Management Discussion & Analysis

For the six months ended June 30, 2022

Page 1

This Management Discussion & Analysis ("MD&A") of Providence Gold Mines Inc. ("Providence", or the "Company") provides analysis of the Company's financial results for the six months ended June 30, 2022 and should be read in conjunction with the Company's condensed consolidated interim financial statements for the six months ended June 30, 2022 and with the Company's audited consolidated financial statements for the year ended December 31, 2021, which are available on SEDAR at www.sedar.com.

The condensed consolidated interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting ("IAS 34"). All amounts are expressed in Canadian dollars, unless otherwise stated.

Management is responsible for the preparation and integrity of the financial statements, including the maintenance of appropriate information systems, procedures and internal controls and to ensure that information used internally or disclosed externally, including financial statements and MD&A, is complete and reliable. The Company's Board of Directors follows recommended corporate governance guidelines for public companies to ensure transparency and accountability to shareholders. The Board of Directors' Audit Committee meets with management quarterly to review the financial statements and the MD&A and to discuss other financial, operating, and internal control matters. The reader is encouraged to review the Company's statutory filings on www.sedar.com

This MD&A is prepared as of August 11, 2022.

This MD&A includes certain statements that may be deemed "forward-looking statements". All statements in this discussion, other than statements of historical facts, that address exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guaranteeing of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements.

Overall Performance

Description of Business

The Company was incorporated on February 16, 2010 under the Business Corporations Act of British Columbia. It commenced operations on April 18, 2011. The Company is in the process of exploring and evaluating its mineral property located in California, United States. The Company's principal business activity is mineral exploration. It is a public company which trades on the TSX Venture Exchange ("TSX-V") under the trading symbol "PHD" as a Tier 2 issuer and trades on the OTCQB market under the trading symbol "PRRVF". The address of the Company's head office is PO Box 42096, Surrey RPO Guildford, Surrey, BC, V6C 2T5.

Property Activity

Tuolumne Property

On March 28, 2017, the Company entered into an agreement (the "Agreement") with Ellers Family Trust ("Ellers" or the "Optionor"), as amended April 24, 2019 (the "First Amendment") and May 24, 2020 (the "Second Amendment"), whereby the Company was granted a lease of claims comprising the Tuolumne Property (the "Property") and options to acquire a 50% working interest in the Property (the "50% Working Interest Option") or purchase 100% right, title and interest in the Property (the "100% Property Acquisition Option"). The Property includes six parcels and thirteen 20-acre mining claims. The Assignors have also staked a further 9 claims contiguous to the existing claims for a total of 6 patented and 22 located mining claims.

Management Discussion & Analysis

For the six months ended June 30, 2022

Page 2

To exercise the 50% Working Interest Option, the Company must:

  1. Pay US$25,000 to Ellers following regulatory approval of the Agreement (paid);
  2. Pay a further US$25,000 to Ellers (paid) and incur $250,000 in Property expenditures by March 28, 2018 (incurred);
  3. Pay a further US$50,000 to Ellers upon execution of the First Amendment (paid);
  4. Pay a further US$50,000 to Ellers (US$3,000 paid, with the remainder of the payment amount settled via the issuance of 1,000,000 Company common shares pursuant to the Second Amendment and incur $750,000 in Property expenditures by October 15, 2019 (incurred); and
  5. Incur $500,000 in Property expenditures during each of five one-year lease extension lease periods ending May 24, 2021, 2022, 2023, 2024 and 2025, pursuant to the Second Amendment. For any given one-year lease period, the Company may pay Ellers US$25,000 in lieu of incurring the required expenditures.

Upon earning a 50% Property working interest, the Company will form a 50/50 joint venture with Ellers.

As consideration for the Second Amendment, the Company shall issue to Ellers:

  1. 1,000,000 Company common shares within 30 days of execution (issued); and
  2. 200,000 Company common shares within 30 days after the commencement of a planned 3,900-metre drilling program on the Property.

Notwithstanding the terms of earning a 50% Property working interest, the Company may, at any time before the expiry of the Property lease period, exercise the 100% Property Acquisition Option and acquire a 100% Property interest by paying Ellers US$5,000,000, with one-half of this consideration payable in Company common shares.

