VANCOUVER — Pilot Gold’s (TSX: PLG; US-OTC: PLGTF) large TV Tower property in Turkey has returned a stream of promising drill results over the past few months, including well-mineralized intercepts from the project’s silver zone and a high-grade gold-silver-copper hit from the adjacent KCD zone.
While Pilot president and CEO Matt Lennox-King has been happy to see those drill results, it turns out he is more excited about what his mappers and soil samplers are finding.
“We’ve been doing a comprehensive surface program across the entire project — mapping, sampling and geochemistry — and what’s come out of that work is the next round of targets,” Lennox-King said in an interview. “Those run from bulk-tonnage gold targets to low sulphidation veins that are more your bonanza-style targets. And it’s that future or district potential at TV Tower that really has us fired up at this point.”
TV Tower is in northwestern Turkey’s Biga district. The volcanic rocks that cover the 90 sq. km property underwent extensive hydrothermal alteration that created numerous prospective targets for gold, copper and silver.
A first-pass drill program in 2010 produced the Kucukdag (KCD) and Kayali discoveries, which are both epithermal gold targets. Pilot itself was not born until the next year, when Newmont Mining (TSX: NMC; NYSE: NEM) bought out Fronteer Gold for its Long Canyon gold project in Nevada. Pilot was spun out of the deal to hold 14 of Fronteer’s other properties. Most of Fronteer’s management and technical personnel moved to the new vehicle as well.
Pilot has since uncovered another half-dozen targets at TV Tower, though KCD and Kayali remain the prime foci. A 14,400-metre drill program at KCD last year returned short, high-grade intercepts, such as 227 grams gold per tonne over 12 metres, as well as long mineralized hits like 5.94 grams gold over 137 metres. The work at KCD also revealed a near-surface zone of silver-only mineralization.
Pilot’s drills are probing the silver zone, and the latest results have expanded the zone to measure 600 by 600 metres. One of the stepout holes that drove the expansion was hole KCD-151R, which returned 90.2 grams silver per tonne over 91.5 metres, starting from 91 metres downhole.
Another stepout hole hit 61.5 metres grading 43.6 grams silver, starting at 158 metres downhole. Infill work also returned consistent silver mineralization: hole KCD-148 cut 77.5 metres grading 51.4 grams silver, while hole KCD-157 returned 95.2 metres grading 37.2 grams silver. The best intercepts from the previous set of silver zone drill results included 327 grams silver over 14.5 metres and 71.7 grams silver over 53.9 metres.
The silver zone partly overlies the gold-silver-copper target at KCD, and one recent hole — KCD-164 — hit into high-grade mineralization in the northwest of the main KCD target. Starting 90 metres downhole, the drill cut 5 metres grading 6.99 grams gold, 150 grams silver and 10.1% copper.
The result follows Pilot’s late July news of a longer and better mineralized intercept from KCD Main: 15.3 grams gold over 45.2 metres in KCD-142. The intercept included 1.5 metres grading 386 grams gold in a segment, and Pilot says it is similar to the high-grade interval in hole KCD-50, which cut 227 grams gold over 12 metres. KCD-50 was drilled 120 metres south. Pilot says the two intercepts show the “excellent continuity of high-grade mineralization in this area.”
Pilot drilled 67 holes at KCD this year. With that program nearly complete the drills are moving 8 km south to Kayali. Initial drilling at Kayali in 2010 produced such results as 0.87 gram gold over 114.5 metres, essentially from surface. By 2011 Pilot had proven persistent, near-surface gold mineralization at Kayali that oxidized to 200 metres depth.
The shallow oxide gold zone at Kayali offers stacked vuggy silica, massive silica ledges and argillic alteration over an area measuring 2 by 1.5 km. This year Pilot is using its drills to infill areas along the southern margin of the silica cap — a “rib” that is well-defined in terms of mapping and sampling — but that has seen limited drilling. Drills will also test for parallel ribs within the silica body to the north.
