P2 Gold Announces Terms of Financing for the Gabbs Project, Nevada

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

VANCOUVER, British Columbia, April 06, 2021 (GLOBE NEWSWIRE) -- P2 Gold Inc. (“P2” or the “Company”) (TSX-V:PGLD) is pleased to announce that it intends to complete a non-brokered private placement of units (the “Private Placement”) for the acquisition and exploration of the Gabbs Project located on the Walker-Lane Trend in the Fairplay Mining District of Nye County, Nevada.

The Private Placement will consist of up to 32,000,000 units (the “Units”) at a price of $0.50 per Unit for gross proceeds of up to $16 million. Each Unit will consist of one common share in the capital of the Company and one common share purchase warrant (a “Warrant”). Each Warrant will entitle the holder to purchase one additional common share in the capital of the Company at an exercise price of $0.85 per common share for a period of two years from the date of issue (the “Expiry Time”), provided that, if after four months from the date of issue, the closing price of the common shares of the Company on the TSX Venture Exchange (the “Exchange”) is equal to or greater than $1.50 for a period of 10 consecutive trading days at any time prior to the Expiry Time, the Company will have the right to accelerate the Expiry Time of the Warrants by giving notice to the holders of the Warrants by news release or other form of notice permitted by the certificate representing the Warrants that the Warrants will expire at 4:30 p.m. (Vancouver time) on a date that is not less than 15 days from the date notice is given.

The Private Placement will close on completion of documentation and is conditional upon receipt of all necessary regulatory approvals, including the approval of the Exchange. The proceeds of the Private Placement will be used to fund the acquisition of the Gabbs Project, the Phase 1 Gabbs exploration program and general corporate purposes.

The Private Placement will be offered to accredited investors in all Provinces of Canada pursuant to applicable securities laws. In connection with the Private Placement, the Company may pay finders’ fees as permitted by the policies of the Exchange. All securities issued pursuant to the Private Placement will be subject to a four-month hold period.

The securities to be offered in the Private Placement have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

The Company anticipates that insiders will subscribe for Units. The issuance of Units to insiders is considered a related party transaction subject to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions . The Company intends to rely on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(a) and 5.7(a) of Multilateral Instrument 61-101 on the basis that the participation in the private placement by the insiders will not exceed 25% of the fair market value of the company’s market capitalization. A material change report in connection with the Private Placement will be filed less than 21 days before the closing of the Private Placement. This shorter period is reasonable and necessary in the circumstances as the Company wishes to complete the Private Placement in a timely manner.

Gabbs Acquisition

On February 23, 2021, the Company announced that it had entered into an agreement with Borealis Mining Company, LLC (“Waterton”), an indirect, wholly-owned subsidiary of Waterton Precious Metals Fund II Cayman, LP to acquire all of the assets that comprise the Gabbs Project (the “Transaction”). The closing of the Transaction remains subject to the satisfaction of customary closing conditions for a transaction of such nature, including acceptance by the Exchange and the completion of the Private Placement. The Transaction will be an arm’s length transaction under Exchange policies.

Gabbs Project Description and Inferred Mineral Resource Estimate

The Gabbs Project is comprised of 355 unpatented lode mining claims and one patented lode mining claim covering four known zones of mineralization and comprising approximately 2,800 hectares. Nevada Highway 361, Gabbs Pole Line Road and a powerline cross the Gabbs Project. 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.

The Company 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. A National Instrument 43-101 Technical Report has been prepared by P&E with an effective date of January 13, 2021, which has been posted on www.p2gold.com and the Company's profile on www.SEDAR.com.

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)

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

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)

Gabbs Project Exploration Target and Potential

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.

Due to the limited systematic exploration completed to date, the Company believes the full potential of each of the known zones of mineralization at Gabbs has yet to be recognized. The mineralized zones have not been tested along strike or at depth, and of the 494 holes drilled at Gabbs between 1970 and 2011, 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.

Following the closing of the acquisition, the Company plans to undertake a systematic exploration program for a large porphyry-related copper-gold system. Initial drilling will focus on the known zones of mineralization, to expand and improve the confidence in these Mineral Resources, and a geophysical target below the Gold Ledge Zone, which is a potential alkaline porphyry and the source of the mineralization at the Sullivan, Lucky Strike and Gold Ledge zones.

Gabbs Acquisition - Transaction Terms

Under the terms of an asset purchase agreement, P2 Gold has agreed (a) to pay US$5 million and issue 15 million shares in its capital to Waterton at closing, and (b) to pay an additional US$5 million to Waterton on the earlier of the announcement of the results of a Preliminary Economic Assessment and the 24-month anniversary of closing. Waterton will also reserve 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. Following completion of the Transaction and the Private Placement Waterton will be an Insider of the Company.

For further details on the Gabbs Project acquisition please see www.p2gold.com/gabbs.

Qualified Persons

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 contents of this news release. Ken McNaughton, M.A.Sc., P.Eng., Chief Exploration Officer, P2 Gold, is the QP responsible for the Gabbs Project exploration program.

About P2 Gold Inc.

P2 is a mineral exploration and development company focused on advancing precious metals discoveries and acquisitions in the western United States and British Columbia.

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Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward Looking Information

This press release contains “forward-looking information” within the meaning of applicable securities laws that is intended to be covered by the safe harbours created by those laws. “Forward-looking information” includes statements that use forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “believe”, “continue”, “potential” or the negative thereof or other variations thereof or comparable terminology. Such forward-looking information includes, without limitation, information with respect to the Private Placement and the Company’s expectations, strategies and plans for the Gabbs Project including the Company’s planned expenditures and exploration activities.

Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made. Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking information. See “Risk Factors” in the Company’s annual information form dated October 21, 2020 filed on SEDAR at www.sedar.com for a discussion of these risks.

The Company cautions that there can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, investors should not place undue reliance on forward-looking information.

Except as required by law, the Company does not assume any obligation to release publicly any revisions to forward-looking information contained in this press release to reflect events or circumstances after the date hereof.