P2 Gold Announces Positive Gabbs Updated Preliminary Economic Assessment with Life of Mine Production of 1.86 Million Gold Equivalent Ounces
P2 Gold Announces Positive Gabbs Updated
Preliminary Economic Assessment with Life of
Mine Production of 1.86 Million Gold
Equivalent Ounces
VANCOUVER, BC
,
Sept. 11, 2023
/CNW/ -
P2 Gold Inc.
("P2" or the "Company") (TSXV: PGLD)
(OTCQB: PGLDF) reports results from a positive Updated Preliminary Economic Assessment
("Updated PEA") on its wholly-owned gold-copper Gabbs Project located on the Walker-Lane Trend
in
Nevada
. The Updated PEA was prepared by Kappes, Cassiday & Associates ("KCA") of
Reno,
Nevada
with Mineral Resource and 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"). 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
After-tax net present value (5% discount rate) of
US$292.2 million
and internal rate of return of
17.0% at
US$1918
/oz gold,
US$23.01
/oz silver and
US$3.73
/lb copper ("Spot Metal Prices")
(See spot to base case price comparison in Table 1)
Total projected life-of-mine ("LOM") revenue of
US$3.43 billion
at Spot Metal Prices over 13.4-
year mine life
LOM gold equivalent production of 1.86 million ounces (79.1 million tonnes @ 0.54 g/t gold,
1.28 g/t silver and 0.27% copper) at Spot Metal Prices, with LOM production of 1.206 million
ounces of gold, 1.742 million ounces of silver and 327 million pounds of copper
Average annual gold equivalent production of 139,000 ounces at Spot Metal Prices
Estimated pre-production capital cost, including contingencies, of
US$277.7 million
with payback
of 3.0 years at Spot Metal Prices
"We have updated the
Gabbs
June 2023
PEA to include the development of the sulphide
mineralization in addition to oxide mineralization and an increase in the mining rate to six million
tonnes per year to provide for the development of a mid-sized mine," commented
Joe Ovsenek
,
President and CEO of P2. "Life-of-Mine production at Gabbs is now expected to be close to two
million ounces of gold equivalent with average annual production expected to be close to 150,000
ounces of gold equivalent. The updated PEA contemplates heap leach processing as the first
phase of operations for the initial five years to reduce upfront capital requirements and project
risks. 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 Gabbs Feasibility Study,
expected to be initiated soon, will focus on optimizing the mine plan and capex, evaluating contract
mining and completing additional metallurgy, which we believe will significantly increase the rate
of return. 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 Updated 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
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 and to allow for a
direct comparison with the
Gabbs
June 2023
Preliminary Economic Assessment (see news release
dated
June 29, 2023
).
Table 1: Gabbs Project
September 2023
Updated PEA Economics
Low Case
Base Case
High Case
Spot Case
(1)
Gold Price (US$/oz)
$1,800
$1,950
$2,100
$1,918
Silver Price (US$/oz)
$22.50
$25.00
$27.50
$23.01
Copper Price (US$/lb)
$4.00
$4.50
$5.00
$3.73
Net Revenue (US$)
$3.37 billion
$3.71 billion
$4.05 billion
$3.43 billion
After tax NCF
(2)
(US$)
$584.9 million
$868.0 million
$1.15 billion
$632.5 million
After tax NPV
(2)
5% (US$)
$259.4 million
$442.1 million
$622.2 million
$292.2 million
After tax IRR
(2)
(%)
15.5
22.6
29.5
17.0
Payback
(3)
/Mine Life (years)
3.0
2.7
2.1
3.0
(1)
As of September 7, 2023
(2)
NCF means net cash flow; NPV means net present value; IRR means internal rate of return.
