It’s not every day that a junior exploration company takes a step outside the well-trodden Carlin and Cortez districts of Nevada to look for Carlin-style gold deposits, but Pilot Gold (TSX: PLG; US-OTC: PLGTF) is proving to be the exception with its Goldstrike project, 56 km northwest of St. George, Utah.
Since acquiring the ground from Cadillac Gold in 2014, Pilot has been eager to chase the sediment-hosted gold mineralization, where it dips gently under cover beyond old open pits that between 1988 and 1994 produced 209,000 oz. gold from ore grading of 1.2 grams gold per tonne.
The first results from Pilot’s maiden drill program were right on target, and extended the gold footprint across a 1,200-metre strike at surface, with intercepts of 39.6 metres grading 1.01 grams gold, 41.1 metres of 0.84 gram gold and 22.9 metres of 1.68 grams gold.
“We’ve spent a whole year putting the district-wide story together, and where this one geological horizon comes to surface, there’s always gold,” chief geologist Moira Smith tells The Northern Miner during a phone interview, adding that the “windows” to mineralization were historically developed into open pits across a 7 km mining trend.
“Where it went under cover, the previous explorers stopped drilling, so the property presented us with enormous potential,” she adds. “The drill results demonstrate that there’s a lot of gold left in the ground, and plenty of room to build on that.”
The project lays along the eastern edge of the Great Basin — a metallogenic domain of Carlin and epithermal-type systems in the southwestern U.S. and home to 11% of the world’s gold production, according to the U.S. Geological Survey.
The deposits cluster along distinct linear trends that follow regional-trending structures often hidden beneath younger rocks, but Smith says it’s best to explore where these structures intersect the most reactive and permeable rocks.
“The Carlin and Cortez trends in Nevada are in a geological environment just off the edge of an ancient Paleozoic continental shelf, and that’s the sweet spot, in terms of the best host rocks,” she explains.
“When you get off that platform it moves into a different package of rocks, and that extends all the way to Utah — but they still make great hosts. The similarities between the districts are striking.”
Vice-president of corporate affairs Patrick Reid refers to Newmont Mining’s (NYSE: NEM) Long Canyon property — a gold discovery made by Fronteer Gold that was later acquired by Newmont for $2.3 billion — as the perfect example of how a “big gold deposit” can be found outside the usual model.
“The conventional paradigm was that you don’t have big gold deposits on the platform, but Long Canyon broke away from that idea, and now you see a lot more activity along that eastern side of the basin,” Reid says in a phone interview, noting that most of Pilot’s technical and management teams built Fronteer before its takeover in 2012.
Long Canyon is located along the eastern flank of the Pequop Mountains in northeastern Nevada. It has probable reserves of 1.2 million oz. gold, within 16.7 million tonnes grading 2.29 grams gold over a 4.8 km strike length.
Smith says that gold exploration in southwestern Utah stalled in the mid- to late-1990s due to the precipitous drop in gold prices, and she suspects it never rebounded, largely because the Canadian-based junior explorer, Cadillac, “did a great job at consolidating such a large land package.”
She says that “Cadillac put a large land package together, staked a bunch of claims and got their hands on virtually all the historical data from the mining operations and exploration in the district, so we’ve got a real treasure trove of all the old data. We basically have the whole district — there’s no one else around us.”
Pilot is waiting to receive the rest of the results from the 18-hole, 2,700-metre drill program, but already has “big plans” for Goldstrike.
“We designed the program to look down-dip of the existing drill holes and historic workings, and already we’re finding gold in those holes. The next step is to work on a resource and build confidence in the historical drill database,” she says, noting the company is still crafting its budget for the new year.
Analysts from Macquarie Research said in a report that the favourable, unexplored geology is conducive to Pilot developing innovative, brownfield targets in a historic mining district. The group has reiterated an “outperform” recommendation on the stock, with a 12-month, $1.50 share target.
Pilot shares have traded within a 52-week range of 26¢ to $1.27 per share, and closed at 28¢ at press time.
The company has 107.3 million shares outstanding for a $30-million market capitalization.