P2 Gold Inc. (TSX-V:PGLD) (OTCQB:PGLDF) reports that, following the approval of the TSX Venture Exchange, it has closed the restructuring of the outstanding payment terms for the acquisition of the Gabbs Project located on the Walker-Lane Trend in the Fairplay Mining District of Nye County, Nevada. (See the Company’s news release dated March 6, 2023 announcing the restructuring of the outstanding payment terms for the acquisition of the Gabbs Project).

In closing the restructuring, the Company issued 2,659,748 shares in the capital of the Company to Waterton Nevada Splitter, LLC, an affiliate of Waterton Precious Metals Fund II Cayman, LP.

As part of the restructuring, the Company entered into an amending agreement  with Waterton pursuant to which the Company issued the Shares and agreed to pay to Waterton (a) US$150,000 on or before December 31, 2023, (b) US$250,000 on or before December 31, 2024, (c) US$2 million on or before December 31, 2025 and (d) US$2.4 million on or before December 31, 2026. The Amending Agreement also contemplates, (x) if the Company raises, through the issuance of debt or equity, in excess of C$7.5 million (excluding flow-through funds), 10% of the funds raised will be paid to Waterton against the longest dated milestone payment and (y) on the sale of an interest in, or of, Gabbs, the proceeds will be paid to Waterton up to the amount outstanding at the time.

Also as part of the restructuring, the Company issued to Waterton a US$4,000,000, zero coupon convertible note, which has been approved by the Exchange as part of the restructuring. The Note has a four-year term and is convertible at a price of C$0.30 per share provided that the Note cannot be converted if all payments due under the Amending Agreement have been made at the time the Note is called (other than if a change of control is to occur prior to repayment of the Note). The Note can be called at any time on payment of 115% in the first year, 130% in the second year and 150% thereafter and is due on maturity, an event of default or a change of control. Also, under the Note, approval by the shareholders of the Company is required if conversion of the Note would make Waterton a Control Person (as defined in the Exchange’s Corporate Finance Manual).

All securities issued to Waterton are subject to a four-month hold period expiring July 22, 2023. The securities issued to Waterton have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act.

Waterton is an insider of the Company. The issuance of the Shares and Note to Waterton is considered a related party transaction subject to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The Company relied on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(g) and 5.7(1)(e) of Multilateral Instrument 61-101 on the basis that the restructuring transaction is intended to improve the Company’s financial position.

About P2 Gold Inc.

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