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Providence Gold Mines Inc. (TSXV: PHD): Exploring and Developing a Past Producing Gold Mine in the “Mother Lode” District of California; Interview with Ron Coombes, President & CEO

on 6/10/2020
Providence Gold Mines Inc. (TSXV: PHD) The Property is located in the Summerville Mining District, Tuolumne County, California, upon the eastern belt of the “Mother Lode” District, consisting of 65 acres of fee simple land and 22 additional mining claims on US federal lands in the famous Motherlode mining districts.

We learned from Ron Coombes, President & CEO of Providence Gold Mines, that the project, acquired in 2017, is a former high-grade gold producer, shut down in the middle of a profitable operation, due to a dispute among owners, and has been abandoned for over one hundred years.

Most recently, the Company discovered stockpiles, of what were thought to be waste rock. Upon testing, the samples were found to contain significant amounts of gold.

Near term plans include the extraction of the waste rock and furtherance of a 3,900-meter exploration drilling program, on all of the six known mines, to identify unexplored mineralization zones.

Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing Ron Coombes, who is President/CEO of Providence Gold Mines Incorporated. Could you give our readers/investors an overview of Providence Gold Mines Inc. and also the Company’s historical background?

Ronald Coombes: Yes, the project is in a significant belt, called the Mother Lode Gold Belt, which is very famous in California. It has produced over 128 million ounces of gold to date. We acquired the property when gold was still not really in vogue like it is today. The property had been sitting for over a hundred years untouched. It was one of the more famous producers in the Mother Lode Belt, extremely famous for its high-grade and decent sized stopes.

We heard about the property and went down and examined it. We've heard the story so many times that, "This is a famous mine, blah, blah, blah." When we went down, we went down, not with rose-colored glasses, but to look at whether its potential was real or not? We brought a couple of geologists and a couple of engineers. We went through the underground on level 6. It has 12 levels in the main mine and it has numerous mines on the property. They were all high-grade producers, all shut down at the same time in 1916. Interestingly enough, everything burned to the ground in 1918, during a pandemic, as ironic is that is now, today in North America.

The project sat for over a hundred years until we went and we took a look at it and sampled the underground. One stope that we sampled, had a little over a meter of 46 grams of gold. That's not bad for a stope that's been mined out. We haven't gotten down to the two bottom levels they were in, when it shut down, because those lower levels are still required to be de-watered.

Anyway, it's a pretty famous property. We're pretty excited about it, so we acquired it. During the past three years, we systematically sampled it, scientifically, did proper surveys of the underground, did an airborne survey, so we would have correct information, so when we commence forward with our drilling program, we can actually hit the identified targets properly, because they're only three to four meters wide.

Dr. Allen Alper: Maybe you could tell our readers/investors a little bit about some of the other mines along this trend? How are they doing?

Ronald Coombes: The trend itself stretches from one end of California to the other. Of course, some of the more famous ones, in history, would have been the Empire, which is in Grass Valley. In the Sonora, California area, where our property is located, there are numerous mines around us that have produced in excess of a million ounces. Carson Hill, which is still operating as an aggregate mill, I have heard is still recovering gold out of their aggregate mine. I've heard there are some veins that are protruding the granitic body there, called the Calaveras. At times, I suspect they're making more money on the gold than they are on the aggregate. We're sitting in the middle of numerous gold producers, many of which had been shut down for a long time and don't have proper geology. It's a great area, untapped for future development of resources.

We have neighboring properties that are currently in production. Our property is one of the more famous properties in the area, from when it was in production. It produced some pretty significant numbers. The very first stope produced some 30,000 ounces at 15 ounces per ton. That's a pretty nice number. The one below it, the next stope, recovered 50,000 ounces.

Somebody told me a long time ago, "Where do you find gold?" Gold is where gold is. There's been lots of gold taken out of the ground on this property. We believe there's a lot more. These types of deposits are known to go down to great depths. The primary mine, which was mined on the property, was the Providence, it's been mined down to 1,200. There's lots of room for future development, down to the 3,000-foot level. There's still even lots of room between the stopes and along strike for new discoveries on the property.

