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Eskay Mining, P2 Gold explore merger

North of 60 Mining News – June 05, 2024

In the meantime, Joe Ovsenek-led P2 Gold will head the 2024 exploration at Eskay Mining's property in the heart of B.C.'s Golden Triangle.

In a deal that will see former Pretium Resources President and CEO Joe Ovsenek returning to British Columbia's Golden Triangle, Eskay Mining Corp. and P2 Gold Inc. have entered into a preliminary deal to merge the two gold-focused exploration companies.

Eskay Mining is exploring the Eskay-Corey (formerly Consolidated Eskay) project in Northern B.C. Covering a corridor of gold-rich volcanogenic massive sulfide (VMS) mineralization trending south from Skeena Resources Ltd.'s Eskay Creek gold-silver project and west of Seabridge Gold Corp.'s world-class KSM gold-silver-copper project, the 602.6-square-kilometer (232.6 square miles) Eskay-Corey lies at the very heart of the Golden Triangle.

Joseph Ovsenek

"The Eskay-Corey Property is the most prospective ground in the Golden Triangle without a major discovery to date," said Ovsenek, who is now president and CEO of P2 Gold.

P2 Gold is focused on Gabbs, an advance-staged project in Nevada that hosts 49.8 million metric tons of indicated resource averaging 0.45 grams per metric ton (720,000 ounces) gold, 1.36 g/t (2.2 million oz) silver, and 0.27% (297 million pounds) copper; plus 112.2 million metric tons of inferred resource averaging 0.35 g/t (2.29 million oz) gold, 0.84 g/t (3 million oz) silver, and 0.23% (567.1 million lb) copper.

In May, P2 Gold published the results of a preliminary economic assessment that outlines plans for a mine at Gabbs that is projected to generate an after-tax net present value (5% discount rate) of US$555 million and internal rate of return of 21% using base case metal prices of $1,950/oz gold, $25/oz silver, and $4.50/lb copper.

P2 Gold also owns BAM, a copper-gold exploration project in Northern B.C. about 100 kilometers (60 miles) north of Eskay-Corey.

The merging of these two companies is expected to strengthen management, provide better access to capital markets, and offer the seasonal optionality of year-round exploration in Nevada and Northern B.C.

"The addition of the Gabbs property in Nevada puts Eskay on a totally different level as resource explorer," said Eskay Mining President and CEO Mac Balkam.

Deal within a deal

Under a non-binding letter of intent signed on June 4, Eskay Mining would acquire P2 Gold in all-shares transaction that would result in Eskay shareholders owning 80% and P2 Gold shareholders owning the remaining 20% of the merged company.

Ovsenek would serve as president and CEO, and Balkam as chair of the consolidated company.

Eskay-Corey will be the initial focus of the merged company, and exploration that leverages the strengths of both companies is slated to begin before the merger is complete.

At the same time as entering into a preliminary agreement on the merger, the two companies signed a separate agreement for P2 Gold to plan and execute an exploration program at Eskay-Corey during the 2024 exploration season.

"With this transaction, Eskay has taken a significant step toward finding the next major resource in the Golden Triangle,' said Balkam. "The P2 team, led by Joe Ovsenek, is second to none in producing results in the area."

"We look forward to getting on the ground this summer and bringing our exploration and development experience in the Golden Triangle over the last 20 years to bear on Eskay-Corey," Ovsenek added.

The two companies plan to hammer out the details of a definitive agreement for the merger by the end of June and are currently expecting the transaction to be finalized by the end of October.

Author Bio

Shane Lasley, Publisher

Author photo

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.


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