P2 targets updated PEA for Nevada gold project

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P2 Gold Inc. [PGLD-TSXV] said it is re-evaluating the preliminary economic assessment (PEA) for its 100% owned Gabbs project, which is located in the Walker-Lane Trend in Nevada. The company said a new PEA is expected to be completed in the second quarter of this year.

In re-evaluating the PEA, the company is assessing the benefits of incorporating the lower-grade mineralized material above the cut-off grade for heap leach and mill mineralized material that was not included in the September, 2023, PEA.

The 2024 PEA is expected to consist of a heap leach operation and a mill operation starting up after the initial heap leach capital is repaid, with the heap leach and mill operating in tandem for the remainder of the mine life.

The Gabbs Project consists of 355 unpatented lode mining claims and one patented lode mining claim covering four known zones of mineralization and spanning approximately 2,800 hectares. The 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.

The gold mineralization at the fourth zone, Car Body, is interpreted to be low sulphidation epithermal mineralization.

P2 Gold retained P&E Mining Consultants Inc. to prepare a mineral resource estimate for the Gabbs Project based on 494 drill holes completed by prior project operators between 1970 and 2011. The project is estimated to contain an indicated resource of 1.06 million ounces of gold equivalent or 676,000 ounces of gold, 1.96 million ounces of silver and 261.3 million pounds of copper. On top of that is an inferred resource of 1.36 million million ounces of gold equivalent or 895,000 ounces of gold, 1.9 million ounces of silver and 304 million pounds of copper.

The September 2023 PEA envisages average annual gold equivalent production of 139,000 ounces, with an estimated pre-production capital cost, including contingencies of US$277.7 million. Life-of-mine production at Gabbs was expected to be close to 2.0 million ounces of gold equivalent.

The total projected life-of-mine revenue was forecast to be US$3.43 billion over a project life-span of 13.4 years.

The 2023 PEA contemplated head leach processing as the first phase of operations for the initial five years to reduce upfront capital requirements and project risks. The company said heap leach operations will pay for preproduction capital and a significant portion of the mill capital prior to the commencement of mill processing in year six.

The inferred resource estimate was prepared for a potential open pit scenario using a constraining pit shell at respective 0.24 g/t and 0.30 g/t oxide and sulphide gold equivalent cut-off grades.

On Monday, P2 Gold shares eased 5.5% or $0.005 to $0.085. The shares currently trade in a 52-week range of 37.5 cents and $0.06.

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