Eskay Mining and P2 Gold Agree to merge

Under the terms of the Letter Agreement, each outstanding common share in the capital of P2 on a diluted basis, as described below, will be exchanged for 0.2778 of a common share in the capital of Eskay, subject to customary adjustment (the “Exchange Ratio”). Upon completion of the Proposed Transaction, existing Eskay shareholders are expected to own approximately 80% of the combined company resulting from the Proposed Transaction (the “Combined Company”) and P2 shareholders are expected to own approximately 20% of the Combined Company.

The Letter Agreement provides for the parties to enter into a definitive arrangement agreement setting out the final terms and conditions of the Proposed Transaction.

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

“The Eskay-Corey Property is the most prospective ground in the Golden Triangle without a major discovery to date,” added Joe Ovsenek, President and CEO of P2. “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. In Nevada, we plan to move forward with additional metallurgy as the first step in advancing Gabbs to production.”