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An Untouched Stockpile in California’s Mother Lode of Gold

Stockhouse Editorial
0 Comments| June 4, 2020

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(Image via Providence Gold Mines.)

“Gold is where gold is ….”

A top geologist once said those wise words to Ronald Allan Coombes, the President, CEO and Director of Providence GoldClick to enlarge Mines Inc. (TSX-V: PHD, OTC: PRRVF, Forum), and he’s applied that mantra to every project he’s been involved with since, but it has likely never been more true until now ….

Located in California’s Summerville Mining District in Tuolumne County, the Providence Group of Mines operates within the eastern belt of the “Mother Lode” District. The Mother Lode belt is home to a number of well-known mines that are rich in production, from where many millions of ounces of gold have been claimed.

Three miles east of the town of Tuolumne and 12 miles east of Sonora, via a good all-weather road, the Providence Group of Mines may just be sitting on a massive gold resource that has been left untouched for more than a century.

What this Company is out to accomplish couldn’t have happened at a better time. General reports from the Mother Lode district indicate that the mineralization generally increases in value with depth. Markets are changing rapidly due to the economic fallout from the COVID-19 coronavirus and anyone who has holdings in gold, given the rising trajectory of this commodity’s value, should do well in the near future.

Providence can expect impressive gains in its share price within the next 12 months if timing pays off, as it would appear that given current conditions of its projects and the market at large, they are working right in the eye of the storm.


Gold stockpile untouched in over a century:

The Mother Lode can be thought of like sitting in a cherry tree when all the cherries are ripe for the picking. The district had supplied operators roughly 128 million ounces of gold to date.

The Providence Group of Mines has a long history dating back 125 years when it opened. Operations were shut down in 1916 due to a fire, but at that time mining efforts yielded a probable recovery rate of up to 50%. Mining was executed through mechanical means on this property - no chemical processing was involved. The project was acquired by PHD in 2017.

Significant results were returned from trenching samples, producing minerals devoid of sulfides, essentially “free gold”. There were also no water quality issues noted, which would mitigate punitive enforcement from the Environmental Protection Agency. The Providence team did its homework on the neighborhood to find out how mining friendly it is.

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.




(Image via Providence Gold Mines.)


When Providence first heard that the original owners had mined significant grades of gold the first stope reported 30,000 at multiple ounces per ton they knew they might have something special on their hands. Further geological testing of the stockpile of waste rock found on the project unveiled significant gold potential. The Company is now planning to dig deeper and get a more accurate assessment of the size and grade found within this pile.

These mining and milling operations will take place on patented ground, which includes both surface and water rights, which means the Company is not dealing with the government from BLM or forestry. The Company will be following any regulatory requirements for mechanically re-processing the pile. Awaiting a depth profile, investors should be aware that this stock could jump after the release of this news.


Mineralization and development:

Looking at the veins stretching through the Providence Mines, one can see that they are in black slates that lie parallel with each other at roughly 45-degree angles, dipping in an eastern direction. The strike of the veins runs from south-east to north-west and the formation contains intermediate porphyry dykes and limestone.

Alongside these contacts, mineralized bodies have been frequently located, as they form high-grade shoots at various distances across the veins. These shoots of mineralization have been opened at various levels of the mine, where a large amount of ore has been extracted.

Under hsitorical development of the project, a double compartment shaft was sunk along the dip of the vein to a depth of 448 metres (1,470 ft.). A total of 12 drifts were run from the north and south of the shaft on 12 different levels, which lands roughly 426 metres from the mouth of the shaft. Crosscuts were run east to west from different levels to develop and capitalize on mineralized shoots found in parallel veins, some of which have been stopped out, while in others the mineralization is still reported to remain in place.

The metallurgy here is good and this is a strong indication that there is more gold still to be found, as the depth of mineralization and along the strike remain unknown.

For a deeper look at a 3D map of the project, watch this video:

Providence2017Dec21 from Adnet Communications Inc. on Vimeo.


Modern scanning technology:

Providence Gold Mines is utilizing cutting-edge exploration technology to advance this historic property. It is quite distinct tech and not yet widely used in the mining industry. As CEO Coombes described it, the Company is able to see a negative image on holes where every nook, cranny and fracture is exposed, making overall work on the project just that much more precise. This technology is believed to have as much impact on the mining industry as geophysics.



(Image via Providence Gold Mines.)

