P2 Gold Inc. (TSX-V:PGLD) (OTCQB:PGLDF) reports that it intends to increase the size of its non-brokered private placement of flow-through units and non-flow-through units (together, the FT Offering and NFT Offering are the “Private Placement”), previously announced on April 5, 2023, and that it has closed the first tranche of the Private Placement consisting of 6,397,000 flow-through units in the capital of the Company at a price of $0.32 per FT Unit for gross proceeds of approximately $2.05 million and 2,826,295 non-flow-through units at a price of $0.27 per NFT Unit for gross proceeds of approximately $0.76 million.

Flow-Through Offering

The FT Offering will now consist of up to 11 million FT Units at a price of $0.32 per FT Unit for gross proceeds of up to approximately $3.5 million.

Each FT Unit will consist of one flow-through common share in the capital of the Company  and one non-flow-through common share purchase warrant. The FT Shares will qualify as “flow-through shares” for purposes of the Income Tax Act (Canada). Each FT Warrant will entitle the holder to purchase one additional non-flow-through common share in the capital of the Company at an exercise price of $0.40 per common share for a period of two years from the date of issue, 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 is equal to or greater than $0.80 for a period of 10 consecutive trading days at any time prior to the FT Expiry Time, the Company will have the right to accelerate the FT Expiry Time by giving notice to the holders of the FT Warrants by news release or other form of notice permitted by the certificate representing the FT Warrants that the FT 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 gross proceeds of the FT Offering will be used to fund exploration expenditures on the BAM Project and other Canadian Exploration Expenses that will qualify as “flow-through critical mineral mining expenditures” as defined in subsection 127(9) of the Income Tax Act (Canada), and “BC flow-through mining expenditures”, as defined in the Income Tax Act (British Columbia).

Non-Flow-Through Offering

The NFT Offering will now consist of up to 6 million NFT Units at a price of $0.27 per NFT Unit for gross proceeds of up to approximately $1.5 million.

Each NFT Unit will consist of one non-flow-through common share in the capital of the Company and one non-flow-through common share purchase warrant. Each NFT Warrant will entitle the holder to purchase one additional non-flow-through common share in the capital of the Company at an exercise price of $0.40 per common share for a period of two years from the date of issue (the “NFT 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 Exchange is equal to or greater than $0.80 for a period of 10 consecutive trading days at any time prior to the NFT Expiry Time, the Company will have the right to accelerate the NFT Expiry Time by giving notice to the holders of the NFT Warrants by news release or other form of notice permitted by the certificate representing the NFT Warrants that the NFT 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 proceeds of the NFT Offering will be used to fund exploration and engineering expenditures and for general corporate purposes.

Private Placement

All securities issued pursuant to the First Tranche will be subject to a four-month hold period expiring on September 5, 2023. In connection with the First Tranche, the Company paid finder’s fees of an aggregate of $81,602 and issued an aggregate of 262,507 warrants to arm’s length finders, representing 6% of the proceeds raised from subscriptions by, and 6% of the Units issued to, certain placees. The securities offered pursuant to the Private Placement 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.

Insiders of the Company subscribed for 900,000 NFT Units of the First Tranche. The issuance of NFT 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 relied on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(a) and 5.7(1)(a) of Multilateral Instrument 61-101 on the basis that the participation in the NFT Offering by the insiders did not exceed 25% of the fair market value of the company’s market capitalization.

About P2 Gold Inc.

P2 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.