04:35 PM EST, 03/05/2024 (MT Newswires) -- P2 Gold Inc. ( PGLDF ) reported Tuesday that it has closed the agreement to settle the outstanding debt related to the acquisition of the Gabbs Project and the first tranche of the concurrent non-brokered private placement of convertible debenture units for $1.3 million.

In settling the debt, P2 entered into a termination agreement with Waterton Nevada Splitter, LLC, an affiliate of Waterton Precious Metals Fund II Cayman, LP pursuant to which P2 will issue or pay to Splitter US$1 million and 5.2 million common shares in the capital of the company at closing at a deemed price of $0.07 per share, US$125,000 on or before Jan. 31, 2025, and US$125,000 on or before Jan. 31, 2026.

Splitter currently has beneficial ownership of, and control or direction over, 23.5 million shares of the company, representing approximately 19.9% of the issued and outstanding shares.

In connection with the acquisition of the Gabbs Project, P2 granted to Waterton a 2% net smelter returns royalty on production from the Gabbs Project, of which one percent may be repurchased at any time by P2 Gold ( PGLDF ) for US$1.5 million and the remaining one percent of which may be repurchased for US$5 million. Waterton assigned its rights to the Royalty to Franco-Nevada Corporation in June of 2023.

The company expects to issue up to 1,700 Units at a price of $1,000 per Unit. Each Unit will consist of one convertible debenture with a principal amount of $1,000 and 12,500 share purchase warrants.

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