TSX-V-listed Eskay Mining has entered into a nonbinding letter of intent to acquire fellow junior P2 Gold in a business combination transaction to create a gold and copper explorer focused on the Golden Triangle of British Columbia and Nevada.
The combined company will be managed by the team that discovered and developed the Brucejack mine, in the Golden Triangle. P2 Gold president and CEO Joe Ovsenek will take on the same role at the combined company and Eskay president and CEO Mac Balkam will become chairperson.
“With this transaction, Eskay has taken a significant step toward finding the next major resource in the Golden Triangle. The P2 team, led by Joe Ovsenek, is second to none in producing results in the area,” said Balkam.
The Eskay-Corey project is the most prospective ground in the Golden Triangle without a major discovery to date, said Ovsenek in a statement.
“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,” he said.
Eskay-Corey has been shown to host several volcanogenic massive sulphide (VMS) targets and has the potential to host nickel/copper massive sulphide and several occurrences of vein-style mineralisation. Main VMS target areas on the property include the SIB-Lulu, TV-Jeff, C10, GFJ, and Spearhead zones.
As for Nevada, where P2 owns the Gabbs project, Ovsenek said that the combined company planned to move forward with additional metallurgy as the first step in advancing the project to production.
Gabbs is a preliminary economic assessment- (PEA-) stage gold and copper asset. The PEA has outlined a long-life, midsize mine at Gabbs with average yearly production of 104 000 oz of gold and 13 500 t of copper over a 14.2-year mine life.
Eskay's stock rose 17% to C$0.40 apiece, while P2's stock fell by 10% to C$0.10 a share on Wednesday.