Oregon Gold Explorer Delivers New Assay Results | Provenance Gold CEO Interview
Summary
Company Overview: Provenance Gold, listed as P AU on the CSE in Canada, is focused on gold exploration in Oregon, with a market cap of $23 million and trading below its moving averages.
Drilling Results: Recent drilling results have led to a revised geological model, indicating a larger bulk tonnage potential with modestly dipping zones rather than steeply dipping ones, potentially increasing the total ounces in the system.
Geological Insights: The new model suggests a geothermal cell-like structure with feeder zones, expanding the exploration potential across the diorite body, which may lead to significant economic resources.
Market Reaction: Initial market reaction to the drilling results was negative due to unmet expectations for high-grade findings, but knowledgeable investors see long-term potential in the bulk tonnage model.
Economic Viability: The project's economics are promising, with potential for low-cost recovery methods similar to Nevada's open-pit mines, making even half-gram grades attractive.
Regulatory Environment: Eastern Oregon is supportive of mining, with permitting processes in place and no prohibitions on using cyanide for gold recovery, aligning with Nevada's operational standards.
Future Plans: Provenance Gold plans to continue drilling to expand the resource, with a focus on confirming the new model and exploring additional feeder zones, while also preparing for metallurgical testing and potential financing options.
Investment Considerations: Investors are advised to approach with caution, understanding the speculative nature of junior mining and the inherent risks involved, as highlighted by extensive disclaimers in the podcast.
Transcript
Today on a CEO barbecue, we're looking for gold in Oregon together with Providence Gold. If you want a bullet point summary of this conversation and all the other CEO barbecues in your inbox once a week, go to resourcealks.com and subscribe to our free newsletter. Now, the company you're about to hear from has paid us for the production of this video, which means that this is not research. It's an advertisement and you should treat it as such. Research is conducted by reading the company's official filings which you can find on setterplus.ca. And please only watch this if you absolutely know what you're doing. This interview is intended only for experienced junior mining speculators because mineral exploration development and mining is a very tough business where failure is the norm and should be the expectation. This is going to be a conversation that is general and impersonal in nature containing forwardlooking statements. I am not a licensed financial adviser and my business sells content producing services which also makes me biased in multiple ways. So before continuing on, please talk to an independent investment adviser with a good long-term track record because your capital might be at risk. If you're not 100% sure you understand 100% of the disclaimers I just showed you, please go to the last section of this video and do not consume this content unless you fully understand and agree with everything said therein. That said, Providence Gold is listed as P AU on the CSE in Canada, where the average 3-month volume is at about 320,000 shares. The stock's 52-W week high is 40 cents and its 52-we low is 8.5 cents. with about 140 million shares outstanding in a $23 million market cap. Today, this is a 16.5 cent stock with a 50-day moving average at 19.3 and a 200 day moving average at 22 1/2 cents, which means that it's now trading below both of them. No in-depth company overview needed here though, as I normally do, because Ronaldo was on the barbecue just a couple of months ago where we went over the basics, um, incentives, insider ownership, some of the geology, a bunch of other stuff in between. So, for those of you who haven't watched it yet, I'll link the company's playlist uh containing all the previous conversations that I've had with Provenence in the description of this video. So, please go ahead and check that out. That all said though, it is time for me to shut up now and Ronald let you do the talking. But, uh first of all, thank you for being here. Oh, thank you for having me and and uh people should not uh get excited by what we put out because uh uh it has helped us to uh adjust our geology thinking for a very good reason and that is a very good thing for the long-term project. >> That's actually a good opener right there. Um because that I think it'll be good update today because that's exactly what we going to be talking about. you've had some drill results and uh looking at them, I'm not seeing the grade that I expected based on last time when we spoke of what I expected. Um so what's really going on here? What's uh yeah, talk to me about what you're seeing. >> Okay. Yeah. What uh happened in the initial drilling? First of all, we had two FA, you know, a different problem that contributed to this and that's that we had a serious delay in the actual assay results coming back from the lab because we were in the middle of a funding and we were not uh able to we didn't allow ourselves to see the results which would have impacted uh that funding. Uh so uh the original drilling was based on a geology model that our modeling uh geologist had based on our drilling of the first high-grade zone. If you remember the high-grade zone that everybody was excited about, it's steeply dipping. Well, we expected all the other structures on the property to also be following that and be steeply dipping. They aren't. uh they that's where we got uh surprised uh because our initial drilling was on that assumption and what we have found now and and we are actually starting to uh confirm this model is that the first area is a steeply dipping feeder zone basically a plumbing system that in fact I'll use an analogy here because I used to work in geothermal and I these This is a geothermal cell or cells that created this deposit as well. A normal cell will have a main feeder cell of the hot water which in the case of one I'm thinking about in Oregon was a a rangefront fault. As the fluids came out, they spread out along any fracture that has permeability, any unit that has permeability like a a tree pattern with branches spreading out with the trunk being the feeder zone. And in this case, we have something very similar. Area one is one of those trunks. And it's one of, I think, of a forest of trunks. But uh what we were expecting to find out there away from this was a bunch of of uh little zones uh dipping down. Instead, they're they are modestly dipping. And the modestly dipping zones were missed by initial drilling that we expected to be, you know, deeper going straight down. Now that we've modified the model and tested it, it does two things for us. It refocuses our drilling much more accurately, but just as importantly, it actually expands the uh the amount of ounces in the system because instead of having these narrow zones that are dipping steeply, they're pancake layered now. And the total ounces in an area go up. Uh and what we have done now with our drilling is we have confirmed the existence of uh half gram type zones that are extending out with higher grade places in those zones. by the way, uh, a long ways and probably connecting to other feeder zones that are the higher grade, high angle zones, uh, down south in Herman, possibly off to the west in what we call zone 4 and other places on the property. And I think this pattern is going to repeat across the entire diorite. So it it's actually opened the system up. uh what we have seen uh with our drilling now is that people are going to expect better drilling results in the future but they should not be alarmed for a different reason as well. Uh the the real point of this uh program is to establish a large economic uh re resource and uh the majors that have talked to us are that's what they're interested in. They're not interested in high-grade flesh in the pan type results. They're looking for bulk tonnage. What we have now is that developing bulk tonnage and uh uh if you step back and look at the volume that you can armwave, it's a it's an arm wave until we put it into a a detailed resource. There are obviously to me as a geologist several hundred,000 ounces in this first high-grade zone at multi ounce. Uh I think we're going to repeat that pattern in these other areas, but in between there is a large volume of half gram type mineralization. The average grade of an open pit in the world in Nevada being an example here is about half a gram. So it's very attractive. And if you look at it from a different standpoint, our uh the cost normally of producing one of these tons or or I should say getting the gold out of a ton of gold in an open pit is maybe $67 a ton. The gold values in half a gram are way above that. So there's a profit margin that makes the half gram Nevada mines very economic on and if you look at any of them and their bottom line those are very attractive. In our situation we have uh the feeder zone area that will get capital payback in a very short time and then we're off and running with economic bulk tonnage until we get the next high-grade feeders on. So that's the and one more thing on that and that's that I if you looked at a map which we have and in fact in that news release that we put out if you looked at the map that showed the area that we're working in it was a tiny square in a big land package and that big land package covers Elorado West only. uh within that we know that there are other areas of major plaster mining historically the diorite body that's the host and source is exposed in those areas and we're just scratching the surface on volume in area one and the Elorado east will be a different talk because it's it's a bigger package with much more historic mining activity and mineralization in it. So long story short, uh what we had happen with this early drilling program was a refocusing into a new model that is much more realistic than the first guess of a bunch of little zones standing on end. And uh we have used that new model to start proving up that it is a much more accurate model. And the net result is we're going to have a a lot of ounces over a very large open-ended area. Okay, that's a long- winded description right there. >> It is. And there's loads to get into and a couple of things to depict there, Ronaldo, but you you you obviously make a good point that what potential buyers of this ass, and this is very forward-looking, of course, but what they would be looking for is to make money on those ounces. They don't necessarily the absolute grade. They just want to make money on it. Makes sense. What kind of grains are realistically minable in this type of setting in Oregon though where where you are specifically and what would you be basing that on? >> Well, it it's uh in an area that is very much like Nevada. And uh if you use Nevada as a model, as I said, the average mine is about a half a gram. That's it. And they're making a very good profit on that. their average operating costs are not a whole lot over a thousand dollars an ounce. So you look at the spread on that. That's why the Nevada companies are very happy. Uh in our situation, I expect similar costs. It's similar geology, similar terrain, everything. Uh and uh by the way, those costs get carried to weird places like uh Alaska, you know, other places in the world where it's much tougher. You would think the cost would be skyrocketing above that. No, the costs are about the same. And the uh uh uh uh values of gold that are economic are about a half a gram. And in those mines, what happens is if you're if you're mining a