(3)
Preproduction capital
Capital and Operating Costs
Table 2: Gabbs Project
September 2023
Updated PEA Capital Costs
Capital Costs
(US$ in millions)
Mining (including contingency of 10%)
$54.9
Process, Heap Leach (including contingency of 25% on direct costs)
$184.0
Other (including contingencies)
$38.7
Total Pre-Production Capital
(1)
$277.7
Working capital and initial fills (heap leach)
$9.6
Sustaining Capital (mill capital and contingencies)
$288.1
Sustaining Capital (mining, other and contingencies)
$84.1
Reclamation and Closure
$35.6
(1)
Sum differs due to rounding
Table 3: Gabbs Project
September 2023
Updated PEA Operating Costs and AISC
Operating Costs
(US$)
Mining ($/tonne mined)
$1.62
Heap Leach Processing ($/tonne)
$13.14
Mill Processing ($/tonne)
$18.97
G&A ($/tonne)
$0.96
AISC (by-product), LOM @ Spot Metal Prices ($/ounce of gold)
$1,126
Projected Mining and Production
Table 4: Gabbs Project
September 2023
Updated PEA Projected Mining and Production
Summary
Year
Tonnes
Process
Ox/S
(1)
(k t)
Gold
Grade
Ox/S
(1)
(g/t)
Silver
Grade
Ox/S
(1)
(g/t)
Copper
Grade
Ox/S
(1)
(%)
Gold
Production
(k oz)
Silver
Production
(k oz)
Copper
Production
(k lbs)
Gold
Equivalent
Production
(2)
(k oz)
1
6,000/
-
0.82/
-
1.44/
-
0.22/
-
105
107
13,226
132
2
6,000/
-
0.68/
-
1.72/
-
0.30/
-
106
146
20,600
148
3
6,000/
-
0.43/
-
1.51/
-
0.28/
-
71
134
20,357
112
4
6,000/
-
0.56/
-
1.43/
-
0.29/
-
81
126
20,422
122
5
6,000/
-
0.48/
-
1.20/
-
0.23/
-
74
107
17,260
109
6
1,219/
3,281
0.60/
0.60
0.32/
1.27
0.24/
0.29
93
93
23,952
141
7
2,000/
4,000
0.53/
0.53
0.72/
1.24
0.24/
0.30
94
118
28,714
151
8
2,000/
4,000
0.57/
0.45
0.80/
1.21
0.27/
0.29
89
121
29,087
147
9
2,000/
4,000
0.53/
0.46
1.29/
1.25
0.30/
0.28
88
149
29,699
148
10
2,000/
4,000
0.51/
0.52
1.01/
1.18
0.37/
0.30
94
130
32,945
160
11
1,559/
4,441
0.45/
0.36
0.91/
1.11
0.33/
0.35
70
117
35,360
141
12
2,000/
4,000
1.11/
-0.46
3.22
/1.33
0.26/
0.24
123
257
25,078
175
13
1,754/
4,246
0.54/
0.41
0.99/
0.83
0.23/
0.18
83
103
20,028
123
14
-/
2,562
-/
0.43
-/
0.84
-/
0.24
33
34
10,754
55
Total
1,206
(3)
1,742
(3)
327,483
(3)
1,863
(3)
(1)
Ox/S means oxide mineralization/sulphide mineralization
(2)
At Spot Metal Prices.
(3)
Sums may differ due to rounding
Table 5: Gabbs Project
September 2023
Updated PEA Other Mine Production Parameters
Mining
(M t)
Total waste tonnes mined
306.8
Total processed tonnes mined
79.1
Total low-grade stockpile mined
9.3
Total tonnes mined
395.2
Recoveries
( %)
Heap - Gold Recovery, Oxide
78.3
Heap - Silver Recovery, Oxide
45.0
Heap - Copper Recovery, Oxide
54.0
Mill - Gold Recovery, Oxide
95.2
Mill - Silver Recovery, Oxide
83.0
Mill - Copper Recovery, Oxide
74.0
Mill - Gold Recovery, Sulphide
94.5
Mill - Silver Recovery, Sulphide
50.0
Mill - Copper Recovery, Sulphide
79.9
Mining and Processing
Mining
The mineralized material will be mined by standard open-pit mining methods using an owner mining
fleet of 136-tonne haul trucks and
15.3 m
3
hydraulic shovels, fine crushed using a system
incorporating a jaw crusher, cone crushers and high-pressure grinding rollers (HPGR).
