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 m3 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.