zone, call it a half gram zone, and you have removed stuff that is down to even a tenth of a gram as part of your mining operation to access that half a gram. That rock goes into a separate pad. It doesn't go into a waste pile. And the reason is that you can recover more than the cost of uh producing that and putting it on the surface out of that tenth of a gram rock as well. And that's what all the mines are doing right now in places like Nevada. They're they're actually mining rock at even less than a tenth of a gram for that reason. But bottom line, half a gram is extremely economic. We this looks like it can start in multigram with recoveries that are better than the average Nevada mine from early testing and uh that is an important item right there. >> Mhm. Permitting is part of the the process as well part of the what might be different and you and I have talked about this before uh because it is Oregon and you've explained to me that you're on the eastern side of the state which is is different than the western side of it. Right. But so if you're thinking about a heat leachch though, it it's still that's kind of a touchy subject almost everywhere in the world, right? So would you see a heat leach still working out even though it's Oregon? >> Oh, definitely. Not only uh can you use cyanide in Oregon, you know, if you use that and there's no prohibition and uh I that you're going to see that down the road. But you can also economically recover from early testing on this using gravity and flotation and and there are other elements or I should say other recovery agents than cyanide that can be used as well which some companies are using. So as far as eastern Oregon the political situation has strengthened rather than the other direction over the last several months. uh uh Trump has prioritized Grassy Mountain as a as a streamlined project for development uh through the federal agencies. Uh the state is very supportive of development of uh of a gold mine run properly and safely and environmentally friendly like Nevada in Oregon. So it's not an issue. The cost should be very similar to what we see in Nevada, >> right? And again, this all of this is basically forwardlooking and um we'll talk about that more down the road as you as you advance as well. I do see though, Ronaldo, that the primary hosts are carbonious shells. Wouldn't that pose a pro a Prague? Wow. This is this is me trying to pretend that I'm smarter than I really am and saying words that I normally don't say, but a Prague Robin risk. Wouldn't it be wouldn't it be an issue? >> Okay. Yeah. Okay. Yeah. >> Uh not really. uh they one of the things that I think is important with the host environment by the way the carbonatious shields also occur in Nevada and those deposits and they're handled quite easily but uh one of the reasons that this deposit exists I think is the fact that we have that black shell that it invaded the diorite invaded because it triggered precipitation of gold out of the fluids and the reason that you have the high-grade deposits in Elorado East that we acquired historically, including one for instance that was confirmed by drilling in the 1980s to have an open-ended 170,000 ounces at 23 g. That you know that was at that time that's what was reported in the news. Uh anyway, the reason that those bodies exist and our mineralization exists may be because of the precipitation triggered by the host rock that the diorite fluids came into. >> Yeah. Uh that's the the fluid part of it is interesting to me as well because it also I'm starting to think about other stuff you know regarding metallergy maybe staying on that topic as well. Is there any indication of sulfide encapsulation where kind of the sheets that you you just told me about earlier steepen uh east I believe? >> Uh no actually what's funny one of the reasons by the way that I'm tying the elorado diorite uh to Elorado West diorite to the Elorado East diorite and to a a bigger zone than that is that the metallergic characteristics are very similar. And uh what they had in the old mines in Elorado East was about 50% free gold and uh free milling gold they called it. And they had excellent recoveries using gravity and flotation in the '90s%. Uh uh so that's a possibility. Uh the the bottle rolls that were done on this material showed recoveries of up to 85%. uh we call it equal to or better than Nevada normal heat bleach operations which also impacts the economics rather dramatically. U uh there's no encapsulation that we have seen the gold came in after the the the main pyite and alteration event happened. It was a late stage lower temperature event. And to underline that in the core that we took last year, you actually saw visible gold pieces replacing mafic minerals with no encapsulation. There were that's creates the free milling when it weathers and also when you grind it. There's no encapsulation by silica either. There wasn't any noticeable solicification in these areas of the gold mineralization which is a puzzle. I don't understand it but normally you'll get silica encapsulation as well and there's not a lot of silica or solicification in this system. >> What is that? Is that telling you anything about grade potential at depth though? The fact that there's not a lot of uh silica. >> Uh not really. Well, actually, for an open pit, I don't care. We've carried the mineralization down. I'm sorry to put it that way, but we've carried the mineralization down uh to uh 200 m uh from the surface and and beyond and uh the the grades held up to 288 m in Corho 1. Uh so, how how deep can you take an open pit? and uh you've already created a much larger volume than the historic volume that was projected using uh rotary drilling that only went down to 100 meters. >> So it's I'm so I'm not sure that I answered your question, but uh I I don't think it it's going to impact the fact that we have a major multi-million ounce system that spreads out over a big area. how deep you can you can take an open pit I suppose depends on the geometry of of of of your or body there and that's something that I do want to ask about as well but just one more thing before we continue on um does any of what you're telling me about right now um about the metallergy does that coincide do like chargeability highs do they coincide with you know low lower grades or or higher uh whatever arsenic values or something like that is that something you've looked at already. Uh we have we haven't seen a whole lot of obvious correlation right now except that the fluids uh demagnetize the diorite in places in that the gold mineralization event which means that if you go to magnetic uh deterioration in the diorite body you're better you have a better chance of finding good gold mineralization. Uh the one correlation we've seen that seems to click for me right now uh is casear. I mean potass you start seeing potassium alteration and that really uh matches the gold pretty well. >> Yeah that's actually interesting when we talk about deposit models as well which I'm is something I'm hoping we can talk about as well toward the latter part of the conversation. Um, going back to that geometry though, what percentage of the reported intervals here do you think is is true true thickness because again that's not in in the news release. Uh, what would your best estimate be? Well, uh, based on our angles of drilling and projections, I'm going to guess that the true thickness is just as a, you know, one of those things, uh, is going to be a a good 70% and maybe better even because we're hitting at high angles. >> Yeah. When do you think you're going to announce that? Uh, or when do you think you're going to know that for sure? uh as our model is confirmed, we can announce that. But uh also, by the way, those thicknesses and comparing them is more important in a uh a vein system where you're looking at one high-grade zone. In this case, we have multiple zones and bulk tonnage. And it's the strip ratios are going to be more important than thicknesses of zones. And right now the strip ratios are looking pretty promising because an awful lot of our mineralization starts at surface. >> Okay. Um that's so so was because the followup would be your generally where I want to take the conversation is what else can you tell me about the geometry and and the orientation of the mineralized zone right now now that you're putting a bit more holes into it. >> Okay. What we have uh found is first of all uh let's let's step back a bigger let's step back a ways uh first of all the overall package of gold system in the area follows a major eastn northeast trending structural zone that's a few miles north south and extends all the way from our area to the Idaho border maybe beyond within that uh there there is a diorite body that has roof pendants and uh and not just the roof pendants but floating sections I think of the country rock on top of the diorite and uh that uh system right now has been broken up uh in two ways to allow plumbing to form you know for the gold system when when it was working in the diorite. One is the the structures uh the east northeast trending structures. Uh there are also north and northwest trending structures that were all premineralization that were host environments that created the fractures for the gold mineralization. Another component that's become very clear now with our work is that uh when you put a diorite body into a series of sediments especially black shells uh their uh structural behavior in any kind of stress strain u pattern is going to be to create a lot of fracturing at the contact because they're going to behave quite differently. So you have a massive diorite pushing up and uniform and you've got all these shells that are just on the edges. Well, those edges are the host for the high-grade or bodies in Elorado East today. And uh uh uh those uh edges are also combined with the pyite in the the black shells. Great places for gold to drop out of solutions, find the fracture host areas, and drop out. So that's a long- winded explanation, but anyway, we have host areas that are created by folding. We have host areas that are created by the contact between the diorite and the country rock, and we're following up on those. And uh where we find them, we seem to be finding gold. >> It does seem to be kind of elongated though on the pictures that I see in the news release that you've provided. Um does that worry you in terms of uh the strip ratio and again this forward-looking but but yeah >> not really uh because if you look at not just the high-grade you know the the average 3 g area that that was uh pretty close to uh 100 meters across and we don't know the length of it or the details of it but that forms a pretty good beginning of an open pit. Then you look at what the wall rocks on on any kind of step down open pit are going to be. Well, the wall rocks are going to have a lot of zones of half gram type mineralization. And as I said earlier, if you're moving that stuff out anyway, even down to a tenth of a gram, uh you're going to put it onto a recovery pad of some kind. And the a very large percentage of that uh rock away from the 3 g area is in that category of of strongly mineralized and it's going to uh provide additional gold resource locally. Within that we've been finding some high-grade little areas in there that can be separated. Um I don't know if you ever been through one of the Nevada gold mines that's operating. uh what they actually will assay uh basically on a daily basis the faces and uh and they will uh designate where uh the rock is going. Is it going to the mill? Is it going to a leash pad? Is it going to a secondary lease pad? Is it going to the waste pile? And that way it's a very efficient way of