Ellers shall retain a 2.5% net smelter returns royalty ("NSR") with respect to the Property, with the Company having the exclusive right and option to purchase 60% (1.5%) of the NSR for US$1,000,000 at any time up to and including 90 days after the Company commences commercial production on the Property.

The Company's negotiation of the Agreement with Ellers resulted from the assignment to the Company of rights and interests agreed to in a February 1, 2017 Summary of Terms between Ellers and third parties, including the Company's CEO and two arm's- length parties (the "Assignors"), by the Assignors. As consideration for the Assignment, the Company shall pay and issue to the Assignors the following consideration:

  1. Pay US$25,000 (paid) and issue 1,500,000 Company common shares within 14 days of TSX Venture Exchange approval of the Assignment (issued);
  2. Issue a further 1,500,000 Company common shares within 14 days following the completion of the first year Property work program of $250,000 (issued);
  3. Issue a further 1,500,000 Company common shares within 14 days following the completion of the second year Property work program of $750,000 (issued); and
  4. Issue a further 1,500,000 Company common shares within 14 days of the Company acquiring a 100% Property interest for US$5,000,000.

On October 19, 2019, the Company and Ellers entered into an agreement regarding the evaluation, milling, processing and reprocessing of stockpiles on the Property (the "Stockpile Processing Agreement"). Pursuant to the Stockpile Processing Agreement, the Company shall pay Ellers a 10% net profit interest of profit generated from these activities.

Environmental Protection Practices

The Company is subject to laws and regulations relating to environmental matters in all jurisdictions in which it operates, including provisions relating to property reclamation, discharge of hazardous material and other matters. The Company may also be held liable should environmental disturbances be discovered that were caused by former owners and operators of its properties and properties in which it has previously had an interest. The Company is not aware of any existing environmental matters related to any of its current or former properties that may result in a material liability to the Company.

A report on the Property was prepared for the Company by John Kowalchuk BSc., P. Geo, who is a qualified person for the purpose of NI 43-101. The report is available for review under the Company's profile on the SEDAR database at www.sedar.com.

Management Discussion & Analysis

For the six months ended June 30, 2022

Page 3

Property Description and Location

The Providence Mines Property is located in the Summerville Mining District, Tuolumne County, California, upon the eastern belt of the "Mother Lode" District. A number of high-grade, well known Motherlode gold mines of California are found within this belt, including the Black Oak Mine, the Soulsby Mine, the Dead Horse Mine, the New Albany Mine, the Star King Mine and others from which gold has been mined over the years. The Providence gold mines are located via good all-weather roads, three miles from the town of Tuolumne, and about 20 miles east of Sonora, California. The Property being optioned by the Company consists of the Providence Mines, the Consuelo Quartz Mine, the Goodenough Quartz Mine, the Bonita Quartz Mine and Mill Site, as well as several patented claims.

History

Historical documentation shows that these mines were for many years profitably worked and were regarded as one of the best mining camps on the eastern belt of the "Mother Lode" occurrences. The Providence Gold Mines properties are near the town of Tuolumne, California. Access is by a combination of paved and gravel roads. The two main areas known as the Providence and Consuelo, are on the patented lands under option to the Company. According to a 1931 newspaper clipping, production from the Providence Mine between 1901-1912 yielded ore averaging $18 per ton (gold at $20/ounce) to a total of $4,000,000. It is historically reported that owing to differences between the former owners and their then manager, the Property was shut down in the midst of active and profitable operations. At that time, 1916, the lower levels of the mines were allowed to fill with water, and the lower four levels never reopened according to available records. Thus, conditions of the mineralized bodies in these lower four levels are potentially in the same condition that they were when the operations ceased, at which time records indicated milling high-grade mineralization from the tenth and eleventh levels. At the same time development work had been completed on the twelfth level into bodies of mineralization. [Caution to reader: These historical results have not been verified by the Company and therefore cannot be relied upon.]

