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Gabbs Project, Nevada

Gabbs Project Map

P2’s flagship gold-copper Gabbs Project is situated within the northwestern end of the Fairplay Mining District in Nevada, approximately 145 miles by paved road from Reno.  The Gabbs Project has an Inferred Mineral Resource of 1.84 million ounces of gold equivalent or 1.26 million ounces of gold and 422.3 million pounds of copper (73.1 million tonnes grading 0.54 g/t gold and 0.26% copper). The property was explored historically by prior owners on an intermittent basis, leaving the full potential of each of the known zones of copper and gold mineralization to be recognized with modern, systematic exploration.  P2 acquired Gabbs in May 2021 with a strategy to optimize the approach to the gold-copper mineralization, expand the mineral resource and advance the project to feasibility stage.

Location and access to infrastructure

The Gabbs Project is comprised of 421 unpatented lode mining claims and one patented lode mining claim covering four known zones of mineralization and comprising approximately 3,300 hectares.  Access is good, with Nevada Highway 361 and Gabbs Pole Line Road crossing the property. A powerline also crosses the property, and a major transmission line is located within 30 kilometers.  Access to water by permit is available.

P2 Gold’s opportunity – revisit a solid asset with a modern approach

The gold-copper mineralization at three of the known 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.

The mineralized zones have not been tested along strike or at depth, and of the 494 holes drilled at Gabbs between 1970 and 2011 by various operators, 180 holes (36%) ended in mineralization. Also, a significant number of holes drilled prior to 2004 were, depending on the focus of the operator, assayed only for gold or only for copper, not both metals.  During the low metals price era of the 1980’s/1990’s, prior operators were focused principally on oxide gold and contemplated an open pit heap leach operation for Gabbs.

P2 is using a systematic strategy to explore for a large porphyry-related copper-gold system at Gabbs.  Drilling will focus primarily on the known zones of mineralization to expand and improve the confidence in the mineral resources.  Drilling will be spaced for minimum Indicated Mineral Resource category, targeting the full depth of the zones and assaying for the full suite of elements.

P2 is advancing Gabbs with an approach to operations that contemplates the recovery of both oxide and sulphide gold and copper from the three porphyritic zones, and a heap leach operation for the higher grading gold Car Body Zone. 

2021 Mineral Resource Estimate

P2 Gold retained P&E Mining Consultants Inc. (“P&E”) to prepare a Mineral Resource Estimate for the Gabbs Project based on 494 drill holes completed by prior project operators between 1970 and 2011. (See news release dated February 23, 2021.)  The Gabbs Project has an Inferred Mineral Resource of 1.84 million ounces of gold equivalent or 1.26 million ounces of gold and 422.3 million pounds of copper (73.1 million tonnes grading 0.54 g/t gold and 0.26% copper).  See Tables 1 and 2 below.

Table 1:  Gabbs Project Inferred Mineral Resource Estimate(1)(2)(3)(4)

Tonnes
(M)
Gold Grade
(g/t)
Copper Grade
(%)
Gold
(M oz)
Copper
(M lbs)
Gold Eq. Grade
(g/t)
Gold Eq.
(M oz)
73.1 0.54 0.26 1.26 422.3 0.79 1.84
  1. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
  2. The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.
  3. The Mineral Resources in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), Standards on Mineral Resources and Reserves, Definitions (2014) and Best Practices (2019) prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.
  4. The Inferred Mineral Resource Estimate was prepared for a potential open pit scenario using a constraining pit shell (with 50 degree slopes) at respective 0.24 g/t and 0.30 g/t oxide and sulphide gold equivalent cut-off grades.  The gold equivalent cut-off grades were derived from US$1,600/oz gold, US$3/lb copper, US$2/tonne mining cost, US$8 and $12/tonne oxide and sulphide processing costs, US$2/tonne G&A cost and 80% Au oxide and sulphide process recoveries and 90% Cu sulphide process recoveries.  A zero process recovery for oxide Cu was used.

Table 2:  Gabbs Project Inferred Mineral Resource Estimate by Zone(1)(2)(3)

Zone Tonnes
(M)
Gold Grade
(g/t)
Copper Grade
(%)
Gold
(M oz)
Copper
(M lbs)
Gold Eq. Grade
(g/t)
Gold Eq.
(M oz)
Sullivan 37.6 0.58 0.28 0.70 233.8 0.75 0.90
Lucky Strike 32.6 0.41 0.26 0.43 188.3 0.77 0.81
Car Body 2.8 1.39 0.00 0.13 0 1.39 0.13
Gold Ledge(3) 0.1 0.76 0.15 0 0 0.76 0
Total 73.1 0.53 0.26 1.26 422.3 0.79 1.84
  1. See Notes 1 to 4 to Table 1 above.
  2. Tables may differ and not sum due to rounding.
  3. Gold Ledge Inferred Mineral Resource rounded to zero.

The Gabbs Project oxide Inferred Mineral Resource Estimate is 610,000 ounces of gold (26.2 million tonnes grading 0.72 g/t gold and assuming zero recovery for copper).  See Table 3 below for a breakdown of the oxide and sulphide Inferred Mineral Resources.

Table 3:  Gabbs Project Inferred Mineral Resource Estimate by Rock Group(1)(2)(3)

Rock Group Tonnes
(M)
Gold Grade
(g/t)
Copper Grade
(%)
Gold
(M oz)
Copper
(M lbs)
Gold Eq. Grade
(g/t)
Gold Eq.
(M oz)
Oxide(3) 26.2 0.72 0.25 0.61 143.3 0.72 0.61
Sulphide 46.9 0.43 0.27 0.65 279.2 0.82 1.24
Total 73.1 0.54 0.26 1.26 422.3 0.79 1.84
  1. See Notes 1 to 4 to Table 1 above.
  2. Tables may differ and not sum due to rounding.
  3. Copper recovery in oxides assumed to be zero.

