P2 Gold Announces Closing of Private Placement and Acquisition of Gabbs Project, Nevada

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

VANCOUVER, British Columbia, May 17, 2021 (GLOBE NEWSWIRE) --  P2 Gold Inc. (“P2” or the “Company”) (TSX-V:PGLD) reports it has closed the non-brokered private placement (the “Private Placement”) (see P2’s news release dated April 6, 2021) for gross proceeds of $5.949 million and the acquisition of all of the assets that comprise the Gabbs Project (see P2’s news releases dated February 23, 2021 and May 5, 2021) located on the Walker-Lane Trend in the Fairplay Mining District of Nye County, Nevada (the “Transaction”) pursuant to an asset purchase agreement dated February 22, 2021, as amended by an amendment dated May 4, 2021 (the “Purchase Agreement”) among the Company, P2 Gabbs Inc. (a wholly-owned subsidiary of the Company) and Borealis Mining Company, LLC (“Borealis”).

Gabbs Project

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 (“P2 Shares”) 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. With the completion of the Transaction and the Private Placement, Waterton owns approximately 27% of the issued and outstanding shares of the Company.

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.