc.
CNW 09:43e 29-JUN-23