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TABLE OF CONTENTS Feb 10 - 16, 2014 Volume 99 Number 52 - 0 comments

Pilot Gold uncovers porphyry potential at TV Tower

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By: Gwen Preston
2014-02-05

VANCOUVER — With a 4,900-metre, four-month drill program, Pilot Gold (TSX: PLG; US-OTC: PLGTF) has transformed the potential at its TV Tower project in Turkey from an interesting oxide gold target to a possible porphyry district.

“We started out with a big, near-surface oxide gold trend about 4 km long, and to our mind, the kind of project that’s attractive in any market,” said Matt Lennox-King, Pilot’s president and CEO in an interview. “What we’ve seen evolve over the course of our recent program is that you have a remobilized or supergene copper zone beneath your gold zone — a thick blanket ranging anywhere from 0.35% copper to well over 1% copper.

“That’s pretty exciting in itself, but what’s really been cool is the recognition of the porphyry potential at K2,” Lennox-King continued. “In a number of drill holes you have long runs of porphyry copper–gold mineralization underneath the supergene. For a geologist, it’s almost like you have your geology textbook and you’re looking at a cross-section of a collapsed epithermal porphyry system.”  

K2 refers to the copper–gold trend Pilot is defining between the Kayali and Karaayi targets, which sit 3 km apart in the southern end of Pilot’s TV Tower property. Half of the trend is new to Pilot, which added the 20 sq. km Karaayi project to TV Tower through a September deal with Chesser Resources (ASX: CHZ).

Chesser’s work indicated Karaayi hosted the strike extent of the Kayali target. Chesser had also been granted a drilling permit for the project, which meant Pilot could get to work sampling and drilling immediately.

Over the next four months Pilot punched 17 drill holes into Kayali and five into Karaayi, while also completing a soil-sampling grid. The results suggest the new K2 trend could host two or more copper–gold porphyry systems.

No single hole cuts through all three zones, as the zones are somewhat offset. At Kayali, for example, the supergene copper zone is offset to the north of the oxide gold zone.

Recent drill results from the oxide gold zone include 119.8 metres grading 0.8 gram gold from Karaayi, including 2 grams gold over 35 metres, and 33.1 metres averaging 1.96 grams gold from Kayali, including 3.42 grams gold over 17.4 metres. The best previous gold oxide intercept was 3 metres grading 15.9 grams gold from surface at Kayali.

The best result from the supergene copper blanket came in hole 39, which returned 1.29% copper over 34.1 metres from the Kayali target. Other supergene intercepts include 0.63% copper over 41.7 metres in hole 5 at Karaayi, including 1.07% copper over 21.8 metres, and 0.35% copper over 65 metres in hole 43 at Kayali.

Intercepts from the underlying porphyry systems were generally longer and carried lower copper grades, while adding gold back into the picture. For example, hole 2 returned 224.8 metres grading 0.3% copper and 0.13 gram gold, while hole 4 intercepted 154.4 metres averaging 0.16% copper and 0.18 gram gold. Both holes were drilled into the Karaayi target.

While its drills were turning, Pilot was also collecting soil samples from across the Karaayi land package. The results outlined a large gold and copper-in-soil anomaly 1 km southwest of Karaayi. The anomaly strikes 1.2 km and averages 400 metres wide. Individual soil samples from the area graded up to 0.16% copper and mapping outlined porphyry alteration in outcrop.

Lennox-King says the area will be a “focus going forward,” with initial drill testing planned for later this year.

The TV Tower project is in northwestern Turkey’s Biga district. A first-pass drill program at the property in 20 10 outlined the Kucukdag (KCD) and Kayali discoveries. KCD remained the main target at TV Tower over the next two years, which recently culminated in an initial resource estimate.

KCD was divided into a lower gold zone and an overlying silver zone. The gold zone hosts 11.6 million indicated tonnes grading 1.22 grams gold, plus 1.7 million inferred tonnes averaging 0.85 gram gold. The silver zone is home to 11.4 million indicated tonnes grading 46.7 grams silver per tonne, plus 9.1 million inferred tonnes averaging 52.7 grams silver.