getting maximum recovery versus cost in those situations. Uh again, long story short, it's going to be easy for an open pit to go down a long distance because of the volume of 3 g average material. And then the the sidewalls are going to be allowing it to go even deeper because they're economic in that operation. I don't know if they that got too long-winded and complicated, but long story short, yes, you can go very deep. Well, Ron, I've been out of my depth the moment we said hello. So, so it is it almost everything is is complicated for me, but that's kind of a me problem, not really a he problem. Um, pit wall stability in that case, uh, because you said it would be a good, you know, a good point for for starting off the mine. What is the um what's the competence of the rock there? Is it is it is it strong enough essentially to carry the pit slope here? >> Oh, yeah. and and there are very tight regulations on pit walls. Uh and you you start doing rock mechanic studies to make sure and uh the uh so a pit that's that's really shallow will have a much steeper pit wall because uh mechanically that's stable. you get the deeper you go uh the uh the flatter the whole operation the pit walls have to be to accommodate the the possible failure and uh in this case uh you can it's not a a dangerous situation because it's very much regulated a by the the governmental regulatoratory agencies and b by the studies that every company does on pit wall stability and engineering. >> Mhm. >> To that note, I was at Chuki Kamada in Chile years ago where they had a major pit wall failure on one side that was obvious uh for for not paying attention to those rules yet they mind through it and around it. So, it didn't pose a major hurdle to the mind. H well really why I'm asking this or where I'm coming from even though it is forwardlooking too early really to talk about that is kind of trying to get an idea of of how minable could potentially this thing be and and also because I do note that in hall 24 uh you terminated that due to what you called bad ground. What exactly happened there? Uh what happened there is uh we had a bladey uh uh rock you know from joining and stuff and soft rock in between which was probably near surface alteration of folk gouch and basically it was causing a problem. It's not going to be anything to do with pit wall stability or anything like that. It was a mechanical problem within the drill hole. We we they kept fighting that that rock that was coming in at a let's say the rock was like that and the drill was going down. That bladyy aspect of it keeps jamming in there and causing problems for the drill penetration. We finally just said enough of that. Let's just step over and drill the different hole which worked fine. >> Okay. Uh how's the um it's actually good to hear that it's that. I thought it might be something to do with water. How's uh how shallow is the water table here? It's variable, but it's normally at about 100 meters and it'll be quite handleable in any kind of mining operation. Some of the Nevada mines, for instance, run into groundwater at a much earlier stage and it's handled very inexpensively by pumping and again all of the the controlled pumping is tightly regulated for environmental protection etc. And uh in this case it will not be any kind of a problem for uh the mining operation. >> Yeah. Well 100 meters does does sound shallow on when when you think about it at first. Uh but it is something that there's other places in the world that I believe deal with less um some at at 40 50 even in Africa. Uh so I I I have seen that. Uh bottom line, Ron, what I'm getting from you here is that you're not worried about these results. You actually seem to to be happy with what's come out of the ground. Market seemed not so happy with the results at first. You traded a lot of shares before the news release um a couple of days and then on the day of the news release, pretty high volume there and and a bit of a drop in the price. I think some of that seems to be recovering right now as we speak. But do you think what happened there? I mean, do you think expectations were too high or what's causing the drop? And of course, how do you fix it? >> Well, that's not in my Bailey week, but in talking to our guys, uh, what they said happened is there were a bunch of people that bought on that first, you know, high-grade core hole. And they were waiting for more of the splashy news. Instead, they were getting meat and potatoes news away from that first uh plumbing system. and they they dumped because uh of that situation. The people that recognized what we were doing stayed in and they started buying back the shares at a new low price that they think is a great bargain at this point and that that's what's going on right now. uh the people that are knowledgeable are recognizing what we're doing and understanding the situation and acquiring while the people that came in for a quick bump and dump have been departing which I think is a long-term healthy thing for the company. H is that something that that do do insiders have the ability I suppose you have some some assets pending right now so you don't have the ability to be buying on the market now um but do you have the ability and the desire you and other insiders to be you know on the bid supporting the stock price >> uh no I actually I stay away from that completely on on one note I can tell you though on on my uh confidence in the company and the project is that my son for non company reasons needed to sell his shares that he had a half a million of and he was going to sell them to somebody else. I stepped in and and bought all half million shares because I thought it was at a price that was a bargain and going to get better and and I'm I'm not planning on selling but I did acquire those so that we had extra control on that aspect. Mhm. Talking about those assays, uh what else do you have coming? Where in the project is it from and when do you think we're going to see those assays? >> Okay, we have uh we've drilled 17 holes to date right now and that uh news was on the first 10. Uh we are still in uh most of the holes are still in that intermediate area. Uh trying to find out what's between uh the area one uh feeder area and heading west toward the area 4 and south toward the Herman feeder area. Uh so uh I'm expecting to get more results uh that are adjusting to the new model over the next couple of weeks and in the next two or three weeks. I don't know how quickly after that we can turn out the the news. Uh we're going to be getting results from the Herman area. >> Okay. The urban area is our next area that we think has a feeder system in it. And I'm expecting that that news should hit in September, October, and be at a good timing for very good news. >> Um, but but those holes were essentially predetermined. It's not like you saw what was coming out of the ground and then went and drilled the other seven holes or or because you said they're, you know, drilled with the idea of this new model essentially that you're working with or how were those holes drilled? >> Oh, well, actually these Yeah, these holes were predetermined right now for the the pattern of of infilling and stepping out with the new model. What we're doing is we're starting to adjust uh our drilling as it goes along and we have a planned program right now that is testing uh the Herman area. Then we have uh uh some holes planned up to the north to test that west area that we think may host another one of these uh feeder systems. And uh as a geologist, I had to throw in an area that uh IP showed up to be a really interesting target on the way by. And so we're testing that as well. So we we do have the next several holes planned right now. They're part of the expansion program. We got a new permit for 17 new pads stepped out quite a bit further than the original. And uh we are no longer limited to doing that that modest stepout. we can do some significant stepouts to our our mineral system. And I wish I had that map that shows this area that we're working in compared to our property position which has plastering and all kinds of evidence to suggest that the mineral system extends because you would understand that it's supposed to stamp on an envelope. The interesting part actually to that is that some of the stepout holes that I do see on that MA map, they seem to be coming closer to the property boundary. What if the system dips outside of your package? What do you what's outside of your package? What do you do then? >> Well, we have uh two things on that. First of all, uh the property owners on the sides have expressed willingness to deal. But, uh, when we looked at it, first of all, uh, our drilling program right now is going into the interior of our property because we like that area. Uh, to the west, uh, I I think it extends to the west, it extends to the east. But, uh, the most, uh, interesting mineralized part of that whole built that I was talking about earlier is that area covered by Elorado East. And we picked that up when it became available right off the bat. Uh because now we control that and at our leisure we could actually develop uh uh assuming everything goes the way that we expected to. We a mine could be developed on each of those two properties without acquiring anything else. But uh in a long-term operation obviously uh somebody out there is going to uh uh confirm that deal with the ranches and it'll all connect. Okay. From the coming holes that you have here, the the seven holes that are still outstanding, is any of that twinning of any historical holes or it being close to it? Where are they in relation to any historic stuff? >> Well, the the Herman the first Herman hole is close to a historic hole, but it extends way past that historic hole. So, uh we're we're testing the area and the others aren't. We're testing uh targets that are outside of the twinning situation into virgin ground, which I like. But yeah, the the first hole in Herman was sort of twinning for the upper part of the hole, but then we continued it past it and a long ways past it. >> Okay. Um and it's going deeper though, I assume, as well. Uh yeah, the historical uh went to 425 ft and we went to I think 910. >> Uh that's what is that 300 metersish. Yeah. >> Yeah. >> Okay. Um well, maybe to summarize here what you've told me so far, what is it that you'll be chasing from now on out? Like how do you how do you package it nicely that even someone like myself, you know, 75 IQ can kind of make sense of it? Well, I I first of all, I doubt that a whole lot, but anyway, what we're doing right now is establishing that we have a major gold system. Uh it we're doing the metallurgy testing coming up to confirm the recoverabilities are going to be excellent. uh uh we are uh going to do it on a systematic pattern spreading out from area one in Elorado West and uh that is going to be a major expansion because we see signs that we can do this over much larger areas than what we've been working on so far. uh at the same time we have uh started doing mapping and uh uh and sampling uh but mostly mapping and geohysics on Elorado East and extensions of Elorado West. We're going to be uh we have started the permitting process. In fact, we've submitted the the permits for Elorado East right now for drilling. That drilling program may not commence until next spring on Elorado East because of timing of winter coming and what we're doing on Elorado West. But uh it's going to be a systematic expansion of uh of a major gold system that we've just started on right now that I think is going to be better economics than most open pits in the world, better grade than most of the Nevada type open pits in the world. And uh I think we're going to