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
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, BC
,
May 22, 2024
/CNW/ -
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.
PEA Highlights
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
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
$530.0 million
After tax IRR
(2)
(%)
14.4 %
21.0 %
27.4 %
33.5
Payback
(3)
/Mine Life (years)
4/14.2
3/14.2
2/14.2
1.7/14.2
(1)
As of May 17, 2024
(2)
NCF means net cash flow; NPV means net present value; IRR means internal rate of return.
(3)
Preproduction capital, excluding mill and heap leach sustaining capital
Capital and Operating Costs
Table 2: Gabbs Project 2024 PEA Capital Costs
Capital Costs
(US$ 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
Projected Mining and Production
Table 4: Gabbs Project 2024 PEA Projected Processing and Metal Production Summary
Year
Tonnes
Process
Ox/S
(1)(2)
(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
(t)
Gold
Equivalent
Production
(3)
(k oz)
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/
5,000
0.52/
0.52
1.40/
1.27
0.22/
0.29
133
194
17,195
223
7
4,000/
5,000
0.35/
0.41
0.72/
1.09
0.19/
0.26
100
135
14,437
175
8
4,000/
5,000
0.43/
0.43
0.89/
1.20
0.23/
0.26
107
146
15,314
187
9
4,000/
5,000
0.47/
0.47
0.72/
1.20
0.26/
0.27
118
140
16,081
202
10
4,000/
5,000
0.36/
0.36
0.60/
0.90
0.25/
0.26
93
109
15,832
175
11
4,000/
5,000
0.25/
0.37
0.55/
1.08
0.23/
0.33
83
119
18,055
176
12
4,000/
5,000
0.51/
0.36
1.21/
1.11
0.16/
0.26
102
153
14,047
175
13
4,000/
5,000
0.67/
0.49
1.39/
0.95
0.21/
0.18
139
155
11,698
201
14
2,317/
5,000
0.20/
0.42
0.64/
0.85
0.14/
0.21
84
99
10,446
138
15
-/
1,028
-/
0.45
-/
0.88
-/
0.20
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 and Processing
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 m
3
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.
Opportunities
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
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.
2024 PEA Comparison to the 2023 PEA
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
Base Case
2024 PEA
Base Case
2023 PEA
Spot Case
(1)
2024 PEA
Spot Case
(1)
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
Qualified persons
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.
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 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.
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,
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.
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%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 09:13e 22-MAY-24