Ethos Gold (TSX-V: ECC) CEO Craig Roberts on Why the Carlin-Style Project at Iron Point, Nevada Has the Potential to be a Company-Making Discovery

May 21, 2019

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Ethos Gold (TSX-V: ECC)(OTC: ETHOF), Mr. Craig Roberts. Craig, how are you today?

Craig Roberts: I'm great thanks, Gerardo. Really well. How are you doing?

Gerardo Del Real: I am excellent, it's good to catch up. It's been a little bit over a month and a half since the last time we spoke. The last time you and I had a conversation, I hinted to the fact, and you mentioned, that the company had a healthy cash position, that it was looking to deploy by bringing in accretive, attractive projects with the potential for large-scale discoveries.

You've obviously been busy, the stock took a bit of a hit the last month on lack of news. But things are all of a sudden picking up quickly. Stock is up 40% today on news that Ethos will be drilling a Carlin-style gold target at Iron Point, Nevada with a 50% earn-in with Victory Metals. You also added a pretty big name as a technical consultant on the project, Mr. Quinton Hennigh, who will be running that drill program.

So, I want to start there. And then we can talk about B.C. and Mexico, but obviously the news that you'll be drilling this Carlin style gold target has been very well received by the market. So congratulations on that deal. Can you provide some details, Craig?

Craig Roberts: Yeah, happy to, Gerardo. We are very excited by that project. A little bit of history, the Iron Point is actually at the intersection of the Getchell trend and the Battle Mountain trend in Nevada. It's about 20 miles east of Winnemucca. It's a project area that's been recognized historically and had a lot of work done, actually historically exploring for gold. There's a very large, sort of indicator, geochemistry footprint there. Gold been found in quite anomalous amounts on surfaces and in trenches and historically it's been drilled by a number of the major companies. It's been drilled by Newcrest, by Aur Resources, Newmont Santa Fe.

So there's a lot of work been done and Quinton Hennigh, who you mentioned has now joined us as a technical advisor, was actually involved in a number of programs. He drilled at Newcrest and Aur Resources, for example, historically. One of the big breakthroughs was Quinton's done some fossil analysis of what's called the Comus Formation there. It was always mapped as Upper Plate or Ordovician stratigraphy. The work that Quinton did showed definitively that it's actually Devonian and therefore sort of Roberts Mountain Popovich Lower Plate stratigraphy.

While that may be a bit technical, it's extremely significant in terms of the prospectivity for gold and a very important fact that's resulted in the re-interpretation of the area. Based on that, based on the historic surface exploration that I mentioned, and then also based on a number of intercepts through historic drilling, Quinton's come up with a model for Iron Point which is actually very similar to the model at Newmont's Twin Creeks mine, which is about 25 miles north of Iron Point. It's basically Lower Plate rocks that have folded into a Zed fold up against range front fault. There's actually a section in our news release that shows that. All of that historic work, Quinton's involvement and expertise and the re-interpretation has led to the definition of this new target.

Based on all of that, we've got three vertical holes planned that will be drilled between 500 and 800 meters of depth. Those holes will drill through the Upper Plate into the prospective Lower Plate rock near the range front. Obviously, we're very optimistic that we'll find something. We'll drill those holes and hopefully we do find a Carlin style deposit down there. Obviously no guarantees, but we think it's a pretty exciting shot at a discovery.

Gerardo Del Real: Excellent. So just to be clear, Ethos can earn up to 50% undivided interest in the gold and the silver rights. Correct? By spending $5 million over 3 years, although the initial expenditure will be a million dollars Canadian in the first year and I'm assuming that that's obviously going into this drill program. So just breaking it down to the most simple denominator here. You're going to spend about a million or so Canadian to figure out if you've got one of these large Carlin style deposits at depth. Is that accurate?

Craig Roberts: That's exactly right. That's sort of the budget for the first three holes I mentioned and that will really answer the question as to whether this target is actually a big gold deposit down there.

Gerardo Del Real: Now you mentioned the historic work that's been done by Quinton and I understand that there's been pretty significant gold mineralization that has showed up in surface trenches and that's interpreted to be leakage from deeper levels, which kind of speaks to the reason why you're doing these 500-800 meter holes. Right?

Craig Roberts: Yes. It's certainly a significant part of the picture. There's a number of elements in very high concentrations that are typically distil from this type of deposit at surface and then there is gold in trenches as well. Some of the historic drilling has intercepted long intervals of actually quite significant gold mineralization, not economic grades, but nonetheless quite significant.

