Metallurgical Breakthrough Cuts P2 Gold Extraction Time by 60% While Boosting Recovery Rates Towards 2028 Target Production

• P2 Gold's Gabbs project in Nevada demonstrates exceptional value with a $700 million net present value at 10% discount rate and 62% internal rate of return, contrasting sharply with the company's $25 million market capitalisation and 3.5 million ounce gold equivalent resource base.
• Recent Phase 3 metallurgical results show significant improvements with gold recovery rates increasing from 78% to 85% and copper recovery from 54% to 67%, while extraction time was dramatically reduced from 145 days to just 58 days for 98% gold recovery. Updated PEA due in the coming weeks.
• The management team led by CEO Joseph Ovsenek and Chief Exploration Officer Ken McNaughton brings proven experience from successfully advancing Pretium Resources' Brucejack mine from discovery to production in under eight years, providing execution confidence for their aggressive 2028 production timeline.
• P2 Gold plans to skip pre-feasibility and advance directly to feasibility study starting January, leveraging extensive historical data and the project's simple heap leach processing with SART plant technology in Nevada's mining-friendly jurisdiction.
• The company is currently raising capital through a C$6 million financing round with strong investor interest, funding expansion drilling starting mid-to-late October and metallurgical programs supporting feasibility studies while maintaining aggressive development momentum.

P2 Gold presents a compelling investment opportunity in the current gold market environment, with the company's Gabbs project in Nevada demonstrating robust economics that appear significantly undervalued relative to its current market capitalisation. The project's preliminary assessment from May 2024 reveals impressive financial metrics, including a 62% IRR and a NPV (10%) of approximately $700 million when spot metal prices are applied. This valuation stands in stark contrast to the company's market capitalisation of just $25 million, suggesting a potential value gap that could attract investor attention.

The Gabbs project contains roughly 3.5 million ounces of gold equivalent resources, positioning it as a substantial asset in P2 Gold's portfolio. The project's location in Nevada provides additional advantages, as the jurisdiction is well-regarded for its mining-friendly regulatory environment and established permitting processes. This geographic advantage, combined with the project's planned heap leach processing method, creates a pathway for relatively straightforward development compared to more complex mining operations in challenging jurisdictions.

Breakthroughs Enhances Gabbs Project Viability

Recent metallurgical achievements represent a significant catalyst for P2 Gold's development timeline and project economics. The company announced results from its Phase 3 metallurgical program revealing substantial improvements over previous testing phases. Gold recovery rates increased from 78% to 85%, while copper recovery rates in oxides improved dramatically from 54% to 67%.

Joseph Ovsenek, President & CEO of P2 Gold, proudly states:

"I think what's even more important is when we did our other columns, it took us 145 days to reach the limit of of getting all the metal out. With this new program, we had 98% of the gold recovered and 85% of the copper recovered in 58 days. Because of the leach kinetics, because it's coming out so much quicker, we can maybe drop the footprint size of our project."

This improvement in extraction speed could translate into reduced capital expenditure requirements when the company advances to feasibility study stage, potentially making the project even more attractive from an economic standpoint. The enhanced metallurgical performance addresses previous concerns about recovery rates and provides a stronger foundation for the project's technical viability.

Management Track Record Provides Execution Confidence

The metallurgical improvements also demonstrate the company's commitment to optimizing project parameters through systematic testing and development work. Chief Exploration Officer Ken McNaughton's decision to revisit the metallurgical program after identifying potential improvements in the Phase 2 results shows the management team's attention to technical detail and willingness to invest in optimisation efforts that could yield significant long-term benefits.

P2 Gold's leadership team brings proven experience in advancing mining projects from discovery through production, providing investors with confidence in the company's ability to execute on its development plans. Ovsenek and McNaughton previously worked together at Pretium Resources, where they successfully took the Brucejack mine from discovery to production in under eight years. This track record demonstrates their capability to navigate the complex processes of resource development, permitting, financing, and construction that are required to bring a mining project to commercial operation.

The management team's aggressive approach to project advancement reflects lessons learned from their previous experience.

"One thing we've learned is you have to set aggressive targets. If you don't, you fill that time," Ovsenek noted.

This emphasizes their commitment to maintaining momentum throughout the development process. This philosophy has translated into P2 Gold's ambitious timeline, with the company targeting potential production by 2028 if development milestones align favourably.

Their experience with alternative financing methods also provides strategic advantages in the current market environment. The team's previous decision on the Brucejack mine to utilise private equity financing for construction, despite higher costs, allowed them to begin within months rather than waiting 18 months to two years for traditional bank financing. This experience positions them well to evaluate and execute optimal financing strategies for the Gabbs project.

Interview with President & CEO Joseph Ovsenek

Development Timeline and Near-Term Catalysts

P2 Gold has established a clear development pathway with specific milestones that will provide regular catalysts for investor interest over the next 12 months. The company plans to begin expansion and infill drilling in mid-to-late October, which should generate drill results over the following six months. These results will be crucial for potentially expanding the resource base and providing additional geological confidence in the deposit.

The company's decision to skip pre-feasibility study and move directly to feasibility represents an aggressive but well-reasoned approach based on the project's characteristics and available historical data.

