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Jeff Clark – “P2 Gold (PGLDF; V.PGLD) new PEA increases Gabbs to 104,000 ounces/gold and 13,500 tonnes/copper annually over 14.2 years.”

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Jeff Clark – “P2 Gold (PGLDF; V.PGLD) new PEA increases Gabbs to 104,000 ounces/gold and 13,500 tonnes/copper annually over 14.2 years.”






Management had an updated Preliminary Economic Assessment (PEA) done on the Gabbs Gold-Copper project, located on the Walker-Lane Trend in Nevada.

This is a distinct improvement over the PEA done last September:


  • After-tax net present value at a 5% discount rate is now US$949.2M and an internal rate of return of 33.5% at $2,414/oz gold, $31.48/oz silver and US$4.71/lb copper.
  • Total projected life-of-mine post-tax cash flow of US$1.7 billion at spot metal prices over a 14.2-year mine life.
  • Total projected LOM revenue of US$5.4 billion at spot metals prices.
  • LOM production of 1.471 million ounces of gold, 2.058 million ounces of silver, and 190,000 tonnes of copper.
  • Estimated pre-production capital cost, including contingencies, of US$365.5M with payback of 1.7 years at spot metals prices.



CEO Joe Ovsenek sums up nicely what this updated PEA does for Gabbs and what’s next and the potential that still exists. “We have increased the production profile for Gabbs to nine million tonnes per year while still maintaining a healthy mine life of over 14 years. Life-of-Mine production at Gabbs is now expected to be over 1.4 million ounces of gold and 190 thousand tonnes of copper.


The 2024 PEA contemplates heap leach processing at nine million tonnes per year as the first phase of operations for the initial five years to reduce upfront capital requirements and project risks. In year six, operations will switch to concurrent heap leach processing at four million tonnes per year and mill processing at five million tonnes per year. Heap leach operations will pay for preproduction capital and a significant portion of mill capital prior to the commencement of mill processing in year six. The next steps are to optimize metallurgical recoveries (as metal leaching was continuing when column tests were stopped due to time constraints), renew water well permits and file a mining plan of operations. What’s more, Gabbs has considerable Mineral Resource expansion potential for both oxides and sulphides, which is why we expect Gabbs to be a long-life gold and copper mine.”



I asked Joe to clarify a couple points, here’s what he told me:

  • “With this PEA we focused on increasing the gold and copper production so we will have a more substantial mine. Average annual production is 104k ounces of gold for 14.2 years. We lose a little IRR, but significantly increase our NPV. We will also produce roughly the same amount of copper as a gold equivalent. So combined, depending on relative metal prices, we will produce 175k-195k gold equivalent per year.”



As with all PEAs, it is preliminary in nature, but you can see that Gabbs is growing into a nice medium sized project. And becoming more attractive to a major who will need gold and copper production.



Additional metallurgical test work is next to refine recoveries for both the oxide and sulphide material. Then feasibility-level studies and an evaluation of contract mining versus an owner fleet, mine plan optimization and equipment alternatives. The company will likely have to raise money to do these things so we’ll watch for that.

The stock is up 130% since February 29 when the gold market ignited. But it’s still offering strong value at current levels; it would have to 5x from here to match its 2022 high. That’s not just possible but probable, as the gold bull market continues and Gabbs shows majors it is a feasible mine. I am maintaining my position.


Courtesy of the Gold Advisor


Posted May 25, 2024

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