The other thing is one of the historicals intersected actual Carlin style gold mineralization in the range front faults and it was interpreted to be gauge material, which is kind of like ground up material in the faults, that was also interpreted to be kind of moved up from a deeper level. So Carlin style mineralization has actually been intercepted to some extent in some of this historic drilling. It's putting all of these pieces of evidence together, if you like, that has led to the definition of this target.

Gerardo Del Real: Excellent, and I understand Quinton is running that program. Correct?

Craig Roberts: That is correct, yeah. Absolutely. He's actually already located the three holes. Victory Metals has a vanadium project there that they have a current drill program on. So we're actually fully permitted already to drill and we haven't quite yet finalized our plans for drilling. But without giving a particular timeframe I'd say that it's possible we could be drilling in actually quite a short timeframe, drilling these deep holes.

So it's not going to be a long period of waiting for permitting, etc. I think we'll have an announcement on that soon, but we have the opportunity to drill fairly quickly there.

Gerardo Del Real: Wonderful. So drill program upcoming in Nevada. The last time we spoke, we talked about the surface trenching in Mexico. I understand that's progressing slowly but surely and I understand that once you compile all the data, you'll be following that up with a targeted drill program there. Is that correct, Craig?

Craig Roberts: That is correct, yeah. We're just in the process of finally compiling all the trench information. We've had our initial discussions with the driller. He's actually able to mobilize very quickly. We're going to do all of our homework on the trench work first and hope to have that information out to the market fairly soon.

Gerardo Del Real: Fantastic. Last but not least, you also optioned the Perk-Rocky copper-gold porphyry project in B.C. This is an earlier stage project, but it is a big one.

Can we talk about the potential here and kind of what the approach is going to be? Because I know it's a project that historically has garnered a lot of interest from mid-tiers and majors, frankly.

Craig Roberts: Yeah, it is about 220 kilometers to the west of William's Lake, south-central B.C. It is in terrain, sort of in the Golden Triangle area, the area that's prospective for these type of copper-gold porphyry deposits. On the property, there's a very large hydrothermal footprint. There's various types of mineralization there, including copper-gold at surface. The ASTER, I believe it's satellite ASTER, imaging has shown the gossans and alteration areas that you would anticipate for this type of big porphyry system, high levels of that type of system.

It is early days, as you said. It's early stage. The footprint that we see is very big. The initial phase of work will be detailed airborne geophysics and also at the time same we'll be doing sampling and mapping on the ground. So that will be the first phase of work. As you say, we do know that there's been some pretty strong interest from some larger companies in the project. So we'll move it through the first phase of work and then make a decision after that phase as to our next phase of work on the project.

Gerardo Del Real: I understand the plan is to use about $350,000 Canadian for extensive geophysics and ground mapping and sampling. Is that correct?

Craig Roberts: That is correct, yeah.

Gerardo Del Real: Excellent. Well, Craig, what was a very quiet story for a couple of months all of a sudden is a very, very busy story. So congratulations on keeping busy behind the scenes and fingers crossed that out of the multiple drill programs that you plan on executing this summer that we find some gold. Right?

Craig Roberts: Yeah, absolutely. We're excited and I think we certainly went into a little bit of a news vacuum there after we had the vanadium project, which was put into a moratorium area so we had to kind of regroup and spend some time pursuing some of these other opportunities. But we're very excited and I think there's going to be actually a very strong news flow going forward here.

Gerardo Del Real: To be clear, all of these exploration and drill programs are fully funded by the treasury. Correct?

Craig Roberts: Yeah, we currently have about $6.8 million and, if I've done the math correctly, about $0.12 per share in cash still. We'll have significant amounts of cash even if following the completion of everything we have planned, we've only used up a small portion of our cash, actually.

Gerardo Del Real: I got to believe in this tough, tough resource market it's got to feel good to have that kind of cash position which enables you to execute these kind of deals. Are you still looking, if you find the right asset?

Craig Roberts: Yeah, we definitely are very selectively looking at other opportunities and ones that will be complementary to what we already have. There's no question that it's an extremely tough environment right now for companies to raise money, so it definitely puts us in a strong position for other opportunities. As I say, we'll be very selective, but we're looking to capitalize on the money we have and really try and generate shareholder value.

Gerardo Del Real: Well, it's a tough market, but I've got to say I'm a happy shareholder and I can't wait for drill results here as the programs start and come and go, frankly.

Craig Roberts: That's great, Gerardo. Great to have you on board, too.

Gerardo Del Real: Thank you, Craig.

Craig Roberts: Okay, great. Thank you.

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