Processing
Heap Leach
The
Gabbs
mineralized material is estimated to contain an average of 0.27% copper based on the
mine plan used for this Updated 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.
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 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.
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 ore will be conveyed to a single-stage ball mill circuit. Sulfide and oxide mineralized
material will be campaigned through the mill as the oxide material will not be treated in the flotation
circuit. 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.
Opportunities
Low-Grade Stockpile – evaluate alternatives for processing low-grade stockpile
Leased Mining Fleet– evaluate leasing versus purchasing the mining fleet
Contract Mining - evaluate contract mining versus owner fleet
Mine Plan
– optimize mine sequencing to increase return on capital and carryout geotechnical
drilling to optimize pit slope angles
Stripping - evaluate extent of alluvium in waste to reduce stripping cost
Mineral Resource – expand oxide and sulphide gold and gold and copper mineralization (zones
remain open)
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
Capex – evaluate equipment alternatives to reduce capital costs
Next Steps
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.
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
2023 MRE is restated in this news release to include silver.
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 cutoff grade to 0.28 g/t
gold equivalent from 0.35 g/t gold equivalent and an increase in the sulphide cutoff 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 6: June 2023 Gabbs Project Pit Constrained Mineral Resource Estimate
(1)(2)(3)(4)
Mineral
Resource
Classification
Tonnes
(M)
Gold
Grade
(g/t)
Silver
Grade
(g/t)
(5)
Copper
Grade
(%)
Gold
(M oz)
Silver
(5)
(M oz)
Copper
(M lbs)
Gold Eq.
Grade
(g/t)
Gold Eq.
(M oz)
Indicated
42.3
0.50
2.8
0.28
0.676
1.964
261.3
0.78
1.058
Inferred
55.2
0.50
2.1
0.25
0.895
1.885
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.
(5)
Silver not included in gold equivalent calculation.
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, 1.49 g/t silver 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, 1.03 g/t silver and 0.23% copper). See Table 7 below for a breakdown of the oxide
and sulphide Mineral Resources.
Table 7:
June 2023
Gabbs Project Pit Constrained Mineral Resource Estimate by Rock
Group
(1)(2)
Rock
Group
Tonnes
(M)
Gold
Grade
(g/t)
Silver
Grade
(g/t)
Copper
Grade
(%)
Gold
(M oz)
Silver
(M oz)
Copper
(M lbs)
Gold Eq.
Grade
(g/t)
Gold
Eq.
(M oz)
Oxide
Indicated
30.6
0.49
1.49
0.27
0.483
1.468
182.1
0.74
0.724
Oxide
Inferred
33.0
0.53
1.03
0.23
0.556
1.086
167.8
0.74
0.779
Sulphide
Indicated
11.7
0.52
1.32
0.31
0.193
0.496
79.2
0.89
0.333
Sulphide
Inferred
22.2
0.47
1.12
0.28
0.339
0.799
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 8: June 2023 Gabbs Project Pit Constrained Mineral Resource Estimate by Zone
(1)(2)
Zone
Tonnes
(M)
Gold
Grade
(g/t)
Silver
Grade
(g/t)
Copper
Grade
(%)
Gold
(M oz)
Silver
(M oz)
Copper
(M lbs)
Gold Eq.
Grade
(g/t)
Gold
Eq.
(M oz)
Sullivan
Indicated
42.3
0.50
1.45
0.28
0.676
1.964
261.3
0.78
1.058
Sullivan
Inferred
9.6
0.52
1.21
0.27
0.161
0.372
57.6
0.83
0.256
Lucky
Strike
Inferred
41.0
0.47
1.12
0.26
0.619
1.479
238.0
0.74
0.976
Car Body
Inferred
3.3
0.99
0.38
-
0.106
0.34
-
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**.
Qualified persons
The Updated 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.
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.
View original content to download multimedia:
http://www.newswire.ca/en/releases/archive/September2023/11/c7795.html
%SEDAR: 00045664E
For further information:
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, [email protected], (SEDAR filings: P2 Gold Inc.)
CO: P2 Gold Inc.
CNW 09:21e 11-SEP-23