"There's enough historical work and it's such a simple process, especially to start with. It's a heap leach in Nevada. The only thing new is the SART plant, and there's a lot of those been built now," Ovsenek added.

Key near-term milestones include obtaining water permits, drilling water wells, and filing the mining plan of operation within four to five months. These regulatory and technical achievements will demonstrate progress toward eventual production and could serve as catalysts for investor recognition and potential re-rating of the company's valuation.

Financing and Capital Requirements

P2 Gold is currently executing a financing round Initially targeting C$6 million but potentially expanding based on investor interest levels. This financing will fund the upcoming drilling program and metallurgical work supporting the feasibility study, providing the company with sufficient capital to maintain development momentum through the next phase of advancement.

The current financing environment appears favourable for P2 Gold, with management reporting strong investor interest driven by several factors including the project's location, simplicity, and the team's track record. The company's approach of securing adequate financing to maintain aggressive development timelines aligns with their previous experience and strategic philosophy of prioritizing speed over minimizing capital costs in certain circumstances. Ovsenek explained:

"We expect to get expansion and infill drilling getting going by mid to late October. So we'll be drilling throughout the year. We're starting some more metallurgical programs in support of feasibility this fall. So we have the cash to really start picking up the pace of advance."

The relatively modest financing requirements at this stage reflect the project's heap leach processing approach and the extensive historical data available from previous work in the 1980s and 1990s. This reduces the amount of additional technical work required compared to greenfield projects, potentially allowing P2 Gold to advance more efficiently through development stages.

The Investment Thesis for P2 Gold

• Value Gap Opportunity: With a $700 million NPV against a $25 million market cap, P2 Gold offers significant upside potential if the market recognizes the project's value proposition.
• Proven Management Execution: The leadership team's track record of taking Brucejack from discovery to production in under eight years provides confidence in their ability to deliver on aggressive development timelines.
• Enhanced Metallurgy: Recent improvements showing 85% gold recovery and 67% copper recovery, with 98% of gold extracted in 58 days, could reduce capital requirements and improve project economics in future studies.
• Strategic Location: Nevada's mining-friendly jurisdiction and established heap leach infrastructure provide regulatory and operational advantages that reduce development risks.
• Clear Development Path: The company's decision to advance directly to feasibility study, supported by extensive historical data, could accelerate the timeline to production by 2028.
• Multiple Catalysts: Upcoming drill results, water permitting, and feasibility study progress over the next 12 months provide regular opportunities for market re-rating.
• Financing Momentum: Strong investor interest in the current financing round suggests improved market sentiment and access to capital for continued development.
• Leverage to Gold Prices: At current gold prices above $3,600 per ounce, the project's economics become increasingly attractive, with potential for further optimisation at higher metal prices.

P2 Gold represents a compelling investment opportunity for investors seeking exposure to Nevada gold development with experienced management and clear value catalysts. The combination of robust project economics, improved metallurgical performance, and an aggressive but achievable development timeline creates multiple pathways for value creation. The significant gap between the project's net present value and current market capitalisation suggests substantial upside potential, while the management team's proven track record provides confidence in execution capabilities. Near-term catalysts including drill results, permitting progress, and feasibility advancement should provide regular opportunities for market recognition of the company's value proposition.

TL;DR

P2 Gold offers exceptional value with a $700M Nevada gold project valued at only $25M market cap. Recent metallurgical improvements show 85% gold recovery in 58 days (previously 145 days), while proven management targets 2028 production. The company advances directly to feasibility study, skipping pre-feasibility, with drilling starting October and strong investor interest in current C$6M financing round.

Frequently Asked Questions (FAQs) AI-Generated

Q: Why is P2 Gold's market cap so much lower than the project's net present value?

‍A: The significant valuation gap likely reflects the company's development stage status, limited market awareness, and investor preference for producing assets over development projects. The $25 million market cap versus $700 million NPV suggests substantial upside potential if the market recognises the project's value as development milestones are achieved.

Q: What makes the management team qualified to execute this project?

‍A: CEO Joseph Ovsenek and Chief Exploration Officer Ken McNaughton previously worked together at Pretium Resources, where they successfully took the Brucejack project from discovery to production in under eight years. Their proven track record demonstrates capability in navigating resource development, permitting, financing, and construction processes required for mining project execution.

Q: How realistic is the 2028 production timeline?

‍A: The aggressive timeline is supported by several factors: extensive historical data from 1980s-1990s work, Nevada's mining-friendly jurisdiction, straightforward heap leach processing, and the team's decision to skip pre-feasibility study. However, the timeline depends on successful completion of feasibility study, permitting, and financing, with potential delays from regulatory or technical challenges.

Q: What are the main risks facing P2 Gold's development plans?

‍A: Key risks include potential permitting delays, capital cost inflation in the current environment, technical challenges during feasibility study, financing difficulties, and gold price volatility. Additionally, the company's small size and limited financial resources could impact its ability to complete development if unexpected challenges arise.

Q: How do the improved metallurgical results impact project economics?

‍A: The Phase 3 results showing faster extraction kinetics (58 days vs 145 days) and higher recovery rates (85% gold, 67% copper) could significantly reduce capital requirements by allowing smaller project footprint and shorter leach cycles. These improvements should enhance project economics in the upcoming feasibility study, though specific financial impacts won't be quantified until the updated assessment is completed.