Canadian Residents

In Canada, a portion of the cash distributions paid by Provident to unitholders is generally taxed as investment income in the hands of the unitholder (the "taxable" portion) and a portion is generally tax-deferred (the "return of capital" portion). To get a better understanding of the taxability of the distributions we should explain how the cash flow is flowed to the Trust from its investments.

All of the cash flow remaining, after the amount retained to fund capital spending, bank debt repayments and contributions to the Reclamation Fund, is flowed to the Trust in one of three forms:

•  Firstly, a portion is designated as royalty payments on the Royalty;

•  Secondly, a portion is designated as interest payments on the Notes; and

•  Thirdly a portion is designated as principal repayments on the Notes.

The aggregate of these amounts is then paid out to the unitholders as a cash distribution.

For Canadian income tax purposes the royalty and interest portion are treated as a return on capital and taxed as investment income while the portion representing the principal repayment on the Notes is treated as a return of capital and is therefore tax deferred. It should also be understood that the portion of the distribution that is tax deferred reduces the unitholders adjusted cost base on the units of Provident that they hold and will ultimately be used in determining any capital gain or capital loss when the units are disposed.

On or before March 15 of the year following the tax year, Computershare Trust Company of Canada (Computershare) will prepare and provide all unitholders that received distributions during a calendar year a T3 - Statement of Investment Income for Canadian income tax purposes.

Non-Canadian Residents

For unitholders who are not residents of Canada for income tax purposes we encourage you to seek advice from a qualified tax advisor in your country of residence to advise you how the distributions will be taxed. In any event, monthly distributions paid to non-residents of Canada are typically subject to withholding tax at a prescribed at 25 percent pursuant to the Income Tax Act of Canada. This withholding rate may be reduced in accordance with the provisions of a tax treaty between Canada and the unitholders' country of residence. For example, in the case of the tax treaty between Canada and the U.S., the withholding tax rate for residents of the U.S. has been reduced from 25 percent to 15 percent.

U.S. Residents

The Canadian withholding tax on distributions to U.S. residents is 15 percent. Provident's transfer agent (or brokers in cases where the units are not held directly by the beneficial owners) withholds a non-resident withholding tax equal to 15 percent of each monthly distribution. As of January 2005, withholding tax will be collected on all taxable and non-taxable accounts. For the treatment of withholding tax on distributions prior to 2005, unitholders should consult with their tax counsel.

For U.S. federal income tax reporting purposes Provident is considered a corporation. As a corporation, Provident distributions to U.S. unitholders can be considered qualified dividends as determined under new U.S. Internal Revenue Code rules and U.S. Internal Revenue Service (IRS) reporting guidelines issued in 2003. For 2003 and subsequent years, Provident's distributions will be either qualified dividends and be eligible for the 15 percent tax rate or will be a return of capital.

To assist with the preparation of U.S. tax information Provident's transfer agent Computershare Trust Company will issue Form 1099 DIV's to all registered U.S. unitholders in advance of the IRS April 16 filing deadlines. Non-registered holders should receive a Form 1099 DIV from their broker or intermediary.