P2 Gold Leases Lost Cabin Property in South Central Oregon

VANCOUVER, British Columbia, Sept. 10, 2020 (GLOBE NEWSWIRE) -- P2 Gold Inc. (“P2” or the “Company”) (TSX-V:PGLD) reports that, subject to regulatory approval, it has signed a mineral lease and option agreement with La Cuesta International, Inc. (“La Cuesta”), an arm’s length private company, to lease a 100% interest in the Lost Cabin Property located in south central Oregon.

Lost Cabin

The Lost Cabin Property consists of 106 unpatented lode mining claims that cover an area of over 2,190 acres, located in Lake County, Oregon.  The property is located along a major-northwest-trending structural lineament and hydrothermal alteration associated with silicic volcanism.

The principals of La Cuesta are Perry Durning and Frank (Bud) Hillemeyer, who received the PDAC Thayer Lindsley International Mineral Discoveries Award in 2010.

La Cuesta has permitted 18 well-located drill sites at Lost Cabin with the U.S. Bureau of Land Management.  The Company plans to further refine the drill targets by initiating a systematic exploration program consisting of airborne and ground geophysical studies, further prospecting as well as additional geochemical sampling and geologic mapping.

Mineral Lease and Option Agreement Terms

Under the terms of the mineral lease and option agreement, the Company has the right to use the property for exploration and mining for a minimum of 50 years provided it continues to make the following preproduction payments:  US$5,000 and 100,000 common shares in the capital of the Company on signing the agreement (the “Effective Date”); US$5,000 six-months after the Effective Date; US$10,000 12-months after the Effective Date; US$10,000 18-months after the Effective Date; US$15,000 24-months after the Effective Date; US$20,000 30-months after the Effective Date and every six months thereafter.  The term of the agreement may continue after 50 years provided active mining operations are being conducted on the property. The Company is also required to incur minimum work expenditures on the property of US$30,000 in the first year and a minimum of 2,000 meters of drilling in the second year.

On achievement of production on the property, a production royalty of 2% of net smelter returns is payable on claims owned by La Cuesta and 0.5% of net smelter returns is payable on third party claims and claims acquired within an area of influence, provided that a minimum production royalty of US$25,000 is payable quarterly.  On payment to La Cuesta of US$10,000,000 in any combination of pre-production payments, production royalties and minimum royalties, the production royalty on claims owned by La Cuesta reduces to 1% and on third-party claims and claims acquired within the area of influence to 0.25%.