Dear Shareholder,

After visiting the project in August, during our recent exploration program, I will reiterate our enthusiasm for its potential. My site visit coincided with that of Douglas Hutchison, the independent qualified person who we engaged to author the NI 43-101 technical report.

Exploration results thus far point towards Kuta Ridge hosting an epithermal-style gold deposit that merits further exploration given the varied styles of gold mineralization present and the high grades encountered on surface during current and previous exploration work. Please note that this report is meant to be read in conjunction with the attached presentation containing important figures.

Going Public Milestones
Below are the milestones completed and in progress which moving along in parallel with our exploration work.

Minimum Spend as per Listing RequirementsComplete
Initial NI 43-101 ReportComplete
Submission of ReportComplete
AuditIn Progress
Preliminary Exchange ApprovalComplete
2020 Q1 Financing / Going Public ProcessUpcoming

Pacific Precious Exploration Results from Summer 2019
Our exploration program followed up on 2018’s sampling which delineated the 6km long, north-south trending gold corridor. For this program we had two teams, one team focused on the Koitman Creek upstream from the 238.0 gpt sample found in 2018 (the Kuta Ridge Trenching Area) and the other team carried out trenching on the southern slope of Kuta Ridge (Southern Trenching Area) (Slide 1). Numerous gold veins in bedrock were found over a North-South strike length within the 6.0km strike where we identified four distinct types of high-grade gold mineralization along the trend:

  1. Low-sulphide veins. Most veins in the Southern Trenching Area are of the low-sulphide variety and trend North-South and are steeply dipping. Widths range from a few centimeters up to 0.5 metres (Slide 3). Trenching in this area uncovered a 7.0 metre channel interval grading 1.56 gpt gold (including 1.0 metre sample returning 5.93 gpt gold in a quartz vein). Beside this trench, a float of quartz-arsenopyrite assayed 30.1 gpt gold.
  2. High-grade quartz-arsenopyrite veins and breccias. These are found in both float (loose rock) and outcrop (bedrock) and contain the highest grades on the property, including the 238.0 gpt gold in grabs of the boulders encountered in the south facing Ambi Creek (Slide 4). Similar veins occur at the tops of both sides of the Kuta Ridge with results up to 28.6 gpt gold over 1.5 metres.
  3. Sulphide Veins with Massive Pyrite, including a 0.5 metre wide, north-south sulphide vein along the trace of the Joy Lode which contained massive pyrite in pods and returned 14.5 gpt gold over 0.15 metres (Slide 5).
  4. High-grade ribboned and brecciated quartz-pyrite veins, with abundant visible gold (Slide 6). Found as float on the south side of Kuta Ridge near the top of Koitman Creek. These boulders can be large and contain a lot of visible gold and occur along with the quartz-arsenopyrite boulders suggesting multiple phases of veining within the same system.

Compilation of Historical Work
Our recent program included a detailed compilation of historical work on the property. Exploration was conducted in the late 1980s and early 1990s by Picon and Kennecott, and included stream, outcrop and float sampling. Picon conducted an IP geophysical survey over Kuta Ridge and drill tested (four holes, 608 metres—Slide 8) some resistivity anomalies, with one hole returning 1.6 gpt gold over 10.2 metres, including 66.0 gpt gold over 0.3 metres in a quartz-arsenopyrite vein. Kennecott conducted stream sediment sampling which confirmed the Picon anomalies and also identified additional targets. Kennecott also drilled four holes for 664 metres, with one hole intersecting string alteration starting at 80 metres but abandoned at 110 metres (Slide 9).

New Zone Discovered
We uncovered previously unknown mineralization along the lower part of Koitman Creek at an elevation of ~1,650 metres above sea level (370m below the crest of Kuta Ridge). This is significant as it demonstrates that fluids boiled over a large vertical range, providing potential large range of gold deposition. We have two primary areas of focus corresponding to the north-south trending Kraip and Joy lodes. We believe these two structures were the source of alluvial-eluvial gold in the original Leahy Brothers’ mine. The highest gold grades found on the project have also been shown by Pacific Precious to be related to these structures.

Moving forward, our priority is to identify the source of the high-grade quartz-arsenopyrite and quartz-pyrite visible gold boulders on the Southern trenching area. We have identified six targets for further prospecting and trenching (Slide 2) as part of our next phase of exploration.

We are very encouraged with the results to date as we continue to develop our understanding of the geological and structural controls of the epithermal system at Kuta Ridge. Subsequent phases of exploration will include further prospecting and trenching, and drilling with the ultimate objective of delineating a multimillion ounce epithermal gold deposit on the Kuta Ridge property.

We will continue to inform shareholders of our progress in a timely manner.

Charles Beaudry, M.Sc., P.Geo., géo.
CEO and Director, Pacific Precious