Thus far, the team has been able to stick to within 2 cm of a mile-long survey control. A precision airborne survey was also completed on the surface of the project together the surveys were used for their planned drill program of 3,900 metres designed to drill both beneath and between the property’s mineralized shoots. This ability of the underground 3D when first completed had been relatively unheard of in the industry and is a major advantage for this drill program, offering a decade’s worth of geological data in just weeks, while also being less expensive than traditional methods to model and design a drill program.

Private placement:

In May 2020; Providence closed the first tranche of its $500,000 private placement. The funds from this raise will go toward developing the potential resource in its stockpile. With its advanced data, the Company’s leadership wants to be able to determine the amount of volume and weighted average of the grade of gold. Since the grade would likely vary, a “nugget effect” is expected because of the type of deposit. This is all milled material, likely from 1894 to 1916. The first and second stopes were extremely rich.


Well-rounded leadership team:

The experienced team at the helm of Providence Gold Mines comes from a wide range of backgrounds with a deep level of knowledge.

President & CEO – Ronald Allan Coombes had been involved in management of public companies and specialized in mineral exploration for over 20 years and has raised significant funding in North America and internationally for various projects. With the Storie molybdenum deposit near Cassiar in northern British Columbia, where 139 holes were drilled and the market cap shot up in a mere 12 months.

Vice President, Chairman - Rodger Young was the past President of a Natural resource fund, based in Toronto with NAV in excess of $4.6 billion (CAD).

Head of Exploration - Bryan Ray PGeo has more than 38 years of global exploration experience, including over 20 years as a consulting geologist, where he was key in the discovery and advancement of several deposits including Hope Bay (12.3 million ounces) gold deposit in the Nunavut, Canada, and the Toruparu gold deposit in Western Guyana.

Chief Financial Officer - Scott Davis is a chartered professional accountant and had been involved for full-service accounting and management services for private and publicly listed mining companies over the past decade.

Advisor – Lee Groat is a professor of Earth Science at the University of British Columbia. In 2009, the new mineral groatite, NaCaMn2+2(PO4)[PO3(OH)]2, was named in his honour. Professor Groat is a Past-President of the Mineralogical Association of Canada. In 2019 he was awarded the Leonard G. Berry Medal for distinguished service to the Mineralogical Association of Canada. CEO Coombes called him “A health of info on worldwide deposits” and added that they both agree that the Providence property is a potential multimillion oz gold deposit.

He is joined on the Strategic Advisory Committee by Dr Allen Alper.

Opportunity frozen in the passage of time:

Looking to the near-term horizon for the Company, CEO Coombes stated that the immediate operational goal is to further develop the stockpile, rather than advance production. This is due to how the spread of the coronavirus has forced the hands of many businesses to shift their priorities, but it hasn’t meant that Providence has had to grind to a halt, if anything it has only proven the value of its resource even further. This timeline is a projection subject to the present COVID-19 pandemic.

The timing of the physical work at the property is also subject to both actual weather at the time and the type of work required. There could be nice weather to help the Company's operation, but like all things, that depends on the weather forecast, which won't be known for sure until it happens.


Timeline:

  • Late July - August - Leadership is planning to get back to the site
  • August 2020 - The strategy is to get a proper profile by sampling to determine how long a grind is needed to get the best recovery
  • Late Summer 2020 - Results would be expected back in around five weeks, with a report slated two to three weeks after that
  • October 2020 - A technical report on the stockpile with potential inferred resource is anticipated by this time and the Company can move on from there

There is a bull market coming like none of us have ever seen before:

Click to enlargeThe deposit that Providence Gold Mines has on its hands could be a significant money maker. Once property development underway, Company could be turning out significant cash flow every 30 weeks.

If this stockpile proves to be just what Providence’s leadership believes it to be, the Company has hit a home run without even drilling any holes … that does not happen often in this industry.

The grades on this deposit are so high, the Company could not ignore it. While many other operators pay money to produce gold off its tailings, this Company is looking to make money off its gold, rather than pay to produce it.

If this stockpile does not work out, the hard rock is still there – six deposits that have all proven to have significant gold potential and now the Company just needs to determine exactly where that gold is. Instead of a grassroots project that has never produced anything, Providence has ownership of several mines on a property that has historically produced many oz per ton, and it is safe to think it can produce more. Investors should keep track of Providence Gold Mines Inc. to see what develops.



FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.



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