be attracting a lot of attention as uh as this progresses. I don't know if that was an answer, but that's Yeah, you do seem to be getting a better handle on what the system might be. Uh so so is it too early to call it a a reduced intrusion system or is it starting to look more like a carlay and is it something else? What do you what's your best guess right now? Well, I don't compare it to one of the things I've learned is every system's unique and in a case like this where we had a diorite that I think is associated with a subduction zone, you know, which is a very specific type of diorite body coming into a carbonri shale environment. It created its own system and uh especially because we had a lot of gold, the fluids were so strong. By the way, as an aside, that in our core, we actually had visible gold that replaced mafic minerals with no solicification, no encapsulation in the rock without any visible means for the fluid to reach that place. So we have a strongly golden enriched uh highly fluidized diorite coming into rocks that uh that are trying to drop gold out of solution because of the carbon content. And uh I don't know how you what system I can think of anywhere that I've seen that quite fits that model. It it's a big diorite that has segments of roof pendant on top and roof pendants within that uh were part of the process. >> So is the assumption that there Oh, no. Go ahead. >> It's a low temperature system that are our geologist uh whose modeling thinks must be a distal part of of some kind of a porefree system. And I'm not going to argue with them on that, but it doesn't need to be. It's it's a low temperature system of gold minization that came in after the major alteration of that diorite. That major alteration of the diorite was pre- gold. Pre- gold comes in. After that, we had some falting in the area by based on a range faulting that came in later. But uh uh I can't uh put any other deposit that I've ever seen anywhere quite into this category. So I have to call it its own unique system. >> Mhm. So it's not because I was thinking how many intrusive pulses might have been here because it it's obviously multiple I think. Uh but but what are we really talking about here? And and really what I'm asking is because I'm trying to figure out how complicated is this thing for for you and the guys in the team to uh figure it out. >> Well actually there are some simple rules we're starting to develop. Uh gold is a good indicator. We're finding more potassium is a good indicator to take you to the gold few other things but our geologist that's mapping right now has indicated he can see at least three major pulses of diorite and placement in this. So it is a multi-pulse diorite and it's going to get even more complicated because it's going to tie into uh the diorites to the east. So, I think it's uh uh it's going to be interesting to try to sort out uh which pulses were most important to gold mineralization, but we're following the gold to begin with. And the lot a lot of the world's minds were mined out before they ever knew what the system was. They just uh the old engineers add it get on her and stay on her was follow the mineralization. And to some extent that's what we're doing right now. We're following the mineralization. We're using these other controls to step out and find new high-grade spots within an area that has intermittent constant mineralization. >> How's um money for you right now or how is it going to be at the end of the program? Well, right now uh when we pay all the bills, we have about 2 million uh left for uh continuing the program. And at that point, uh you'll have to talk to Rob on how that money is best spent. But we're not concerned with what uh we have and what's going on including uh uh what we're doing with our current in the lab results and drilling that we can refinance and continue to expand, but we want to do it in in the least diluting method. And obviously we can't answer that question right now. We have some companies that have approached us producers. We don't know where that's going to go at this early stage, but as as we expand the footprint and volume of this thing, I think those those could become more serious. Uh I'm a avoiding answering the question because I don't know at this point than Rob is probably the better one to answer that. Well, and maybe just directionally, um, you know, that two million bucks, what else does it or how far does it get you, uh, is what I'm thinking mostly from the perspective of when do you have to when are you going to have to raise money again? Uh, and also, this is uh worth pointing out is that you have some 60 million warrants, I believe, outstanding. There's over 10 million options. So, what's the date on that? Where does that come into play? >> Okay, I I'll have to go back and look again. That's not my category right now. But this 2 million will carry us through this year's program and uh obviously uh just if you think about it then we have to do a refinancing after this year's program. I think the results will allow us to do that next raise at much better terms than what we might imagine right now. But it also opens the door to considering other options. >> Mhm. But essentially, you think you don't really have to go back to the market for a normal private placement this year? That would be again forward-looking, but that would be your expectation then. >> I I don't expect that. No. >> Okay, good. Uh, what else do you have coming up this year? Is it Are you going to be doing any network or anything else in the meantime? That's kind of maybe an in between, but still an important piece of the puzzle. >> Oh, very much so. We're we are setting aside samples right now for MET testing to confirm. We've already done some the the historic companies did MET testing and we also have met testing results that were uh described in the literature from the Elorado East mines that happened out there and they all point to excellent recoveries. So if you switch gears and look at this from an economic standpoint, uh I I really like it. uh they had simple recovery methods, extremely good uh recoveries and and in this case we would have quick capital payout from that multigram start area and uh I think the economics is a better way in some ways to start looking at this property as well. >> Yeah. Yeah, that's going to be a very important important part of it as well. Um, what else do you have in planned in terms of um, marketing in the meantime? I don't see you on the Beaver Creek uh, list thing. So, I suppose you'd not be going to that, but what else are you going to be doing for marketing? >> Uh, that's a question for Rob. He's handling that. I won't tackle that. But, uh, on what else we're doing? We're doing mapping. We're doing uh, uh, we're going to do multi-element. We're doing some metal screens on this. We want to understand the details of the system and uh I'm hoping that we get a chance to do aerial mag over Elorado East because you know that will help us determine where the diorite bodies are hidden underneath those uh those blankets of plaster material out there. >> That's also something you can do year round if I'm not mistaken. So that's something you could do later on in the year potentially early next year as well. We can do it anytime. The that doesn't uh get affected by snow cover at all. >> So, yeah. >> Okay, good. Well, I'm starting uh to get a better idea. I think we're also going to be talking in the meantime. You know, I'm asking you about raising capital and so on and so forth. You said you're expecting it to take you through this year. I'm sure we'll talk before the end of the year, Rono. So, what is um what do you think is the most fair criticism of the Providence story right now? What's something that you know, you talk to investors often. What's something that you hear and you're like, "Yeah, that's kind of true." >> Yeah. I I think it was that the the most severe criticism we had was uh the uh results that were expected on this based on the early rounds. And uh the only answer to that is that we've adjusted the model and the system uh the the model that we have developed that is more accurate is going to allow a bigger system than what we had originally projected. And with apology, I think there's I I've been worried about this uh uh uh we called the kakott syndrome. And uh and when I was working in management in Kakott, we had the kakott syndrome. What that was was Kakott had the world's largest uh copper mine, you know, this huge hole in the ground. and and whenever a new project came up, they would always compare it to uh the the Kennot mine and obviously uh Bingham Canyon is a unique thing in the world being the world's best. So when we did our first drilling out there and hit that 175 m of 3 g, uh while uh we were ecstatic, we also I was very concerned that uh we're going to go out from this first feeder area into all of that area in between that has average grade material until we find our next feeder area maybe down in Herman in area four. And people are going to say, "Oh, that's a major disappointment. We're not getting more high grade. Well, it's it's bulk tonnage very good grade. And if we had drilled those without the first holes that we drilled, everybody would have been doing handstands. Instead, they were saying that's not 175 m of 3 g. And that was the disappointment that people need to get over and realize we're at the beginning of developing a major new gold system with all kinds of good economic characteristics. >> Yeah. What uh what is going on in in Oregon might be worth an update on uh because I I think that's where you live, right? >> Yes. >> Oh, >> yeah. I find a just why I bring that up is I I found an article a couple of days ago. It says uh it's called Eastern Oregon gold mine proposal se seven key impacts for 2025. And it's got kind of this big quote on on the front page of the article. It says um the gold mine proposal could impact over 10,000 acres of land affecting habitats and local economies. And so it's a whole, you know, it's a long article describing all of that. And then there's there's something about Knife River as well and the the water there and stuff like that. uh just kind of commenting uh on what's really happening in the Oregon, you know, mining and and exploration uh world. What is uh what are you seeing? What's happening on the ground? >> Well, what I'm seeing happening on the ground is uh very helpful. First of all, I I I do talk to one of the adviserss uh for Grassy Mountain and uh everything is in place. They're going through the mechanics. Uh they will have their final permit before the end of the year. They are doing additional drilling to start developing an open pit deposit instead of the underground deposit that they have completed the permitting on. Uh they also uh uh I was told by dogami Oregon's regulatory body that they have a swarm of applicants coming in for drilling. Uh there are several companies drilling different targets in Oregon right now. uh and uh they are expecting a flood of new activity in the state. We have finally reached that point where people recognize Oregon, Eastern Oregon is open for business in the mining community and I'm very happy that we are at the forefront of that. Right after Grassy Mountain, I think we have the most advanced project coming in behind and that is a great place to be. You you never want to be that number one because of all the trials and tribulations, but number two is a great place. >> That's a that's a first to be second type of thing. I >> exactly >> is is what you're getting at. Uh good. No, Ronald, that's been a good update. I think I've been through through most of it. I'm sure I'm forgetting some stuff and I'm sure that people listening to this will remind me of it so that I can ask you uh in our next conversation, what do you think I'm forgetting? What did you come here hoping to talk about that I failed to bring up? I can't think of anything. You're you're pretty darn good at what you do despite your own self criticisms. >> Well, I really do appreciate you saying that and I appreciate you sitting down with me. Thank you so much, Fitzy. >> And thank you. Okay. Always fun to talk to you. >> And as always, thanks to everyone for watching Resource Talks. I have a couple of more things to say though. The fact that this company was interviewed here today does not mean that they're necessarily a good or a bad company. I am not here to endorse nor attack anyone. I am simply here to ask some questions. 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Oregon Gold Explorer Delivers New Assay Results | Provenance Gold CEO Interview
