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There’s Gold in Them Thar Hills!!

There’s Gold in Them Thar Hills!!

PROVIDENCE GOLD MINES – Expanding the potential of a forgotten California mine

Providence has been busy exploring the 100%-optioned Providence group of historic mines in the Summerville Mining District, Tuolumne County, California. These past-producing mines lie within the eastern belt of the famous Mother Lode District about 180 km east of San Francisco.

Numerous high-grade past-producing Motherlode gold mines were discovered within this belt, including the Carson Hill Mine (3,000 feet deep that produced 1.3 million ounces of gold) and the Central Eureka Mine (4,855 feet deep which produced 1.8 million ounces of gold) to name just a couple.

In the case of the Providence deposit, the mine was opened in 1894 and shut down in 1907 during active and profitable operations. The owner was looking to sell the mine and did not extend the lease to the current operator at that time. The lower levels of the mine were then allowed to flood and were never re-opened.

The mine was sold in 1911 but the new company was under-funded and only mined above the water table before they ran out of money. Operations were shut down in 1917 due to World War I conditions. In 1918, a large brush fire destroyed the surface workings and the mill and most of the mining records.

From that point on, only a limited amount of work was completed on the mine. The patented claims were acquired by the current owner in 1964. An estimated 225,000 ounces of gold was reportedly recovered from 1894 to 1916. The patented claims were acquired by the current owner in 1964 and these patented claims are what Providence.

Gold Mines has optioned. They cover the historic Providence, Consuelo and Goodenough mines which consist of four high-grade gold-bearing quartz veins that are parallel to each other. We believe the mine still holds enormous high-grade gold potential at depth and along strike. That belief is based on the fact that only one of the major mineralized stopes was mined to 1,100 feet in depth.

The other ore shoots were only mined down from 100 to 200 feet. Typically, mines in the Motherlode district are historically very deep – in some cases more than 5,000 feet deep. Providence has been busy sampling, mapping and constructing road access for drill rigs to test the near-surface strike extension of the known past-producing vein systems. The Phase I drill program consisted of 13 core holes with 12 of the holes intersecting shallow vein structures along the Fairplay vein and Providence trend.

Initial assay results reported values ranging up to 4.95 g/t gold over a meter. Five of the drill holes intersected the Providence trend, extending the zone by 100 metres to the north. The drilling also intersected five near-surface anomalous, but previously unknown, gold vein targets. It’s worth noting that the gold hosted in these types of deposits is frequently very nuggety, which often skews drill results with high assays that are not representative samples.

Naturally, these results have not excited the market, but Providence was not targeting deep high-grade past-producing stopes but rather the extension of the vein system. Providence believes the high-grade stopes are structurally controlled and may be repeated along strike. This drill program successfully proved the potential along strike and provided the company with valuable structural information to better aim a second round of drill holes. The Phase II program, budgeted at $750,000, will include core drilling, sampling and geological modelling. Phase III would include de-watering and reclaiming the underground workings, rehabilitation of the inclined shaft and sampling underground workings with both channel sampling and underground drilling.

We believe a methodical approach to exploration will elicit the best results in the long run. Providence Gold Mines also recently appointed Brian Ray M.Sc., P.Geo., as Head of Exploration and Development. Ray played a key role in the discovery and the 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 where he was responsible for preparing the first mineral resource.

On an unexpected note, the company recently discovered what it believes is a historic stockpile at the exploration site. In conjunction with its next phase drill program, Providence intends to conduct a comprehensive testing program of the stockpiled material. It should be noted that mill recoveries over a century ago were very inefficient with maximum recoveries of only about 50%.

We feel that continued patience with Providence will be rewarded.

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Stew Vorberg and Doug Wood are Investment Advisors with Mackie Research Capital Corporation  (MRCC). This article was prepared, in part, under contract by Thomas Schuster. The opinions, estimates and projections herein are those of the authors and may not reflect that of MRCC. The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. The issuer(s) mentioned in this article may not be suitable for all investors. Please consult an investment professional for advice regarding your particular circumstance. Neither the author nor MRCC accepts liability whatsoever for any loss arising from any use of this article or its contents. Information may be available to MRCC which is not reflected herein. This article is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. The information contained in this article is not intended to constitute a research report. Stew Vorberg and Doug Wood are beneficial owners of the company highlighted in this article.


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