P2’s gold-copper Gabbs Project is situated within the northwestern end of the Fairplay Mining District in Nevada, approximately 145 miles by paved road from Reno. The Gabbs Project has an Indicated Mineral Resource of 1.12 million ounces of gold equivalent or 0.65 million ounces of gold and 266.7 million pounds of copper (43.4 million tonnes grading 0.47 g/t gold and 0.28% copper) and an Inferred Mineral Resource of 1.64 million ounces of gold equivalent or 0.88 million ounces of gold and 376.1 million pounds of copper (69.9 million tonnes grading 0.39 g/t gold and 0.24% copper). P2 acquired Gabbs in May 2021 and has since completed: two drill programs; two metallurgical programs; and an updated Mineral Resource estimate. A preliminary economic assessment (“PEA”) is now underway and expected to be completed in the first half of 2023.
Location and access to infrastructure
The Gabbs Project is comprised of 543 unpatented lode mining claims and one patented lode mining claim covering four known zones of mineralization and comprising approximately 4,500 hectares. Access is good, with Nevada Highway 361 and Gabbs Pole Line Road crossing the property. A powerline also crosses the property, and a major transmission line is located within 30 kilometers. Access to water by permit is available.
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The gold-copper mineralization at three of the known 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.
Prior to P2’s 2021 drill program, the mineralized zones at Gabbs had not been tested along strike or at depth, and of the 494 holes drilled at Gabbs between 1970 and 2011 by various operators, 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. During the low metals price era of the 1980’s/1990’s, prior operators were focused principally on oxide gold and contemplated an open pit heap leach operation for Gabbs.
P2 is using a systematic strategy to explore for a large porphyry-related copper-gold system at Gabbs. Drilling will focus primarily on the known zones of mineralization to expand and improve the confidence in the mineral resources. Drilling will be spaced for minimum Indicated Mineral Resource category, targeting the full depth of the zones and assaying for the full suite of elements.
A PEA has been commenced that contemplates advancing Gabbs with an approach to operations that contemplates the recovery of both oxide and sulphide gold and copper from the three porphyritic zones and the oxide and sulphide gold from the Car Body Zone.
February 2022 Updated Mineral Resource Estimate
P2 Gold retained P&E Mining Consultants Inc. (“P&E”) to prepare an Updated Mineral Resource Estimate for the Gabbs Project (the “2022 MRE”) based on four diamond drill holes and 27 reverse circulation drill holes completed by P2 in 2021 and 494 drill holes completed by prior Gabbs Project operators between 1970 and 2011 (See news release dated February 10, 2022.) See Tables 1 and 2 below.
Table 1: February 2022 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 | 43.4 | 0.47 | 0.28 | 0.65 | 266.7 | 0.81 | 1.12 |
| Inferred | 69.9 | 0.39 | 0.24 | 0.88 | 376.1 | 0.73 | 1.64 |
- 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.
- 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.
- 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.
- The Mineral Resource Estimate was prepared for a potential open pit scenario using a constraining pit shell (with 50 degree slopes) at respective 0.35 g/t and 0.36 g/t oxide and sulphide gold equivalent cut-off grades. The gold equivalent cut-off grades were derived from US$1,675/oz gold, US$3.80/lb copper, US$2.14/tonne mining cost, US$13.81 and $17.34/tonne respective oxide and sulphide processing costs, US$0.68/tonne G&A cost, 76% and 94% respective Au oxide and sulphide process recoveries and 48% and 87% respective Cu oxide and sulphide process recoveries.
Oxide Mineral Resources at Gabbs now consist of Indicated Mineral Resources of 576,000 ounces of gold equivalent (20.1 million tonnes grading 0.61 g/t gold and 0.29% copper) and Inferred Mineral Resources of 260,000 ounces of gold equivalent (9.9 million tonnes grading 0.61 g/t gold and 0.19% copper). See Table 2 below for a breakdown of the oxide and sulphide Mineral Resources.
Table 2: February 2022 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 |
20.1 | 0.61 | 0.29 | 0.39 | 127.9 | 0.89 | 0.58 |
| Oxide Inferred |
9.9 | 0.61 | 0.19 | 0.19 | 42.2 | 0.80 | 0.26 |
| Sulphide Indicated |
23.3 | 0.34 | 0.27 | 0.26 | 138.8 | 0.73 | 0.55 |
| Sulphide Inferred |
60.1 | 0.35 | 0.25 | 0.68 | 333.8 | 0.72 | 1.38 |
- See Notes 1 to 4 to Table 1 above.
- Tables may differ and not sum due to rounding.
February 2022 Technical Report
View and download the Technical Report and Updated Mineral Resource Estimate of the Gabbs Gold-Copper Property dated February 10, 2022 here.
Preliminary Economic Assessment
The Company has retained Kappes Cassiday & Associates of Reno, Nevada and P&E Mining Consultants of Brampton, Ontario to prepare a PEA on the Gabbs Project. The PEA incorporates the results of the Phase 2 metallurgical program (see news release of May 13, 2022) and the results of drilling to date. The PEA will evaluate both a combination heap leach and milling option and a heap leach only option and was originally targeted for completion in the fourth quarter of 2022. At the beginning of the fourth quarter of 2022 with rampant inflation in the USA, the Company paused the PEA pending the stabilization of construction and operating costs. The PEA is now expected to be completed in the first half of 2023.
Metallurgical Studies
The first metallurgical program was conducted using two composite samples from surface locations in the Sullivan Zone to evaluate the recovery of copper and gold from oxide mineralization, as the 2021 Mineral Resource estimate assumed zero recovery of oxide copper mineralization. The results of these tests demonstrated a recovery range from 96.3% to 98.1% (97.2% average) for gold and 91.2% to 99.1% (95.2% average) for copper.