2021 Technical Report

A National Instrument 43-101 Technical Report “Amended and Restated Mineral Resource Estimate of the Gabbs Gold‐Copper Property Fairplay Mining District, Nye County, Nevada, USA” has been prepared by P&E with an effective date of January 13, 2021.

Exploration Target

Based on historical drilling, the Gabbs Project has an Exploration Target of 0.90 million to 2.25 million ounces of gold (contained in 40 million to 70 million tonnes at an average grade of 0.7 to 1.0 g/t gold).  No Exploration Target has been estimated for copper.  The potential quantity and grade of this Exploration Target is conceptual in nature.  There has been insufficient exploration to define it as a Mineral Resource and it is uncertain if further exploration will result in the target being delineated as a Mineral Resource.

2022 Plans

P2 plans to advance both exploration and engineering through 2022.  On the exploration front, a resource estimate update is planned for the first quarter of 2022 that will incorporate the results of the 2021 drill program and Phase One and Two metallurgical programs.  The resource estimate update is expected to be followed by a 2022 drill program and a further resource estimate update targeted for the fall of 2022.  On the engineering front, the Phase Two metallurgical program is underway and expected to be completed in the first quarter of 2022.  Work will then begin on a preliminary economic analysis with completion targeted for the fourth quarter of 2022.

2021 Exploration & Metallurgical Studies

P2 has completed a range of activities to advance Gabbs since acquiring the project in February 2021:  

Drilling

Phase One drilling comprised 580 meters in four diamond drill holes and 4,120 meters in 27 reverse circulation (“RC”) drill holes.  All four diamond and 23 RC holes were completed in the Sullivan Zone. Results have demonstrated that the zone of gold–copper mineralization at Sullivan is much thicker and higher in grade than previously defined by historic exploration work. Assays from 2021 RC drilling are expected to continue to be received to Q 1 2022. 

Geophysics Surveying

A Natural Source Magneto Telluric survey has been run over the project which totals 25.7 line kilometers. This survey covered all four known zones of mineralization and the prospective source locations between the zones.

Additional geophysics conducted during 2021 included satellite hyperspectral, airborne geophysics and ground geophysics surveys. 

Metallurgical Studies

The first metallurgical program was conducted using two composite samples from surface locations in the Sullivan Zone to evaluate the recovery of copper and gold from oxide mineralization, as the current Mineral Resource estimate assumes zero recovery of oxide copper mineralization. The results of these tests demonstrated a recovery range from 96.3% to 98.1% (97.2% average) for gold and 91.2% to 99.1% (95.2% average) for copper.

A second metallurgical program is underway using samples from the 2021 drill program. The program is using drill core from two-diamond drill holes to provide samples for bottle roll and column tests of the oxide and transition zones. In addition, assay rejects from the Gabbs Phase One Drill Program will be used to provide samples for test work on the sulphide mineralization. The results of the second metallurgical program are expected to be used in the planned preliminary economic assessment.

Historical Exploration

The Gabbs property is situated within the northwestern end of the Fairplay Mining District and has been intermittently explored by various operators from the 1970’s until 2011.  Over half of the drilling during this period concentrated on the Sullivan porphyry gold-copper deposit.  Two pre-feasibility level studies were completed for Sullivan, in 1990 (by Gwalia Gold Mining) and 1995 (by Arimetco).  The most recent substantive exploration work on the property was completed by Newcrest from 2002 to 2008, which included geochemical and geophysical surveying and drilling.  Newcrest decided in 2009 to divest its US properties and Gabbs was acquired by St. Vincent Minerals Inc. in 2010. Prior to P2’s 2021 exploration program, no exploration work had been undertaken at Gabbs since St. Vincent’s work in 2011.

Quality Assurance

The Mineral Resource Estimate was prepared by Eugene Puritch, P.Eng. and F.H. Brown, P.Geo. of P&E Mining Consultants Inc. of Brampton, Ontario, Independent Qualified Persons (“QP”), as defined by National Instrument 43-101. Mr. Puritch has reviewed and approved the scientific and technical information on this web site relating to the Gabbs Project.  Ken McNaughton, M.A.Sc., P.Eng., Chief Exploration Officer, P2 Gold, is the QP responsible for the Gabbs Project exploration program.

Transaction Terms

On May 14, 2021, the Company acquired all the assets that comprise the Gabbs Project located on the Walker-Lane Trend in the Fairplay Mining District of Nye County, Nevada pursuant to an asset purchase agreement dated February 22, 2021, as amended by an amendment dated May 4, 2021 among the Company, P2 Gabbs Inc. (a wholly-owned subsidiary of the Company) and Borealis Mining Company, LLC (“Borealis”).

To acquire the Gabbs Project, at closing the Company paid US$1 million to Borealis (an indirect, wholly-owned subsidiary of Waterton Precious Metals Fund II Cayman, LP (“Waterton”)), and issued 15 million shares in its capital to Waterton.  In addition, the Company is required to pay to Waterton Nevada Splitter LLC, an affiliate of Borealis, (a) US$4 million on the 12-month anniversary of closing and (b) US$5 million on the earlier of the announcement of the results of a Preliminary Economic Assessment and the 24-month anniversary of closing.  Borealis has reserved for itself a 2% net smelter returns royalty on production from the Gabbs Project, of which one percent may be repurchased at any time by P2 Gold for US$1.5 million and the remaining one percent of which may be repurchased for US$5 million.

Gabbs Project Investor Presentation

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