Summary
Transcript
Today on a CEO barbecue, we're looking for gold in Oregon together with Providence Gold. If you want a bullet point summary of this conversation and all the other CEO barbecues in your inbox once a week, go to resourcealks.com and subscribe to our free newsletter. Now, the company you're about to hear from has paid us for the production of this video, which means that this is not research. It's an advertisement and you should treat it as such. Research is conducted by reading the company's official filings which you can find on setterplus.ca. And please only watch this if you absolutely know what you're doing. This interview is intended only for experienced junior mining speculators because mineral exploration development and mining is a very tough business where failure is the norm and should be the expectation. This is going to be a conversation that is general and impersonal in nature containing forwardlooking statements. I am not a licensed financial adviser and my business sells content producing services which also makes me biased in multiple ways. So before continuing on, please talk to an independent investment adviser with a good long-term track record because your capital might be at risk. If you're not 100% sure you understand 100% of the disclaimers I just showed you, please go to the last section of this video and do not consume this content unless you fully understand and agree with everything said therein. That said, Providence Gold is listed as P AU on the CSE in Canada, where the average 3-month volume is at about 320,000 shares. The stock's 52-W week high is 40 cents and its 52-we low is 8.5 cents. with about 140 million shares outstanding in a $23 million market cap. Today, this is a 16.5 cent stock with a 50-day moving average at 19.3 and a 200 day moving average at 22 1/2 cents, which means that it's now trading below both of them. No in-depth company overview needed here though, as I normally do, because Ronaldo was on the barbecue just a couple of months ago where we went over the basics, um, incentives, insider ownership, some of the geology, a bunch of other stuff in between. So, for those of you who haven't watched it yet, I'll link the company's playlist uh containing all the previous conversations that I've had with Provenence in the description of this video. So, please go ahead and check that out. That all said though, it is time for me to shut up now and Ronald let you do the talking. But, uh first of all, thank you for being here. Oh, thank you for having me and and uh people should not uh get excited by what we put out because uh uh it has helped us to uh adjust our geology thinking for a very good reason and that is a very good thing for the long-term project. >> That's actually a good opener right there. Um because that I think it'll be good update today because that's exactly what we going to be talking about. you've had some drill results and uh looking at them, I'm not seeing the grade that I expected based on last time when we spoke of what I expected. Um so what's really going on here? What's uh yeah, talk to me about what you're seeing. >> Okay. Yeah. What uh happened in the initial drilling? First of all, we had two FA, you know, a different problem that contributed to this and that's that we had a serious delay in the actual assay results coming back from the lab because we were in the middle of a funding and we were not uh able to we didn't allow ourselves to see the results which would have impacted uh that funding. Uh so uh the original drilling was based on a geology model that our modeling uh geologist had based on our drilling of the first high-grade zone. If you remember the high-grade zone that everybody was excited about, it's steeply dipping. Well, we expected all the other structures on the property to also be following that and be steeply dipping. They aren't. uh they that's where we got uh surprised uh because our initial drilling was on that assumption and what we have found now and and we are actually starting to uh confirm this model is that the first area is a steeply dipping feeder zone basically a plumbing system that in fact I'll use an analogy here because I used to work in geothermal and I these This is a geothermal cell or cells that created this deposit as well. A normal cell will have a main feeder cell of the hot water which in the case of one I'm thinking about in Oregon was a a rangefront fault. As the fluids came out, they spread out along any fracture that has permeability, any unit that has permeability like a a tree pattern with branches spreading out with the trunk being the feeder zone. And in this case, we have something very similar. Area one is one of those trunks. And it's one of, I think, of a forest of trunks. But uh what we were expecting to find out there away from this was a bunch of of uh little zones uh dipping down. Instead, they're they are modestly dipping. And the modestly dipping zones were missed by initial drilling that we expected to be, you know, deeper going straight down. Now that we've modified the model and tested it, it does two things for us. It refocuses our drilling much more accurately, but just as importantly, it actually expands the uh the amount of ounces in the system because instead of having these narrow zones that are dipping steeply, they're pancake layered now. And the total ounces in an area go up. Uh and what we have done now with our drilling is we have confirmed the existence of uh half gram type zones that are extending out with higher grade places in those zones. by the way, uh, a long ways and probably connecting to other feeder zones that are the higher grade, high angle zones, uh, down south in Herman, possibly off to the west in what we call zone 4 and other places on the property. And I think this pattern is going to repeat across the entire diorite. So it it's actually opened the system up. uh what we have seen uh with our drilling now is that people are going to expect better drilling results in the future but they should not be alarmed for a different reason as well. Uh the the real point of this uh program is to establish a large economic uh re resource and uh the majors that have talked to us are that's what they're interested in. They're not interested in high-grade flesh in the pan type results. They're looking for bulk tonnage. What we have now is that developing bulk tonnage and uh uh if you step back and look at the volume that you can armwave, it's a it's an arm wave until we put it into a a detailed resource. There are obviously to me as a geologist several hundred,000 ounces in this first high-grade zone at multi ounce. Uh I think we're going to repeat that pattern in these other areas, but in between there is a large volume of half gram type mineralization. The average grade of an open pit in the world in Nevada being an example here is about half a gram. So it's very attractive. And if you look at it from a different standpoint, our uh the cost normally of producing one of these tons or or I should say getting the gold out of a ton of gold in an open pit is maybe $67 a ton. The gold values in half a gram are way above that. So there's a profit margin that makes the half gram Nevada mines very economic on and if you look at any of them and their bottom line those are very attractive. In our situation we have uh the feeder zone area that will get capital payback in a very short time and then we're off and running with economic bulk tonnage until we get the next high-grade feeders on. So that's the and one more thing on that and that's that I if you looked at a map which we have and in fact in that news release that we put out if you looked at the map that showed the area that we're working in it was a tiny square in a big land package and that big land package covers Elorado West only. uh within that we know that there are other areas of major plaster mining historically the diorite body that's the host and source is exposed in those areas and we're just scratching the surface on volume in area one and the Elorado east will be a different talk because it's it's a bigger package with much more historic mining activity and mineralization in it. So long story short, uh what we had happen with this early drilling program was a refocusing into a new model that is much more realistic than the first guess of a bunch of little zones standing on end. And uh we have used that new model to start proving up that it is a much more accurate model. And the net result is we're going to have a a lot of ounces over a very large open-ended area. Okay, that's a long- winded description right there. >> It is. And there's loads to get into and a couple of things to depict there, Ronaldo, but you you you obviously make a good point that what potential buyers of this ass, and this is very forward-looking, of course, but what they would be looking for is to make money on those ounces. They don't necessarily the absolute grade. They just want to make money on it. Makes sense. What kind of grains are realistically minable in this type of setting in Oregon though where where you are specifically and what would you be basing that on? >> Well, it it's uh in an area that is very much like Nevada. And uh if you use Nevada as a model, as I said, the average mine is about a half a gram. That's it. And they're making a very good profit on that. their average operating costs are not a whole lot over a thousand dollars an ounce. So you look at the spread on that. That's why the Nevada companies are very happy. Uh in our situation, I expect similar costs. It's similar geology, similar terrain, everything. Uh and uh by the way, those costs get carried to weird places like uh Alaska, you know, other places in the world where it's much tougher. You would think the cost would be skyrocketing above that. No, the costs are about the same. And the uh uh uh uh values of gold that are economic are about a half a gram. And in those mines, what happens is if you're if you're mining a zone, call it a half gram zone, and you have removed stuff that is down to even a tenth of a gram as part of your mining operation to access that half a gram. That rock goes into a separate pad. It doesn't go into a waste pile. And the reason is that you can recover more than the cost of uh producing that and putting it on the surface out of that tenth of a gram rock as well. And that's what all the mines are doing right now in places like Nevada. They're they're actually mining rock at even less than a tenth of a gram for that reason. But bottom line, half a gram is extremely economic. We this looks like it can start in multigram with recoveries that are better than the average Nevada mine from early testing and uh that is an important item right there. >> Mhm. Permitting is part of the the process as well part of the what might