P2 Gold Advances Nevada's Next Major Gold-Copper Mine

• P2 Gold is advancing the Gabbs gold-copper project in Nevada toward production with an updated Preliminary Economic Assessment (PEA) showing robust economics: 21.6% IRR and $300 million NPV5 at base case prices, rising to 55-56% IRR and $600+ million NPV15 at current spot prices
• The company has achieved significant metallurgical improvements through SART (Sulfidization, Acidification, Recovery, Recycling and Thickening) technology, achieving 88% gold recovery and 67% copper recovery while dramatically improving leach kinetics from 145+ days to under 60 days
• Gabbs contains 3.5 million ounces of gold equivalent resources across four zones (1.22 million indicated, 2.3 million inferred), with approximately 2 million ounces of gold and 1.5 million copper equivalent, making it the projected third or fourth largest gold deposit in Nevada
• The project features exceptional infrastructure advantages including highway access, power lines crossing the property, proximity to services in Hawthorne (45 minutes), and low-utility land in a mining-friendly jurisdiction with no anticipated permitting obstacles
• Management cleared major debt obligations by restructuring $8.8 million owed to Waterton Precious Metals through a $1 million cash payment plus 5 million shares, leaving Waterton with a 15% stake and the company with $1.1 million in convertible debt due January 2026

P2 Gold Corp (TSXV:PGLD) is advancing a compelling gold-copper development story in Nevada through its flagship Gabbs project. Under the leadership of President and CEO Joseph Ovsenek, and Chief Exploration Officer Ken McNaughton—veterans who previously built Silver Standard from a $10 million to $2.8 billion market capitalization and later worked on the Pretium Resources development—the company is positioning itself as Nevada's next significant precious metals producer.

The Gabbs project represents a unique opportunity in the Nevada mining landscape, featuring 3.5 million ounces of gold equivalent resources across four mineralization zones. 

"We're going to be the third or fourth largest gold deposit, and the third or fourth largest copper mine in Nevada." 

Resource Base & Geological Characteristics

The project's resource base consists of 1.22 million ounces of indicated gold equivalent and 2.3 million ounces of inferred gold equivalent, totaling approximately 3.5 million ounces. The distribution breaks down to roughly 2 million ounces of gold and 1.5 million ounces of copper equivalent, creating a balanced precious-base metals profile that provides natural price hedging.

Three of the four zones feature porphyry mineralization that comes to surface and remains open for expansion. The geology is particularly favorable at the Sullivan Zone, where the company has concentrated most of its drilling. 

"Very predictable, very consistent. It's somewhat strata-bound, the higher grades are hosted within a monzonite, the cap rock is generally dead, the volcanics underneath, nicely behaved."

Technological Innovation

P2 Gold's competitive advantage lies in its successful application of SART (Sulfidization, Acidification, Recovery, Recycling and Thickening) technology to overcome historical challenges with copper-gold oxide processing. The technology, which has become increasingly common in the industry, allows simultaneous recovery of both metals while regenerating cyanide, dramatically reducing operating costs.

Recent metallurgical testing has yielded impressive results: 88% gold recovery and 67% copper recovery, with dramatically improved leach kinetics. 

"We get essentially 98% of the gold out in less than 60 days now [compared to previous column tests that were] still leaching and rising at 145 days."

The SART process addresses the historical challenge that made the project uneconomic in the 1990s. 

"The only knock against the project historically was the copper and gold in the oxide component because a cyanide will go after copper as well as gold which made it uneconomic. But since that work was done in the early to mid-90s, the development of the SART plants has taken on."

Economics

The project's economics demonstrate robust returns across various metal price scenarios. Using base case assumptions of $1,950 gold and $450 copper, the 2024 PEA showed a 21.6% internal rate of return and approximately $300 million NPV5. However, at current spot prices, these metrics improve dramatically to 55-56% IRR and over $600 million NPV15.

The development plan envisions a 14.2-year mine life processing 9 million tons annually. The first five years would focus on oxide heap leaching, generating cash flow to fund construction of a conventional mill. 

"At our base case metal price of $1,950 gold, you start the heap leach, in 3 years it's paid off. The next 2 years you're constructing as well as making cash that is paying for that construction." 

Pre-production capital expenditure is estimated at $365 million, with an additional $350 million required for the mill construction in year six, plus approximately $200 million in sustaining capital over the mine life.

