Results from infill and step-out drilling at the Western Flank target of Pilot Gold’s (TSX: PLG; US-OTC: PLGTF) majority owned Kinsley Mountain project in Nevada continue to yield high-grade intercepts, sending the company’s share price up more than 5% to $1.42.
The recently discovered Western Flank zone — 550 metres northwest of the past-producing pits at Kinsley and 230 metres below surface — is open in all directions. Results from the last five drill holes of the company’s 12-hole, 3,500-metre diamond drill program include intercepts of 10.6 grams gold per tonne over 30 metres in step-out drill hole 133C, and 2.84 grams gold over 18.9 metres in step-out hole 134C.
Infill drilling returned 21.3 grams gold over 29 metres in hole 137C(i), including 46.4 grams gold over 2.9 metres (oxide) and 32.7 grams over 11.4 metres. Infill hole 137CA cut 15.6 grams gold over 38.7 metres, including 26.2 grams gold over 21.9 metres. Hole 137CA was drilled between two other holes and discovery hole 91, which returned 36.6 metres of 8.53 grams gold from a 232-metre depth late last year.
The results have prompted Pilot Gold to increase the exploration program at Kinsley by $1.6 million, bringing the 2014 program to US$6 million for 8,600 metres of drilling. The second phase of drilling is expected to get underway in the first week of May. Pilot describes Kinsley’s near-surface mineralization as being similar to other Carlin-style, sediment-hosted gold systems.
In addition to the Western Flank, Pilot will drill targets south and north of the past-producing Kinsley mine, including the Right Spot target and the Secret Spot target, located 2 km southwest. Areas to the south of the Right Spot are also undergoing surface mapping, sampling and target generation.
Pilot acquired an option to earn a majority interest in the 30 sq. km Kinsley property in September 2011. It owns a 79.1% stake in the early stage exploration project, with Nevada Sunrise Gold (TSXV: NEV; US-OTC: NVSFG) owning the rest.
The management team at Pilot formerly headed up Fronteer Gold, which discovered and advanced the 2.6 million oz. Long Canyon gold deposit, 100 km north of Kinsley. Newmont Mining (NMC: TSX; NEM: NYSE) picked up Long Canyon in its 2011 acquisition of Fronteer.
Tara Hassan, a mining analyst at Haywood Securities, commented in a research note soon after the drill results were published that she expects the market will react well to the latest intercepts, but points out that the results will “be smaller step-out holes.” She adds that “the geological and metallurgical model for Kinsley are not simple ones.”
Hassan reasons that “if Pilot can demonstrate scale either along the northwest–southwest Kinsley trend corridor or the north northeast–south southwest Western Flank corridor, the project could be a game changer for the company.”
Outside Nevada, Pilot Gold holds the TV Tower and Halilaga projects in northwestern Turkey.