Dr. Allen Alper: Sounds very good! Could you tell our readers/investors about the stockpile that you discovered?

Ronald Coombes: When we acquired the property, Al, it was quite interesting, in that there's an area referred to as the picnic area. We set up our camp on top of that and parked our vehicles there.

A little over a year ago, while we were in the middle of our verification and surface geo chem, et cetera, our geologist, a Ph.D. from the University of British Columbia, with whom we're working now, and whose expertise, we're very fortunate to have; was walking across the pile and he looked down and picked up a piece of quartz and there was a nice-sized nugget sitting in it. He brought it back and he said, "Are you guys aware of the fact that there's gold in this pile here?"

I wasn't there at the time, but I heard about it. He subsequently discovered and it appears right now that all of the milled material that's been milled down to the 1,200 level, is sitting dry stacked in this ravine. They would recover some 225,000 ounces. With the recovery rates in 1916, using a simple stamp mill and a pine sluice box, they probably didn't recover 50% of the gold. So there should be a significant volume of gold left in this milled material.

We're moving forward to do further work to determine a more accurate volume and grade, which is slated to be our next program on the property, probably starting in late August, the beginning of September, because the COVID-19 situation has stopped us from our work program.

Dr. Allen Alper: That sounds promising. Could you tell our readers/investors a little more about the property, and what information and data you have on it?

Ronald Coombes: When we first acquired the property, all we had was a historical longitudinal cross section, which showed where all the workings were, et cetera. So we brought our teams and we did an underground 3D terrestrial survey, which was able to then do a negative of the picture, which gave us a very comprehensive view of all of the fracturing. We could clearly see where they missed the zone. When they put the drift in in 1931, they were very close, but they didn't have the technology that we have today. So unfortunately for them, they missed the zone- and fortunately for us, we know where it sits.

That's a part of our next planned drill program. We're planning a 3,900-meter program from surface on all of the targets, the six known mines that are there, to drill between and beneath all of those known zones. And hopefully move forward with a resource. Those are the plans for the immediate future.

A little bit more about the history of the property- We were very fortunate to pick up this property. It was owned by the same family since the early 1960s. They had plans to develop it. The fellow that is in charge of the estate, Mr. Ellis, is a prominent lawyer in the state of California. His father was a very prominent oil engineer. I believe he told me he worked for Aramco. He traveled the world when they were first starting to develop offshore oil rigs. He was one of the people that pioneered the development of that technology. He passed away, unfortunately, before he ever got to realize his dream of looking at the Providence and seeing whether or not he could develop it to once again be one of the more famous gold producers in the Mother Lode Belt.

We were fortunate enough that we were at the right place at the right time. And we made the acquisition through an option agreement with the Ellis estate. They've been excellent people to work with. All that Mr. Richard Ellis is really hopeful for is that he can prove his father right, in that his father's thought that this property was very significant as a gold property. We believe he was right, from what we can see so far to date. Our data supports that. There's enough room along strike, within these known zones, for the development, potentially, of one to probably four million ounces of gold. Of course, we won't know until we've drilled, but the chances are pretty good because they've already developed stopes and mined them on the six known deposits that are on the property.

It's a pretty good opportunity. The timing's perfect. It looks like we're entering into a significant bull market. This COVID-19 has been disastrous for most industries, but I think it's more than likely going to push what was already inevitable. We were moving into a gold cycle that's probably going to turn the gold markets into a very big financial instrument once again.

Dr. Allen Alper: Well, that sounds very good. Could you tell our readers/investors a little bit about the permitting situation in California, and how it applies to Providence Gold Mines?

Ronald Coombes: Al, I'm really pleased that you asked that question because it was one of our concerns when we first looked at it, as to whether or not we wanted to get involved in California. We were told that California is a horrible place. The regulators are horrible, blah, blah, blah.