be different and you and I have talked about this before uh because it is Oregon and you've explained to me that you're on the eastern side of the state which is is different than the western side of it. Right. But so if you're thinking about a heat leachch though, it it's still that's kind of a touchy subject almost everywhere in the world, right? So would you see a heat leach still working out even though it's Oregon? >> Oh, definitely. Not only uh can you use cyanide in Oregon, you know, if you use that and there's no prohibition and uh I that you're going to see that down the road. But you can also economically recover from early testing on this using gravity and flotation and and there are other elements or I should say other recovery agents than cyanide that can be used as well which some companies are using. So as far as eastern Oregon the political situation has strengthened rather than the other direction over the last several months. uh uh Trump has prioritized Grassy Mountain as a as a streamlined project for development uh through the federal agencies. Uh the state is very supportive of development of uh of a gold mine run properly and safely and environmentally friendly like Nevada in Oregon. So it's not an issue. The cost should be very similar to what we see in Nevada, >> right? And again, this all of this is basically forwardlooking and um we'll talk about that more down the road as you as you advance as well. I do see though, Ronaldo, that the primary hosts are carbonious shells. Wouldn't that pose a pro a Prague? Wow. This is this is me trying to pretend that I'm smarter than I really am and saying words that I normally don't say, but a Prague Robin risk. Wouldn't it be wouldn't it be an issue? >> Okay. Yeah. Okay. Yeah. >> Uh not really. uh they one of the things that I think is important with the host environment by the way the carbonatious shields also occur in Nevada and those deposits and they're handled quite easily but uh one of the reasons that this deposit exists I think is the fact that we have that black shell that it invaded the diorite invaded because it triggered precipitation of gold out of the fluids and the reason that you have the high-grade deposits in Elorado East that we acquired historically, including one for instance that was confirmed by drilling in the 1980s to have an open-ended 170,000 ounces at 23 g. That you know that was at that time that's what was reported in the news. Uh anyway, the reason that those bodies exist and our mineralization exists may be because of the precipitation triggered by the host rock that the diorite fluids came into. >> Yeah. Uh that's the the fluid part of it is interesting to me as well because it also I'm starting to think about other stuff you know regarding metallergy maybe staying on that topic as well. Is there any indication of sulfide encapsulation where kind of the sheets that you you just told me about earlier steepen uh east I believe? >> Uh no actually what's funny one of the reasons by the way that I'm tying the elorado diorite uh to Elorado West diorite to the Elorado East diorite and to a a bigger zone than that is that the metallergic characteristics are very similar. And uh what they had in the old mines in Elorado East was about 50% free gold and uh free milling gold they called it. And they had excellent recoveries using gravity and flotation in the '90s%. Uh uh so that's a possibility. Uh the the bottle rolls that were done on this material showed recoveries of up to 85%. uh we call it equal to or better than Nevada normal heat bleach operations which also impacts the economics rather dramatically. U uh there's no encapsulation that we have seen the gold came in after the the the main pyite and alteration event happened. It was a late stage lower temperature event. And to underline that in the core that we took last year, you actually saw visible gold pieces replacing mafic minerals with no encapsulation. There were that's creates the free milling when it weathers and also when you grind it. There's no encapsulation by silica either. There wasn't any noticeable solicification in these areas of the gold mineralization which is a puzzle. I don't understand it but normally you'll get silica encapsulation as well and there's not a lot of silica or solicification in this system. >> What is that? Is that telling you anything about grade potential at depth though? The fact that there's not a lot of uh silica. >> Uh not really. Well, actually, for an open pit, I don't care. We've carried the mineralization down. I'm sorry to put it that way, but we've carried the mineralization down uh to uh 200 m uh from the surface and and beyond and uh the the grades held up to 288 m in Corho 1. Uh so, how how deep can you take an open pit? and uh you've already created a much larger volume than the historic volume that was projected using uh rotary drilling that only went down to 100 meters. >> So it's I'm so I'm not sure that I answered your question, but uh I I don't think it it's going to impact the fact that we have a major multi-million ounce system that spreads out over a big area. how deep you can you can take an open pit I suppose depends on the geometry of of of of your or body there and that's something that I do want to ask about as well but just one more thing before we continue on um does any of what you're telling me about right now um about the metallergy does that coincide do like chargeability highs do they coincide with you know low lower grades or or higher uh whatever arsenic values or something like that is that something you've looked at already. Uh we have we haven't seen a whole lot of obvious correlation right now except that the fluids uh demagnetize the diorite in places in that the gold mineralization event which means that if you go to magnetic uh deterioration in the diorite body you're better you have a better chance of finding good gold mineralization. Uh the one correlation we've seen that seems to click for me right now uh is casear. I mean potass you start seeing potassium alteration and that really uh matches the gold pretty well. >> Yeah that's actually interesting when we talk about deposit models as well which I'm is something I'm hoping we can talk about as well toward the latter part of the conversation. Um, going back to that geometry though, what percentage of the reported intervals here do you think is is true true thickness because again that's not in in the news release. Uh, what would your best estimate be? Well, uh, based on our angles of drilling and projections, I'm going to guess that the true thickness is just as a, you know, one of those things, uh, is going to be a a good 70% and maybe better even because we're hitting at high angles. >> Yeah. When do you think you're going to announce that? Uh, or when do you think you're going to know that for sure? uh as our model is confirmed, we can announce that. But uh also, by the way, those thicknesses and comparing them is more important in a uh a vein system where you're looking at one high-grade zone. In this case, we have multiple zones and bulk tonnage. And it's the strip ratios are going to be more important than thicknesses of zones. And right now the strip ratios are looking pretty promising because an awful lot of our mineralization starts at surface. >> Okay. Um that's so so was because the followup would be your generally where I want to take the conversation is what else can you tell me about the geometry and and the orientation of the mineralized zone right now now that you're putting a bit more holes into it. >> Okay. What we have uh found is first of all uh let's let's step back a bigger let's step back a ways uh first of all the overall package of gold system in the area follows a major eastn northeast trending structural zone that's a few miles north south and extends all the way from our area to the Idaho border maybe beyond within that uh there there is a diorite body that has roof pendants and uh and not just the roof pendants but floating sections I think of the country rock on top of the diorite and uh that uh system right now has been broken up uh in two ways to allow plumbing to form you know for the gold system when when it was working in the diorite. One is the the structures uh the east northeast trending structures. Uh there are also north and northwest trending structures that were all premineralization that were host environments that created the fractures for the gold mineralization. Another component that's become very clear now with our work is that uh when you put a diorite body into a series of sediments especially black shells uh their uh structural behavior in any kind of stress strain u pattern is going to be to create a lot of fracturing at the contact because they're going to behave quite differently. So you have a massive diorite pushing up and uniform and you've got all these shells that are just on the edges. Well, those edges are the host for the high-grade or bodies in Elorado East today. And uh uh uh those uh edges are also combined with the pyite in the the black shells. Great places for gold to drop out of solutions, find the fracture host areas, and drop out. So that's a long- winded explanation, but anyway, we have host areas that are created by folding. We have host areas that are created by the contact between the diorite and the country rock, and we're following up on those. And uh where we find them, we seem to be finding gold. >> It does seem to be kind of elongated though on the pictures that I see in the news release that you've provided. Um does that worry you in terms of uh the strip ratio and again this forward-looking but but yeah >> not really uh because if you look at not just the high-grade you know the the average 3 g area that that was uh pretty close to uh 100 meters across and we don't know the length of it or the details of it but that forms a pretty good beginning of an open pit. Then you look at what the wall rocks on on any kind of step down open pit are going to be. Well, the wall rocks are going to have a lot of zones of half gram type mineralization. And as I said earlier, if you're moving that stuff out anyway, even down to a tenth of a gram, uh you're going to put it onto a recovery pad of some kind. And the a very large percentage of that uh rock away from the 3 g area is in that category of of strongly mineralized and it's going to uh provide additional gold resource locally. Within that we've been finding some high-grade little areas in there that can be separated. Um I don't know if you ever been through one of the Nevada gold mines that's operating. uh what they actually will assay uh basically on a daily basis the faces and uh and they will uh designate where uh the rock is going. Is it going to the mill? Is it going to a leash pad? Is it going to a secondary lease pad? Is it going to the waste pile? And that way it's a very efficient way of getting maximum recovery versus cost in those situations. Uh again, long story short, it's going to be easy for an open pit to go down a long distance because of the volume of 3 g average material. And then the the sidewalls are going to be allowing it to go even deeper because they're economic in that operation. I don't know if they that got too long-winded and complicated, but long story short, yes, you can go very deep. Well, Ron, I've been out of my depth the moment we said hello. So, so it is it almost everything is is complicated for me, but that's kind of a me problem, not really a he problem. Um, pit wall stability in that case, uh, because you said it would be a good, you know, a good point for for starting off the mine. What is the um what's the competence of the rock there? Is it is it is it strong enough essentially to