Silver Reef Property, British Columbia
The Silver Reef Property covers an area of over 23,000 hectares approximately 85 kilometers north of Hazelton, British Columbia. P2 has an option to acquire a 100% interest in the Silver Reef Property.
Silver Reef is a new discovery located in an area where limited exploration was carried out prior to P2’s 2020 exploration program. The exploration target at Silver Reef is similar to the Coeur d’Alene district in Idaho, and more locally the historic and high-grade Silver Standard Mine located approximately 80 kilometers to the south. At Silver Reef, sulphide mineralization with quartz/carbonate veins and stockwork are associated with a regional shear zone that cuts through the alteration halo of a large granitic intrusive.
In 2020, P2 conducted an exploration program comprising airborne geophysics, mapping and prospecting, and a two-phase drill program in the two zones identified to date, the Main Zone and the Northwest Zone. Both zones host epithermal silver/gold/lead/zinc mineralization similar in style to other deposits in the North American Silver Belt. Phase One drilling included 1,315 meters in 10 holes, and Phase Two drilling included 374 meters in four holes. Drilling demonstrated that the Main Zone and Northwest Zone structures are well defined with mineralization typical of silver deposits within the silver belt that runs from Idaho through British Columbia into Yukon. Select drill results include:
• Hole SR-004 (Main Zone) intersected 1.18 g/t gold, 521.0 g/t silver, 0.71% lead and 2.17% zinc over 0.5 meters within a 1.3 meter interval grading 0.93 g/t gold, 245.25 g/t silver, 0.33% lead and 0.98% zinc; and
• Hole SR-011 (Northwest Zone) intersected 0.55 g/t gold, 410.69 g/t silver, 2.38% lead and 3.18% zinc over 1.68 meters within a 7.49 meter interval grading 0.24 g/t gold, 188.5 g/t silver, 0.99% lead and 1.51% zinc.
Prospecting has shown that the Main Zone is now at least four kilometers long, and that the Northwest Zone is a separate, parallel trend that is at least two kilometers long. In addition, prospecting also identified several other showings between these two primary trends suggesting the property hosts a stacked system of multiple zones. This more than doubles the known strike extent of the mineralization, which remains open in all directions.
View and download the Technical Report on the Silver Reef Property dated December 31, 2021.
Ken McNaughton, M.A.Sc., P.Eng., is the qualified person responsible for the Silver Reef Property and has reviewed, verified and approved the scientific and technical information on this web site relating to the Silver Reef Property. Mr. McNaughton is the Chief Exploration Officer, P2 Gold, and is a “Qualified Person” as defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects (“NI 43-101”).
Under the terms of an option agreement with an arm’s length private vendor, as amended by an amending agreement, the Company can acquire up to a 70% interest in Silver Reef over a 5-year option period by paying to the vendor:
- $50,000 (paid) and 200,000 shares (issued) in its capital on the signing of the option agreement;
- $200,000 (paid) and 200,000 shares (issued) in its capital on the first anniversary of the agreement;
- $175,000 forthwith following the approval of the Amending Agreement by the TSX Venture Exchange (the “Exchange”) (Exchange approval received on July 8, 2022), payable, at the discretion of the Company, in cash or shares in the capital of the Company valued at the greater of $0.50 per share and the Discounted Market Price (as such term is defined in Exchange Policy 1.1) (paid by the issuance of 350,000 shares) and (ii) 300,000 shares (issued) in the capital of the Company;
- $175,000 on June 12, 2023, payable, at the discretion of the Company, in cash or shares in the capital of the Company valued at the greater of the closing price of the shares on the Exchange on June 9, 2023 and the Discounted Market Price and (ii) 200,00 shares in the capital of the Company; and
- $200,000 on June 10, 2024, payable, at the discretion of the Company, in cash or shares in the capital of the Company valued at the greater of the closing price of the shares on the Exchange on June 7, 2024 and the Discounted Market Price and (ii) 200,000 shares in the capital of the Company;
The Company is also required to incur exploration expenditures of $250,000 (incurred) before the first anniversary of the agreement, $750,000 (incurred) of cumulative exploration expenditures by the second anniversary of the agreement and $2 million of cumulative exploration expenditures by September 30, 2024.
Following exercise of the option, the Company has the right for a period of 120 days to acquire the remaining 30% interest in Silver Reef, for a 100% total interest, on payment of $7.5 million of which up to $4 million may be paid in shares of the Company at its election. If the Company elects to not purchase the remaining 30% interest, the Company and the vendor shall form a joint venture, with the Company appointed the operator. During the first 3 years of the joint venture, the Company will fund the vendor's participating interest in the joint venture. If the vendor fails to sell its interest in the joint venture during such 3-year period, the vendor’s interest will convert to a 3% net smelter returns royalty, provided that the Company will have the opportunity to purchase the vendor’s interest prior to such conversion for $7.5 million.