Well, we actually met with the SEC at the Water Board, when we first picked up the property, because we are very conscious of EPA issues. We did some water sampling and generally some surface sampling to see what we were dealing with, from a mineralogy perspective; whether or not we had a lot of arsenopyrite present, pyrite present, or any other kinds of minerals that may be deleterious to the project's future. We couldn't find any.

It still doesn't forgive us from a proper permitting process, with regards to water permitting, et cetera, et cetera. We still have to go through that; it's a rigorous permitting, with regards to water discharge, et cetera.

But those rules and laws are the same laws that you have to abide by in Arizona and Nevada. From what we can see, we're not going to have any difficulties because there doesn't appear to be any deleterious minerals present on the property.

We don't see any signs of any ARD issues, calcium carbonate, from what we could see. We tested with an XRF gun, and we were getting 4% to 10% on calcium carbonate.

On permitting, the shocker is that I've found California, so far to date, to be the best jurisdiction I've ever worked in.

I worked in Canada for almost 20 years. With all of the Aboriginal problems, and the provincial government not homogenizing with the federal government, you have two tiers of regulations going on. It was actually a breath of fresh air working in California.

The people are proactive for mining. Another statement that is incorrect is, "Everybody in California doesn't want mining." Well, I think they should take a trip out of Los Angeles and go into them there hills where the gold is. I think you'll see a culture there that is still very amicably happy to see the mining community.

Of course they want sound methodologies with regards to the processing, et cetera. And we can deliver those. We can deliver everything that they require to work in harmony with the community, create wealth for both the government, the employees, the Company, the shareholders.

I think California is a great place to work.

Dr. Allen Alper: Well, it sounds very good. From what I understand, some of the advantages Providence Gold Mines has is that you are a grandfathered producer. Also, you're sitting in a mining-friendly district.

Ronald Coombes: Yeah. Thank you for raising that. Because Al, actually there was something I did forget to include with regards to the regulations. This mining property is all within patented ground. So it's actually owned; the land is actually owned. It really changes the process significantly in not having to deal with forestry or BLM

Dr. Allen Alper: Sounds good! Could you tell our readers/investors a little bit about your background, and the team?

Ronald Coombes: I've been in the business for over 20 years now. I have very significant funding experience. It's all about the team. We've assembled a great team.

Brian Ray is our VP of exploration and he's been responsible for the development of some pretty significant deposits worldwide. The last two would have been in Nicaragua. He was the one that designed the modeling, et cetera. They drilled a two-million ounce deposit off there recently.

Before that, I guess another one of his claims to fame would have been the eleven and half-million deposit that Miramar had developed. So he has the experience. He's a very good geologist and an expert at modeling. We're very pleased to have Brian with us. He's the VP of exploration, and looks after all of the technical aspects of the project.

He works as well with our strategic advisor, Professor Lee Groat from the University of British Columbia. We are very pleased to have the University working with us. They're actually helping us on the mineralogy and understanding of the genesis of how the gold was formed, et cetera.

They have a lot of experience in a lot of areas that we can utilize. It's such a real pleasure working with the University of BC, in particular with Professor Lee Groat, Professor of Earth Sciences.

We also have a few other experts that we work with on our surveys. We've always used Aero Geoquest. They have some state-of-the-art equipment that they're using to help the development of proper survey control, et cetera.

We as well have been working with a number of other sources, with regards to looking at what it's going to take to process the stockpile if we continue to show success.

I think the next program that we plan to auger drill at depth, within the stockpile area itself, will give us a better understanding of the volume and grade.

We have Rodger on our Board, Mr. Rodger Young, who lives on the island of Jersey.

Rodger has been a fund manager, and worked in the industry for a great number of years. He's I believe semi-retired. He's worked with us with the Providence Gold Mine, so he's re-entered the arena once again here at the junior level. Because he thinks that the project has serious merit, and he'd love to be part of it. We're very proud to have Rodger with us.