carry the pit slope here? >> Oh, yeah. and and there are very tight regulations on pit walls. Uh and you you start doing rock mechanic studies to make sure and uh the uh so a pit that's that's really shallow will have a much steeper pit wall because uh mechanically that's stable. you get the deeper you go uh the uh the flatter the whole operation the pit walls have to be to accommodate the the possible failure and uh in this case uh you can it's not a a dangerous situation because it's very much regulated a by the the governmental regulatoratory agencies and b by the studies that every company does on pit wall stability and engineering. >> Mhm. >> To that note, I was at Chuki Kamada in Chile years ago where they had a major pit wall failure on one side that was obvious uh for for not paying attention to those rules yet they mind through it and around it. So, it didn't pose a major hurdle to the mind. H well really why I'm asking this or where I'm coming from even though it is forwardlooking too early really to talk about that is kind of trying to get an idea of of how minable could potentially this thing be and and also because I do note that in hall 24 uh you terminated that due to what you called bad ground. What exactly happened there? Uh what happened there is uh we had a bladey uh uh rock you know from joining and stuff and soft rock in between which was probably near surface alteration of folk gouch and basically it was causing a problem. It's not going to be anything to do with pit wall stability or anything like that. It was a mechanical problem within the drill hole. We we they kept fighting that that rock that was coming in at a let's say the rock was like that and the drill was going down. That bladyy aspect of it keeps jamming in there and causing problems for the drill penetration. We finally just said enough of that. Let's just step over and drill the different hole which worked fine. >> Okay. Uh how's the um it's actually good to hear that it's that. I thought it might be something to do with water. How's uh how shallow is the water table here? It's variable, but it's normally at about 100 meters and it'll be quite handleable in any kind of mining operation. Some of the Nevada mines, for instance, run into groundwater at a much earlier stage and it's handled very inexpensively by pumping and again all of the the controlled pumping is tightly regulated for environmental protection etc. And uh in this case it will not be any kind of a problem for uh the mining operation. >> Yeah. Well 100 meters does does sound shallow on when when you think about it at first. Uh but it is something that there's other places in the world that I believe deal with less um some at at 40 50 even in Africa. Uh so I I I have seen that. Uh bottom line, Ron, what I'm getting from you here is that you're not worried about these results. You actually seem to to be happy with what's come out of the ground. Market seemed not so happy with the results at first. You traded a lot of shares before the news release um a couple of days and then on the day of the news release, pretty high volume there and and a bit of a drop in the price. I think some of that seems to be recovering right now as we speak. But do you think what happened there? I mean, do you think expectations were too high or what's causing the drop? And of course, how do you fix it? >> Well, that's not in my Bailey week, but in talking to our guys, uh, what they said happened is there were a bunch of people that bought on that first, you know, high-grade core hole. And they were waiting for more of the splashy news. Instead, they were getting meat and potatoes news away from that first uh plumbing system. and they they dumped because uh of that situation. The people that recognized what we were doing stayed in and they started buying back the shares at a new low price that they think is a great bargain at this point and that that's what's going on right now. uh the people that are knowledgeable are recognizing what we're doing and understanding the situation and acquiring while the people that came in for a quick bump and dump have been departing which I think is a long-term healthy thing for the company. H is that something that that do do insiders have the ability I suppose you have some some assets pending right now so you don't have the ability to be buying on the market now um but do you have the ability and the desire you and other insiders to be you know on the bid supporting the stock price >> uh no I actually I stay away from that completely on on one note I can tell you though on on my uh confidence in the company and the project is that my son for non company reasons needed to sell his shares that he had a half a million of and he was going to sell them to somebody else. I stepped in and and bought all half million shares because I thought it was at a price that was a bargain and going to get better and and I'm I'm not planning on selling but I did acquire those so that we had extra control on that aspect. Mhm. Talking about those assays, uh what else do you have coming? Where in the project is it from and when do you think we're going to see those assays? >> Okay, we have uh we've drilled 17 holes to date right now and that uh news was on the first 10. Uh we are still in uh most of the holes are still in that intermediate area. Uh trying to find out what's between uh the area one uh feeder area and heading west toward the area 4 and south toward the Herman feeder area. Uh so uh I'm expecting to get more results uh that are adjusting to the new model over the next couple of weeks and in the next two or three weeks. I don't know how quickly after that we can turn out the the news. Uh we're going to be getting results from the Herman area. >> Okay. The urban area is our next area that we think has a feeder system in it. And I'm expecting that that news should hit in September, October, and be at a good timing for very good news. >> Um, but but those holes were essentially predetermined. It's not like you saw what was coming out of the ground and then went and drilled the other seven holes or or because you said they're, you know, drilled with the idea of this new model essentially that you're working with or how were those holes drilled? >> Oh, well, actually these Yeah, these holes were predetermined right now for the the pattern of of infilling and stepping out with the new model. What we're doing is we're starting to adjust uh our drilling as it goes along and we have a planned program right now that is testing uh the Herman area. Then we have uh uh some holes planned up to the north to test that west area that we think may host another one of these uh feeder systems. And uh as a geologist, I had to throw in an area that uh IP showed up to be a really interesting target on the way by. And so we're testing that as well. So we we do have the next several holes planned right now. They're part of the expansion program. We got a new permit for 17 new pads stepped out quite a bit further than the original. And uh we are no longer limited to doing that that modest stepout. we can do some significant stepouts to our our mineral system. And I wish I had that map that shows this area that we're working in compared to our property position which has plastering and all kinds of evidence to suggest that the mineral system extends because you would understand that it's supposed to stamp on an envelope. The interesting part actually to that is that some of the stepout holes that I do see on that MA map, they seem to be coming closer to the property boundary. What if the system dips outside of your package? What do you what's outside of your package? What do you do then? >> Well, we have uh two things on that. First of all, uh the property owners on the sides have expressed willingness to deal. But, uh, when we looked at it, first of all, uh, our drilling program right now is going into the interior of our property because we like that area. Uh, to the west, uh, I I think it extends to the west, it extends to the east. But, uh, the most, uh, interesting mineralized part of that whole built that I was talking about earlier is that area covered by Elorado East. And we picked that up when it became available right off the bat. Uh because now we control that and at our leisure we could actually develop uh uh assuming everything goes the way that we expected to. We a mine could be developed on each of those two properties without acquiring anything else. But uh in a long-term operation obviously uh somebody out there is going to uh uh confirm that deal with the ranches and it'll all connect. Okay. From the coming holes that you have here, the the seven holes that are still outstanding, is any of that twinning of any historical holes or it being close to it? Where are they in relation to any historic stuff? >> Well, the the Herman the first Herman hole is close to a historic hole, but it extends way past that historic hole. So, uh we're we're testing the area and the others aren't. We're testing uh targets that are outside of the twinning situation into virgin ground, which I like. But yeah, the the first hole in Herman was sort of twinning for the upper part of the hole, but then we continued it past it and a long ways past it. >> Okay. Um and it's going deeper though, I assume, as well. Uh yeah, the historical uh went to 425 ft and we went to I think 910. >> Uh that's what is that 300 metersish. Yeah. >> Yeah. >> Okay. Um well, maybe to summarize here what you've told me so far, what is it that you'll be chasing from now on out? Like how do you how do you package it nicely that even someone like myself, you know, 75 IQ can kind of make sense of it? Well, I I first of all, I doubt that a whole lot, but anyway, what we're doing right now is establishing that we have a major gold system. Uh it we're doing the metallurgy testing coming up to confirm the recoverabilities are going to be excellent. uh uh we are uh going to do it on a systematic pattern spreading out from area one in Elorado West and uh that is going to be a major expansion because we see signs that we can do this over much larger areas than what we've been working on so far. uh at the same time we have uh started doing mapping and uh uh and sampling uh but mostly mapping and geohysics on Elorado East and extensions of Elorado West. We're going to be uh we have started the permitting process. In fact, we've submitted the the permits for Elorado East right now for drilling. That drilling program may not commence until next spring on Elorado East because of timing of winter coming and what we're doing on Elorado West. But uh it's going to be a systematic expansion of uh of a major gold system that we've just started on right now that I think is going to be better economics than most open pits in the world, better grade than most of the Nevada type open pits in the world. And uh I think we're going to be attracting a lot of attention as uh as this progresses. I don't know if that was an answer, but that's Yeah, you do seem to be getting a better handle on what the system might be. Uh so so is it too early to call it a a reduced intrusion system or is it starting to look more like a carlay and is it something else? What do you what's your best guess right now? Well, I don't compare it to one of the things I've learned is every system's unique and in a case like this where we had a diorite that I think is associated with a subduction zone, you know, which is a very specific type of diorite body coming into a carbonri shale environment. It created its own system and uh especially because we had a lot of gold, the fluids were so strong. By the way, as an aside, that in our core, we actually had visible gold that replaced mafic minerals