P2 Gold releases details of updated Gabbs estimate

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P2 Gold Inc. [PGLD-TSXV; CTIMF-OTC] has filed a NI 43-101 compliant technical report containing an updated resource estimate for the Gabbs gold-copper property in the Fairplay Mining District, Nye County, Nevada.

The announcement comes after P2 Gold said it had struck a deal with Borealis Mining Co., LLC, a unit of Waterton Precious Metals Fund 11 Cayman, LP to acquire all the assets in relation to the Gabbs Project.

Shares eased 1.6% or $0.01 to 60 cents and trade in a 52-week range of 90 cents and $0.06.

In a press release on February 23, 2021, P2 said the Gabbs Project consists of 355 unpatented lode mining claims and one patented lode mining claim covering four known zones of mineralization and covering 2,800 hectares.

Gold-copper mineralization at three of the zones, Sullivan, Lucky Strike, and Gold Ledge, is hosted within what are interpreted to be sills associated with an alkaline gold/copper porphyry. Gold mineralization at the fourth zone, Car Body, is interpreted to be low-sulphidation epithermal mineralization.

The Gabbs Project contains inferred resources of 1.84 million oz gold equivalent or 1.26 million oz gold and 422.3 million lbs copper (73.1 million tonnes of 0.54 g/t gold and 0.26% copper). Most is located in the Sullivan and Lucky Strike zones.

Due to limited systematic exploration completed to date, the full potential of each zone has yet to be recognized, the company said. Based on historical drilling, the Gabbs Project has an exploration target of up to 2.25 million oz gold. No target has been estimated for copper.

Under terms of the asset purchase agreement, P2 Gold will play US$5 million and issue 15 million shares to Waterton at closing. It will also pay US$5 million to Waterton on the earlier of the announcement of the results of a preliminary economic assessment and the two-year anniversary of closing. Waterton will retain a 2% NSR from Gabbs. Of that amount 1.0% can be repurchased for US$1.5 million and the balance for US$5 million.

P2 said it plans to fund the acquisition by raising $16 million from a private placement of subscription receipts priced at 50 cents each. It the placement is brokered, the company said it intends to grant the brokers a green shoe option to sell an additional 4.8 million subscription receipts at the same price. At closing the subscription receipts can be exchanged for one common share of the company.


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