Interview with Joseph Ovsenek CEO, & Ken McNaughton, Chief Exploration Officer of P2 Gold

Infrastructure and Operational Advantages

Gabbs benefits from exceptional infrastructure, a critical factor that attracted management's attention. 

"One of the first things we saw when we looked at it was central Nevada, highway access, power access, low utility land." 

The project sits adjacent to highway infrastructure with transmission lines crossing the property from the nearby Paradise Peak Mine.

The operational setup offers significant cost advantages. Workers can commute from Hawthorne, an established mining town 45 minutes away with existing services and infrastructure. "It's all on pavement, we have roads throughout the property," Ovsenek noted, eliminating the need for remote camp construction and associated costs.

Permitting and Development Timeline

The company is progressing through key permitting milestones with water rights permits expected this quarter. "We filed for it, we understand it's soon, we're waiting," Ovsenek confirmed, noting that consultants see no impediments to approval given the low-utility nature of the land with no competing agricultural uses.

Environmental baseline work builds on historical studies from the 1990s when the project was previously permitted for production. The company plans to file its Mine Plan of Operations with the Bureau of Land Management by year-end or early 2025, representing a critical step toward construction permits.

Capital Structure and Financing Strategy

P2 Gold recently completed a significant balance sheet restructuring, resolving $8.8 million in debt to Waterton Precious Metals through a combination of $1 million cash and 5 million shares. This transaction gave Waterton a 15% equity stake while clearing the company's major debt obligations.

Current cash position stands at approximately $1 million, with $1.1 million in convertible debt due January 2026 at a 10-cent conversion price. With shares currently trading around 17-18 cents, the convertibles are in-the-money for conversion. Management's track record of raising "well over a billion or two billion" in previous ventures provides confidence in their ability to secure development financing.

The Investment Thesis for P2 Gold

• Scalable Nevada Gold-Copper Asset: 3.5 million ounce gold equivalent resource base positioned to become Nevada's third or fourth largest gold deposit, with expansion potential across multiple open-ended zones
• Proven Metallurgical Solution: SART technology breakthrough achieving 88% gold and 67% copper recovery with 60-day leach kinetics, solving historical processing challenges that previously made the project uneconomic
• Superior Infrastructure Position: Exceptional location with highway access, power lines crossing property, 45-minute drive to established mining town, and low-utility land minimizing permitting risks and capital requirements
• Robust Project Economics: 55-56% IRR and $600+ million NPV15 at current metal prices, with natural hedge through balanced gold-copper exposure and staged development reducing execution risk
• Experienced Management Team: Proven track record of building Silver Standard from $10M to $2.8B market cap and advancing Pretium through feasibility, demonstrating ability to execute complex development projects
• Clear Path to Production: Updated PEA imminent, water permits expected this quarter, Mine Plan of Operations filing by year-end, with straightforward permitting in mining-friendly Nevada jurisdiction
• Attractive Risk-Reward Profile: Debt-free balance sheet post-Waterton restructuring, current $30M market cap provides significant leverage to successful development execution and potential strategic interest

Macro Thematic Analysis

The convergence of elevated precious metals prices and renewed copper demand creates an exceptional backdrop for Nevada-based gold-copper development projects. With gold trading above $3,400 and copper approaching multi-year highs driven by electrification and renewable energy infrastructure demands, projects like Gabbs benefit from dual-commodity exposure that provides natural price hedging and enhanced economics.

Nevada's established mining jurisdiction offers regulatory certainty and infrastructure advantages that reduce development risks compared to international alternatives. The state's mining-friendly policies, existing power grid, and skilled workforce create operational efficiencies that translate directly to improved project economics. For Gabbs specifically, the infrastructure advantages eliminate typical remote mining challenges, reducing both capital expenditure and operational complexity.

The technological breakthrough represented by SART processing addresses the historical challenge of copper-gold oxide processing that previously rendered many Nevada deposits uneconomic. This technology democratization, combined with the current metal price environment, unlocks previously stranded resources and creates opportunities for mid-tier producers to advance significant projects without the scale requirements of major mining companies.

The strategic importance of domestic copper production adds another dimension to the investment thesis. As governments prioritize supply chain security for critical metals, Nevada-based copper production offers geopolitical stability that international alternatives cannot match. This domestic advantage becomes increasingly valuable as electrification accelerates and copper supply constraints emerge globally.