Even though TV Tower is a large land package with multiple targets, the Kayali zone is showing enough promise that Pilot recently signed a deal to expand its holdings in the area — which had stood at 70 sq. km — by another 20 sq. km. The new area, called Karaayi, abuts TV Tower to the southwest. Pilot bought the lands from Chesser Resources (ASX: CHZ) for 1.25 million Pilot shares, issued in stages, and US$300,000.
“Karaayi is the strike extension of what we see going on at Kayali,” said Lennox-King, when asked why Pilot wanted the ground. “In the limited work that Chesser did — and they did some good work — they produced some of the strongest gold-in-soil anomalies in the entire district, and to us that’s significant, because there is a really strong correlation between soil anomalies and underlying bedrock mineralization. So you can think of Karaayi as one of the missing pieces of the TV Tower puzzle.”
Karaayi came to Pilot with a permit for 96 drill platforms, and Pilot plans to take advantage of the property’s drill-readiness by mobilizing there shortly. However, drilling is just one of many exploration activities ongoing at TV Tower, all of which Lennox-King sees as important.
“When you have a property the size of TV Tower you have clear short-term opportunities, like KCD or Kayali, but it’s bringing up the next wave of targets that I think is really critical to defining a district,” Lennox-King said, adding that despite its importance, early stage exploration alone cannot sustain a company’s market momentum. “In our current investing environment the investing public is not going to pay for grassroots exploration, even though it’s a critical part of the whole continuum.”
Pilot holds a 40% stake in TV Tower but acts as project operator, pursuant to a deal that is enabling the company to boost its interest to 60% by funding $21-million worth of exploration over three years. Teck Resources (TSX: TCK.B; NYSE: TCK) holds the other 60% through its Turkish subsidiary Teck Madencilik Sanayi Ticaret.
On the other side of the world, Pilot Gold owns 78% of a large gold property in Nevada’s Long Canyon trend called Kinsley Mountain. A subsidiary of Nevada Sunrise Gold (TSXV: NEV; US-OTC: NVSGF) holds the remaining 22%. Pilot operates the project but the company had been limited to one reverse-circulation drill at Kinsley this year until late August, when the U.S. Bureau of Land Management approved a plan of operations permit for the project.
With the new permit in hand Pilot has moved two more drills to Kinsley and plans to complete 20,000 metres of drilling over the next few months. The drill plan will follow up on Pilot’s drilling successes at Kinsley in 2011 and 2012. Those programs produced best results of 6.03 grams gold over 13.7 metres, 5.48 grams gold over 20.4 metres and 9.5 grams gold over 4.6 metres. The effort defined gold mineralization along 2.2 km of strike.
“We had some really key successes in 2011 and 2012 testing the extensions to mineralized bodies at Kinsley, and that’s really the plan this year: to continue to grow things, continue to step out — but also to test some of what we think are really exciting outlying targets as well,” Lennox-King said.
Kinsley is a historic mine site located 80 km southeast of Long Canyon, Fronteer’s flagship gold discovery. The old mine produced 138,000 oz. gold from oxidized ores, but historic exploration and mining never extended below 65 metres depth. The gold at Kinsley occurs in oxidized stratabound zones and fault-collapse breccias within a sequence of shelf carbonates, similar to other Carlin-style, sediment-hosted gold systems in the area.
Pilot’s third major project is a 40% stake in Halilaga, a copper-gold porphyry located 20 km southeast of TV Tower. Pilot and project partner Teck completed a preliminary economic assessment for Halilaga in 2012. This year the companies are following up on the recommendations from that study.
Pilot’s share price struggled in 2013, falling from $2.35 at the start of the year to a 52-week low of 71¢ in June. It has since recovered to sit near $1.10.
“In spite of what’s been a challenging year in the markets across the sector, I think the work we’ve done at TV Tower and certainly on the permitting front and now on the ground at Kinsley — it’s all been very productive,” Lennox-King said. “We’re seeing the things that got us excited about these assets in the first place . . . we still see in Nevada and in Turkey that district-scale potential that we always look for. So it’s been very, very encouraging.”
Pilot Gold has approximately $27 million in the bank. The company has 87 million shares outstanding.
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