P2 Gold posts positive PEA for Gabbs project, Nevada
P2 Gold Inc. [PGLD-TSXV; PGLDF-OTCQB] reported 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, with mineral resource and mining contributions from P&E Mining Consultants Inc. in accordance with NI 43-101 Standards of Disclosure for Mineral Projects
PEA highlights: Open-pit, heap-leach operation focused predominantly on oxide gold and copper mineral resources (phase 1), 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/oz gold and US$4.50/lb copper; Mine life of 11.1 years, with an average processing rate of 11,000 tonnes per day; Life-of-mine (LOM) gold equivalent production of 837,000 ounces (43.4 million tonnes at 0.54 g/t gold and 0.25% copper) and LOM gold production of 562,100 ounces; Estimated preproduction capital cost, including contingencies, of US$230.2-million.
“The PEA provides a solid plan for advancing phase 1 development at Gabbs, where we are taking a phased approach to production,” commented Joe Ovsenek, president and CEO. “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 1 operations beyond that contemplated in the PEA. Phase 2 will focus on the development of the sulphide mineralization which sits below the oxide mineralization. Over all, we expect Gabbs to be a long-life gold and copper mine as the oxide mineralization is expanded and the sulphide mineralization is brought on-line.” Mining and processing
The mineralized material will be mined by standard open-pit mining methods using an owner mining fleet of 90-tonne haul trucks and 11-cubic-metre 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 eight-metre lifts.
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.
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 million tonnes grading 0.53 g/t gold and 0.23% copper).
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.