Mineralization

The veins of the Providence Mines are in black slates, lying parallel with each other at an angle of about 45 degrees, pitching toward the east. The strike of the vein is from South East to North West. The formation contains porphyry and limestone, the mineralized material is found in many places on these contacts, as often occurs in many mines. The mineralized material is found in lenses at varying distances along the veins. These lenses or shoots of mineralization have been opened up on various levels of the mine and a large amount of mineralized material extracted therefrom, although in many places in the mine these mineralized materials which have been historically reported have been worked in only one direction.

Development

A double compartment shaft was sunk to a depth of 1,470 feet on the dip of the vein. Twelve drifts were run north and south of the shaft on twelve different levels, the number 12 level being about 1,400 feet from the mouth of the shaft. From different levels, crosscuts were run east or west to develop and open up parallel mineralization shoots found in parallel veins. Some of these mineralized material and veins have been stoped out. In others there is said to be potential mineralized material still in place. A significant amount of underground work has been completed, developing and proving the property to be one of permanent formation and to contain well defined mined mineralization bodies of value. The Providence Group of Mines has not only been said to be a producer of mineralization in its historical past, there remains potential for similar untapped resources. The Providence Group of Mines has been historically identified and described as having identical similarities to many of the great mines within the "Mother Lode" gold district.

On May 16, 2018, the Company announced the final results of the soil sampling program completed at its Providence Gold Property located in the Eastern Gold Belt of the California Mother Lode Gold District. The results in the now completed phase one program successfully indicated a 2,200-metre-long by up to 900 metre wide area in which the Company's 2017 exploration outlined four past producing, north trending, east dipping, gold bearing veins. The soil sampling program, in conjunction with historical records, served as a basis for the planning and design for the initial drill program.

In late 2018, the Company began preparations for a drill program at its Providence Gold Property. Roadwork to provide access for the drill program began in mid-December. Due to weather stoppages, the access road was not completed until April 2019. However, road construction revealed surface mineralization that has been sampled and submitted for analysis.

Weather delays allowed sufficient time to commission Ray Geo Consulting of Vancouver, B.C. to complete a 3-D model of the historical, mined long section using the previously completed 3-D laser imaging of the access adit, surface geology, geochemistry, and surface and underground sampling. The refinement of the existing geological model, using the new 3-D geological model, provided greater confidence in the selection of drill site locations and targets.

Management Discussion & Analysis

For the six months ended June 30, 2022

Page 4

In April 2019, the Company announced completion of the access road and commencement of the near-surface drill program. It was the first drill program ever performed on this past historical high-grade producer. The first phase of a planned two- phase drilling program was designed to intersect the Providence vein system near surface and along strike. Comprising 13

diamond drill holes, phase 1 drilling has extended the zone to the north for a distance of

300 metres (1,000 feet), leaving an

additional 1,000 metres (3,280 feet) strike length to the north end of the property where

the Bonita adit is located. Overall,

the first-phase drill program results are very encouraging, having confirmed the location of the Fairplay vein system at surface and enabling the company to focus on the structural controls of the mineralized shoots.

Additional work was completed to gain road access to several high-priority targets - including the Mexican and McCarthy veins - during its second phase of drilling. The Mexican and McCarthy mines reported historical recoveries of four ounces of gold per ton and five ounces of gold per ton, respectively, and have only been mined to a 100-foot depth (30 metres). Underground drifts from the Providence workings had been planned, but not completed, prior to shut down in 1916. [Caution

to reader: These historical results have not been verified by the Company and therefore cannot be relied upon.]

In August 2019, the Company announced that it had completed detailed mapping and trenching of the first of several potential gold stockpiles. Two trenches within the gold stockpile discovered valuable information with regard to strong alteration within this part of the property. Over 100 samples were collected and sent to the Sparks Nevada laboratory, and for thin-section whole rock analysis to the University of British Columbia.

The initial results are extremely encouraging, as there is a potentially significant volume of material containing good gold values. Given these recent assay results the Company is now confident that historically mined and milled material has not been reprocessed, and that the stockpile represents a significant potential cash flow opportunity for the project -- especially given the current rising price of gold.

To delineate the area covered by the stockpiles, the Company commissioned and completed an airborne lidar survey along with

a high-resolution (0.5 metre) surface image. The previously calculated area of the stockpile was 2,683 square metres. As a result

of the newly conducted work, the area is now measured to be 8,200 square metres with a depth

on the southeast side of

approximately 15 metres and an approximate depth of 25 m on the southwest side. To accurately

project the volume of the

stockpile material, ground-penetrating radar is being planned.