For the second metallurgical program, the Company retained Kappes, Cassiday & Associates (KCA) in Reno, Nevada to determine the preferred extraction process for the Gabbs mineralization. Based on work completed to date, KCA is proposing that the oxide material be heap leached and gold recovered as a salable doré and cyanide soluble copper produced as a salable copper sulphide concentrate. For the sulphide material, KCA is proposing flotation to recover a salable copper concentrate with the flotation tails cyanide leached to recover additional gold as a salable doré and cyanide soluble copper as a copper sulphide concentrate.
Gold and copper recoveries used for the February 2022 Updated Mineral Resource Estimate were based on historical metallurgical testwork and recently completed metallurgical tests at KCA. For the oxide material, gold and copper recoveries were assumed to be 76% and 48%, respectively. For the sulphide material: (a) gold recovery to copper flotation concentrate was assumed to be 72% and gold recovery from rougher flotation tails was assumed to be 78.0% for a weighted gold recovery of 94%; and (b) copper recovery was assumed to be 79% to flotation concentrate and 7.6% from cyanide soluble copper precipitation for a weighted recovery 87%. Metallurgical testing by KCA is ongoing.
Historical Exploration
The Gabbs property is situated within the northwestern end of the Fairplay Mining District and has been intermittently explored by various operators from the 1970’s until 2011. Over half of the drilling during this period concentrated on the Sullivan porphyry gold-copper deposit. Two pre-feasibility level studies were completed for Sullivan, in 1990 (by Gwalia Gold Mining) and 1995 (by Arimetco) [both studies were completed prior to the development of the sulphidization-acidification-recycling-thickening process (SART) for the recovery of oxide gold with copper]. The most recent substantive exploration work on the property was completed by Newcrest from 2002 to 2008, which included geochemical and geophysical surveying and drilling. Newcrest decided in 2009 to divest its US properties and Gabbs was acquired by St. Vincent Minerals Inc. in 2010. Prior to P2’s 2021 exploration program, no exploration work had been undertaken at Gabbs since St. Vincent’s work in 2011.
Transaction Terms
On May 14, 2021, the Company acquired all the assets that comprise the Gabbs Project located on the Walker-Lane Trend in the Fairplay Mining District of Nye County, Nevada pursuant to an asset purchase agreement dated February 22, 2021, as amended by subsequent amendments dated May 4, 2021 and April 28, 2022 among the Company, P2 Gabbs Inc. (a wholly-owned subsidiary of the Company) and Borealis Mining Company, LLC (“Borealis”), an indirect, wholly-owned subsidiary of Waterton Precious Metals Fund II Cayman, LP (“Waterton”). To acquire the Gabbs Project, at closing the Company paid US$1million to Borealis, and issued 15 million shares in its capital to Waterton and agreed to pay an additional US$9 million to an affiliate of Borealis, Waterton Nevada Splitter, LLC (“Splitter”), over the following two years. (See the Company’s news releases dated February 23, 2021, announcing the acquisition of the Gabbs Project, and May 5, 2021 and April 28, 2022, announcing amendments to the terms of the acquisition of the Gabbs Project).
Under an amending agreement dated March 6, 2023, the Company restructured the outstanding payment terms. P2 issued to Splitter 3,320,534 shares in the capital of the Company and agreed to the following payment terms: (a) US$150,000 on or before December 31, 2023, (b) US$250,000 on or before December 31, 2024, (c) US$2 million on or before December 31, 2025 and (d) US$2.4 million on or before December 31, 2026. The Amending Agreement also contemplates, (x) if P2 raises, through the issuance of debt or equity, in excess of C$7.5 million (excluding flow-through funds), 10% of the funds raised will be paid to Splitter against the longest dated milestone payment and (y) on the sale of an interest in, or of, Gabbs, the proceeds will be paid to Splitter up to the amount outstanding at the time.
In addition, P2 issued to Splitter a US$4,000,000, zero coupon convertible note (the “Note”) with a four-year term (expiring March 5, 2027) convertible at a price of C$0.30 per share provided that the Note cannot be converted if all payments due under the Amending Agreement have been made at the time the Note is called (other than if a change of control is to occur prior to repayment of the Note). The Note can be called at any time on payment of 115% in the first year, 130% in the second year and 150% thereafter and is due on maturity, an event of default or a change of control. Also, under the Note, approval by the shareholders of the Company is required if conversion of the Note would make Splitter a Control Person (as defined in the Exchange’s Corporate Finance Manual). (See the Company’s news releases dated March 6, 2023, March 20, 2023 and March 29, 2023 announcing the terms of the re-structuring of the terms of the Gabbs Project.)
Quality Assurance
The February 2022 Updated Mineral Resource Estimate was prepared under the supervision of Eugene Puritch, P.Eng., FEC, CET of P&E Mining Consultants Inc. of Brampton, Ontario, who is an Independent Qualified Person (“QP”), as defined by National Instrument 43-101. Mr. Puritch has reviewed and approved the technical contents of this web site relating to the 2022 MRE and 2021 MRE. Mr. Christopher L. Easton, MMSA QP, of Kappes, Cassiday & Associates is the Independent QP responsible for metallurgical testwork and has reviewed and approved the technical contents of this web site relating to Gabbs Project metallurgical test work. Ken McNaughton, M.A.Sc., P.Eng., Chief Exploration Officer, P2 Gold, is the Company Qualified Person, as defined by NI 43-101, responsible for the Gabbs Project. Mr. McNaughton has reviewed, verified and approved the technical information on this web site.
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