We have Scott Davis, who is our CFO. He looks after all of our financials, et cetera. Then we have Tom Kennedy, who was a lawyer as well. Tom's been in the business for a long time, too. It's a pleasure having Scott and Tom with us.

I've been in the business. I've developed and drilled off a couple of deposits. The Storie deposit in northern British Columbia. We put 139 holes in the ground and developed a significant asset that was NI 43-101 compliant.

We had five drills, six drills spinning 24/7 while on that project. That stock moved from 15 cents to almost $3 on millions of shares, within a 12-month period.

If you have the right project, the right team, and the right metal, you're in the middle of a perfect storm. Which is what I believe we're developing right now, a perfect storm, in a gold market, with a project that's sitting in North America, and geopolitically safe.

I really do worry for some of these projects that are in third world countries right now, because of everything that's going on around us. I think lots is still going on.

It's nice to have a project in a stable United States of America, in a belt that has produced a significant amount of gold; 130 million ounces, approximately, is pretty significant. There's probably another 130 million ounces sitting in the ground.

Dr. Allen Alper: Well, that sounds excellent. Sounds like you have a very good, strong core team there, and you have a lot of potential, and you're in a great location.

Could you tell our readers/investors where your stock is listed, et cetera?

Ronald Coombes: Yeah. That's another thing we've done. We've currently have approximately 36 million, issued and 62 million issued and outstanding. So we have a very good share structure

We're listed both on the TSX Venture Exchange and on the OTC in the U.S. We are planning to move forward with the full listing in the United States. This is a U.S. project, and we should have a bigger presence in the United States, as far as we're concerned.

Dr. Allen Alper: Sounds very good! Could you summarize for our readers/investors, and highlight the primary reasons why they should consider investing in Providence Gold Mines?

Ronald Coombes: Absolutely. So why should somebody consider an investment in Providence Gold Mines? It's really quite simple. It's all about risk and reward.

We've de-risked the property significantly. We have a drill program plan. It's an ex-producer; it's produced significant grades in the past. We believe it's going to produce significant grades in the future.

Projects like this are few and far between. Given the past, and then given the present; when I talk about the present, so far to date, the work that we've accomplished on the property certainly indicates that there's enormous potential, within the known zones and along strike, within the property boundaries, to basically develop a very significant deposit.

The stockpile is potentially a serious bonus here. We weren't expecting it when we picked the property up. We were quite surprised, to date, with the grades that we've been able to recover with our assays, with the trenching we've completed so far.

So why should somebody invest? Well, you're in a financial market right now, where I believe gold is going to be king again. It's already on its way. You're looking at a material that's sought after. You're looking at a project, sitting in a geopolitically safe place.

You're looking at a location where people are mining-friendly, 35 minutes away from us, from the town, which means if you do develop a mine, you're not spending additional significant amounts of money on camp, et cetera, et cetera.

It's actually a well-rounded property that could deliver a significant upside to shareholders that are invested in it. I think that time will tell, but I believe that the property is going to be a winner.

Dr. Allen Alper: Sounds like very strong reasons for our readers/investors to consider investing in Providence Gold Mines! Is there anything else you'd like to add?

Ronald Coombes: Well, the only other thing I would add to that is that everybody that's been on the property, every professional that's been on the property; mining engineer, research analyst, all agree. I'm looking forward to getting you on the property, Al, at some time in the future here.

Dr. Allen Alper: That sounds great!

Ronald Coombes: Because it's worth a thousand words. Once you're on the property and you take a look around and you realize what was developed previously, then it becomes quite apparent what's probably still there.

Dr. Allen Alper: That's great! Very interesting! We’ll publish your press releases as they come out so our readers/investors can follow your progress.

Dr Allen M Alper has recently become a Strategic Committee Advisor for Providence Gold.

Ronald Coombes, President & CEO
Mobile: 1- 604- 724-2369

Read New Company's Press Release: Gold in Stockpile Update

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