Drill hole PM19-05 and the surrounding area was excavated at surface to expose the vein which was then systematically chip

sampled by continuous channel samples along strike for 7.5 metres.

The assay results were very encouraging, as follows:

From

To

Wgt

Au

Sample #

Type

(m)

(m)

(Kg)

(g/t)

2981458

Qtz vein PM19-05

0.00

0.50

3.70

1.115

2981459

Qtz vein PM19-05

0.50

1.00

2.02

17.40

2981460

Qtz vein PM19-05

1.00

1.50

5.44

0.484

2981462

Qtz vein PM19-05

1.50

2.00

2.73

1.129

2981463

Qtz vein PM19-05

2.00

2.50

4.40

0.612

2981464

Qtz vein PM19-05

2.50

3.00

3.50

0.322

2981466

Qtz vein PM19-05

3.00

3.50

5.68

1.332

2981467

Qtz vein PM19-05

3.50

4.00

3.58

0.811

2981468

Qtz vein PM19-05

4.00

4.50

3.03

0.467

2981469

Qtz vein PM19-05

4.50

5.00

4.93

5.061

2981470

Qtz vein PM19-05

5.00

5.50

4.34

1.818

2981471

Qtz vein PM19-05

5.50

6.00

7.51

4.557

2981472

Qtz vein PM19-05

6.00

6.50

5.90

2.183

Qtz vein PM19-05

6.50

7.00

3.61

0.665

2981473

2981474

Qtz vein PM19-05

7.00

7.50

5.43

1.509

Management Discussion & Analysis

For the six months ended June 30, 2022

Page 5

Environmental Protection Practices

The Company is subject to laws and regulations relating to environmental matters in all jurisdictions in which it operates, including provisions relating to property reclamation, discharge of hazardous material and other matters. The Company may also be held liable should environmental problems be discovered that were caused by former owners and operators of its properties and properties in which it has previously had an interest. The Company is not aware of any existing environmental problems related to any of its current or former properties that may result in a material liability to the Company.

Dr. Lee Groat Ph.D., P.Geo. is the Company's qualified person (as defined under NI 43-101) and has approved the technical information contained in this MD&A.

Results of Operations

Six Months Ended June 30, 2022

The Company reported a net loss of $191,840 for the six months ended June 30, 2022, as compared to a net loss of $310,617 for same period of the prior fiscal year.

General and administrative expenses for the six months ended June 30, 2022 totaled $191,642 (2021 - $310,007). The main variances were: marketing of $5,000 (2021 - $26,000), office, rent and administration of $13,517 (2021 - $57,419), shareholder communications of $9,147 (2021 - $36,892) all due to the cost-saving initiatives in the current period; and stock-based payments of $nil (2021 - $32,300) due to the issuance of 475,000 stock options in the same period of the prior fiscal year.

Three Months Ended June 30, 2022

The Company reported a net loss of $93,221 for the three months ended June 30, 2022, as compared to a net loss of $143,768 for same period of the prior fiscal year.

General and administrative expenses for the three months ended June 30, 2022 totaled $93,221 (2021 - $143,622). The main variances were: marketing of $nil (2021 - $15,000), office, rent and administration of $3,453 (2021 - $36,060), shareholder communications of $7,711 (2021 - $10,873) all due to the cost-saving initiatives in the current period.

Summary of Quarterly Results

The following is a summary of the Company's financial results for the eight most recently completed quarters:

Net

Basic and diluted

Revenue

income (loss)

income (loss)

($)

($)

per share ($)

Q2 2022

-

(93,221)

(0.00)

Q1 2022

-

(98,619)

(0.00)

Q4 2021

-

(205,174)

(0.00)

Q3 2021

-

(129,685)

(0.00)

Q2 2021

-

(143,768)

(0.00)

Q1 2021

-

(166,849)

(0.00)

Q4 2020

-

(181,332)

(0.01)

Q3 2020

-

(381,362)

(0.01)

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Providence Gold Mines Inc. published this content on 30 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 August 2022 17:29:05 UTC.