with no solicification, no encapsulation in the rock without any visible means for the fluid to reach that place. So we have a strongly golden enriched uh highly fluidized diorite coming into rocks that uh that are trying to drop gold out of solution because of the carbon content. And uh I don't know how you what system I can think of anywhere that I've seen that quite fits that model. It it's a big diorite that has segments of roof pendant on top and roof pendants within that uh were part of the process. >> So is the assumption that there Oh, no. Go ahead. >> It's a low temperature system that are our geologist uh whose modeling thinks must be a distal part of of some kind of a porefree system. And I'm not going to argue with them on that, but it doesn't need to be. It's it's a low temperature system of gold minization that came in after the major alteration of that diorite. That major alteration of the diorite was pre- gold. Pre- gold comes in. After that, we had some falting in the area by based on a range faulting that came in later. But uh uh I can't uh put any other deposit that I've ever seen anywhere quite into this category. So I have to call it its own unique system. >> Mhm. So it's not because I was thinking how many intrusive pulses might have been here because it it's obviously multiple I think. Uh but but what are we really talking about here? And and really what I'm asking is because I'm trying to figure out how complicated is this thing for for you and the guys in the team to uh figure it out. >> Well actually there are some simple rules we're starting to develop. Uh gold is a good indicator. We're finding more potassium is a good indicator to take you to the gold few other things but our geologist that's mapping right now has indicated he can see at least three major pulses of diorite and placement in this. So it is a multi-pulse diorite and it's going to get even more complicated because it's going to tie into uh the diorites to the east. So, I think it's uh uh it's going to be interesting to try to sort out uh which pulses were most important to gold mineralization, but we're following the gold to begin with. And the lot a lot of the world's minds were mined out before they ever knew what the system was. They just uh the old engineers add it get on her and stay on her was follow the mineralization. And to some extent that's what we're doing right now. We're following the mineralization. We're using these other controls to step out and find new high-grade spots within an area that has intermittent constant mineralization. >> How's um money for you right now or how is it going to be at the end of the program? Well, right now uh when we pay all the bills, we have about 2 million uh left for uh continuing the program. And at that point, uh you'll have to talk to Rob on how that money is best spent. But we're not concerned with what uh we have and what's going on including uh uh what we're doing with our current in the lab results and drilling that we can refinance and continue to expand, but we want to do it in in the least diluting method. And obviously we can't answer that question right now. We have some companies that have approached us producers. We don't know where that's going to go at this early stage, but as as we expand the footprint and volume of this thing, I think those those could become more serious. Uh I'm a avoiding answering the question because I don't know at this point than Rob is probably the better one to answer that. Well, and maybe just directionally, um, you know, that two million bucks, what else does it or how far does it get you, uh, is what I'm thinking mostly from the perspective of when do you have to when are you going to have to raise money again? Uh, and also, this is uh worth pointing out is that you have some 60 million warrants, I believe, outstanding. There's over 10 million options. So, what's the date on that? Where does that come into play? >> Okay, I I'll have to go back and look again. That's not my category right now. But this 2 million will carry us through this year's program and uh obviously uh just if you think about it then we have to do a refinancing after this year's program. I think the results will allow us to do that next raise at much better terms than what we might imagine right now. But it also opens the door to considering other options. >> Mhm. But essentially, you think you don't really have to go back to the market for a normal private placement this year? That would be again forward-looking, but that would be your expectation then. >> I I don't expect that. No. >> Okay, good. Uh, what else do you have coming up this year? Is it Are you going to be doing any network or anything else in the meantime? That's kind of maybe an in between, but still an important piece of the puzzle. >> Oh, very much so. We're we are setting aside samples right now for MET testing to confirm. We've already done some the the historic companies did MET testing and we also have met testing results that were uh described in the literature from the Elorado East mines that happened out there and they all point to excellent recoveries. So if you switch gears and look at this from an economic standpoint, uh I I really like it. uh they had simple recovery methods, extremely good uh recoveries and and in this case we would have quick capital payout from that multigram start area and uh I think the economics is a better way in some ways to start looking at this property as well. >> Yeah. Yeah, that's going to be a very important important part of it as well. Um, what else do you have in planned in terms of um, marketing in the meantime? I don't see you on the Beaver Creek uh, list thing. So, I suppose you'd not be going to that, but what else are you going to be doing for marketing? >> Uh, that's a question for Rob. He's handling that. I won't tackle that. But, uh, on what else we're doing? We're doing mapping. We're doing uh, uh, we're going to do multi-element. We're doing some metal screens on this. We want to understand the details of the system and uh I'm hoping that we get a chance to do aerial mag over Elorado East because you know that will help us determine where the diorite bodies are hidden underneath those uh those blankets of plaster material out there. >> That's also something you can do year round if I'm not mistaken. So that's something you could do later on in the year potentially early next year as well. We can do it anytime. The that doesn't uh get affected by snow cover at all. >> So, yeah. >> Okay, good. Well, I'm starting uh to get a better idea. I think we're also going to be talking in the meantime. You know, I'm asking you about raising capital and so on and so forth. You said you're expecting it to take you through this year. I'm sure we'll talk before the end of the year, Rono. So, what is um what do you think is the most fair criticism of the Providence story right now? What's something that you know, you talk to investors often. What's something that you hear and you're like, "Yeah, that's kind of true." >> Yeah. I I think it was that the the most severe criticism we had was uh the uh results that were expected on this based on the early rounds. And uh the only answer to that is that we've adjusted the model and the system uh the the model that we have developed that is more accurate is going to allow a bigger system than what we had originally projected. And with apology, I think there's I I've been worried about this uh uh uh we called the kakott syndrome. And uh and when I was working in management in Kakott, we had the kakott syndrome. What that was was Kakott had the world's largest uh copper mine, you know, this huge hole in the ground. and and whenever a new project came up, they would always compare it to uh the the Kennot mine and obviously uh Bingham Canyon is a unique thing in the world being the world's best. So when we did our first drilling out there and hit that 175 m of 3 g, uh while uh we were ecstatic, we also I was very concerned that uh we're going to go out from this first feeder area into all of that area in between that has average grade material until we find our next feeder area maybe down in Herman in area four. And people are going to say, "Oh, that's a major disappointment. We're not getting more high grade. Well, it's it's bulk tonnage very good grade. And if we had drilled those without the first holes that we drilled, everybody would have been doing handstands. Instead, they were saying that's not 175 m of 3 g. And that was the disappointment that people need to get over and realize we're at the beginning of developing a major new gold system with all kinds of good economic characteristics. >> Yeah. What uh what is going on in in Oregon might be worth an update on uh because I I think that's where you live, right? >> Yes. >> Oh, >> yeah. I find a just why I bring that up is I I found an article a couple of days ago. It says uh it's called Eastern Oregon gold mine proposal se seven key impacts for 2025. And it's got kind of this big quote on on the front page of the article. It says um the gold mine proposal could impact over 10,000 acres of land affecting habitats and local economies. And so it's a whole, you know, it's a long article describing all of that. And then there's there's something about Knife River as well and the the water there and stuff like that. uh just kind of commenting uh on what's really happening in the Oregon, you know, mining and and exploration uh world. What is uh what are you seeing? What's happening on the ground? >> Well, what I'm seeing happening on the ground is uh very helpful. First of all, I I I do talk to one of the adviserss uh for Grassy Mountain and uh everything is in place. They're going through the mechanics. Uh they will have their final permit before the end of the year. They are doing additional drilling to start developing an open pit deposit instead of the underground deposit that they have completed the permitting on. Uh they also uh uh I was told by dogami Oregon's regulatory body that they have a swarm of applicants coming in for drilling. Uh there are several companies drilling different targets in Oregon right now. uh and uh they are expecting a flood of new activity in the state. We have finally reached that point where people recognize Oregon, Eastern Oregon is open for business in the mining community and I'm very happy that we are at the forefront of that. Right after Grassy Mountain, I think we have the most advanced project coming in behind and that is a great place to be. You you never want to be that number one because of all the trials and tribulations, but number two is a great place. >> That's a that's a first to be second type of thing. I >> exactly >> is is what you're getting at. Uh good. No, Ronald, that's been a good update. I think I've been through through most of it. I'm sure I'm forgetting some stuff and I'm sure that people listening to this will remind me of it so that I can ask you uh in our next conversation, what do you think I'm forgetting? What did you come here hoping to talk about that I failed to bring up? I can't think of anything. You're you're pretty darn good at what you do despite your own self criticisms. >> Well, I really do appreciate you saying that and I appreciate you sitting down with me. Thank you so much, Fitzy. >> And thank you. Okay. Always fun to talk to you. >> And as always, thanks to everyone for watching Resource Talks. I have a couple of more things to say though. The fact that this company was interviewed here today does not mean that they're necessarily a good or a bad company. I am not here to endorse nor attack anyone. I am simply here to ask some questions. 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