Pilot itself was not born until 2011, the year after work started at KCD, when Newmont Mining (TSX: NMC; NYSE: NEM) bought out Fronteer Gold for its Long Canyon project in Nevada.

Pilot was spun out of the deal to hold 14 of Fronteer’s other projects. Most of Fronteer’s management and technical personnel moved to the new vehicle as well. The company’s main assets are TV Tower, the Halilaga copper–gold project — which is also in Turkey and is a joint venture with Teck Resources (TSX: TCK.B; NYSE: TCK) — and the Kinsley Mountain project in Nevada.

“When you think about this part of Turkey, we’ve been here for about ten years, and we’ve had a lot of success,” Lennox-King said. “The district has gone through an evolution in that time, from being a strictly epithermal gold area — with Agi Dagi and Kirazli gold assets that Alamos Gold (TSX: AGI; NYSE: AGI) is now developing — and then there was our Halilaga copper–gold porphyry, and then you add in this K2 potential as well, and you’re really starting to build a case that the Biga district will become one of these classic epithermal gold districts.”

Pilot will spend the next few months analyzing the latest K2 results and planning the next exploration program. Lennox-King says the 2014 TV Tower program will likely come in at $4 million.

But Pilot hasn’t stopped drilling — the company just kicked off a drill program at its Kinsley Mountain gold project in Nevada.

“One thing we’ve been mindful of this year, given the market, is to really stage how we’re running our campaigns,” Lennox-King said. “So we’re drilling at Kinsley now. We’ll do a pretty comprehensive program there and ramp up in Turkey [during the first half]. That system kind of smoothes out the burn rate, and it’s good capital discipline.”

Kinsley Mountain is an ideal project for Pilot Gold because it appears to host the same gold mineralization as Long Canyon. That project, where Newmont is advancing exploration and permitting, is 100 km north of Kinsley, along the Long Canyon trend.

“The target at Kinsley has really evolved over the last twelve months as well,” Lennox-King said. “We’ve really defined one of these big structural corridors similar to what the team defined at Long Canyon, with stacked mineralization at multiple stratigraphic levels.”

This first drill program of 2014 will total 3,700 metres and extend the Western Flank discovery towards the Right Spot target. Western Flank describes an area that Pilot hit last year with high-grade gold in structures and stratigraphic units not previously known to host gold in the district.

But gold they definitely host. Some of the best intercepts from Western Flank last year included 8.53 grams gold over 36.6 metres, 2.5 grams gold over 24.4 metres and 6.34 grams gold over 5.9 metres.

Pilot has tracked Western Flank along 500 metres of strike. The Right Spot target comprises an area 500 metres south of the end of the Western Flank strike, where a road-cut sample returned 2 grams gold over 15 metres. The sample suggested the potential to double the strike at Kinsley. Pilot plans to test that entire kilometre of strike in the current drill campaign.

Lennox-King says the host rocks carrying the best gold grades project towards the surface and move south, so the company expects to find shallower mineralization drilling south. 

The 2014 Kinsley program is budgeted at $4.4 million, of which Pilot is responsible for 78%. A subsidiary of Nevada Sunrise Gold (TSXV: NEV; US-OTC: NVSGF) owns 22% of the project and is funding its share of the work.

Pilot has $20.5 million in the bank, which is more than enough to fund its exploration activities in Turkey and Nevada in 2014. Lennox-King says the idea is to spend half of the treasury this year.

On news of the K2 drill results Pilot Gold’s share price gained 14¢ in two days to close at $1.25. The company has a 52-week share price range of 71¢ to $2.20, and 90 million shares outstanding.



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Photos

Looking towards the Karaayi zone from the Kayali target at Pilot Gold's TV Tower gold project in northwestern Turkey. Credit: Pilot Gold
Looking towards the Karaayi zone from the Kayali target...


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