Significant milestones achieved at key projects in Turkey, Nevada

VANCOUVER, B.C. – Pilot Gold Inc. (PLG - TSX) (“Pilot Gold” or the “Company”) is pleased to announce its financial results and company highlights for the year ended December 31, 2012, a year marked by significant advances on each of its key projects in Turkey and Nevada.

2012 highlights and significant events subsequent to year end include:

  • Signed an earn-in and joint venture agreement with Teck Resources Limited ("Teck") to become project operator at the TV Tower property in Turkey, while earning in to 60% interest
  • Identified large, growing gold and silver zones at the KCD target, TV Tower
  • Announced results of a preliminary economic assessment and a maiden resource estimate for the Halilaga copper-gold project in northwest Turkey
  • Earned-in to a 65% interest in, and doubled property size at, the Kinsley Mountain project in Nevada
  • Sold the Regent exploration property for $3 million, retaining exposure to potential future production
  • Secured capital to ensure 2013 exploration plans are fully funded

“Pilot Gold realized significant exploration and project success in 2012,” stated Matt Lennox-King, Pilot Gold President & CEO. “We are in an excellent position heading into 2013, with the financial strength and the proven skills and experience we require to drive progress at our properties in Turkey and Nevada and achieve our vision of being the leading exploration company in our chosen jurisdictions.”

TV Tower:
Pilot Gold currently holds a 40% interest in the project and became project operator in 2012.  Pursuant to the TV Tower Agreement, we hold an option to increase our interest in the project from 40% to 60%, subject to meeting certain requirements over the next three years.  A subsidiary of Teck currently holds a 60% interest in TV Tower.  We completed the $5 million first-year minimum earn-in expenditure commitment in January 2013, and issued 1,637,500 common shares to a subsidiary of Teck in connection with achieving this first milestone.

Since becoming project operator in June 2012, we completed 14,440 metres of drilling, comprising 70 diamond drill holes primarily focused on the KCD target. Drilling in 2012 at KCD has returned some of the highest-grade gold, silver and copper intercepts reported in northwestern Turkey. The program at TV Tower for 2013 includes 30,000 metres of core and RC drilling at multiple targets.

Pilot Gold earned a 65% interest in Kinsley Mountain in February 2013. The 2012 program included 11,868 metres of infill and step-out core and reverse circulation (“RC”) drilling in 63 holes, and was designed to define and expand the mineralized zones identified by previous operators.

In conjunction with drilling, a comprehensive property-wide soil and rock sampling and geological mapping effort to identify new targets was completed, encompassing both the original 272 claims and 191 claims staked by the Company in largely unexplored areas. Staking by the Company expanded the Kinsley property, consolidated access to the main mineralized trends to the North, and joined two previously separate claim blocks, creating a contiguous property.

The 2013 Kinsley work program includes 22,000 metres of core and RC drilling stepping out from the historic pits, and to test priority exploration targets on flanking and outlying targets. Nevada Sunrise Gold Corporation holds a 35% interest in Kinsley and will be responsible for its pro-rata share of costs for this year’s program. 

The Company holds a 40% interest in Halilaga, a copper-gold porphyry located 20 kilometres southeast of TV Tower. Halilaga advanced considerably during 2012, with an initial resource estimate, and the completion of a preliminary economic assessment (the “Halilaga PEA”).

Highlights of the Halilaga PEA (Base Case: USD$1,200/oz. Au and USD$2.90/lb. copper) include:

  • Pre-tax IRR of 26%; After-tax IRR of 20%
  • Pre-tax NPV7% of $675 million; After-tax NPV7% of $474 million
  • 2.1 year pre-tax payback; 2.7 year after-tax payback

The resource estimate at Halilaga includes (i) an Indicated sulphide resource of 1.112 billion pounds of copper at an average grade of 0.30% copper (168,167,000 tonnes), and 1.665 million ounces of gold at an average grade of 0.31 g/t gold, and (ii) an Inferred sulphide resource of 1.007 billion pounds of copper at an average grade of 0.23% copper (198,668,000 tonnes) and 1.661 million ounces of gold at an average grade of 0.26 g/t gold.

The Halilaga PEA suggests that conceptually, the project may be viable (within the very preliminary parameters of a PEA) with the commodity price assumptions included therein relative to today's cost environment.  The illustrative project would use conventional open pit mining (with an approximate 1:1 strip ratio), and standard milling and flotation processing for recovery of copper and gold.  A subsidiary of Teck holds 60% of Halilaga and is project operator. In 2013 we plan to continue strategic studies including economic, metallurgical, hydrological, environmental and engineering analyses to support the conceptual economics and potential of this porphyry project.

The Halilaga PEA is preliminary in nature. The mineral resources used in the Life of Mine plan and economic analysis include 56% Indicated mineral resources, and 44% Inferred mineral resources. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them to be categorized as mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.  Mineral reserves can only be estimated as a result of an economic evaluation as part of a Pre-Feasibility Study or a Feasibility Study of a mineral project. Accordingly, at the present level of development there are no mineral reserves at Halilaga.  Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration or Mineral Reserves once economic considerations are applied. Therefore there is no certainty that the production profile concluded in the Halilaga PEA will be realized.  Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. Moira Smith, Ph.D., P.Geo, Pilot Gold Chief Geologist, is the Company's designated Qualified Person (‘QP”) for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”), and has reviewed and validated that the scientific or technical information contained in this News Release related to the Halilaga PEA is consistent with that provided by the QPs responsible for the Halilaga PEA, and has verified the technical data disclosed in this document relating to those other projects in which the Company holds an interest. Dr. Smith has consented to the inclusion of the technical information in the form and context in which it appears in this News Release.  

TV Tower and Kinsley are both early stage exploration projects.   Neither contain any mineral resource estimates as defined by NI 43-101. The potential quantities and grades disclosed herein are conceptual in nature and there has been insufficient exploration to define a mineral resource for the targets disclosed herein. It is uncertain if further exploration will result in these targets yielding a mineral resource.


The following selected financial data is derived from our consolidated financial statements for the years ended December 31, 2012, 2011 and 2010, as prepared in accordance with International Financial Reporting Standards (“IFRS”). As described in our audited consolidated financial statements, a portion of the comparative year reflects the application of continuity of interest accounting.


    Twelve months ended December 31





Loss for the period




Loss and comprehensive loss for the year




Basic and diluted loss per share





           As at


December 31,


December 31,


Cash and short-term investments



Working capital



Total assets



Current liabilities



Non-current liabilities



Shareholders’ equity




For the year ended December 31, 2012, we reported a net loss of $8.02 million compared to a net loss of $11.84 million for the year ended December 31, 2011. The most significant contributors to the loss for the year ended December 31, 2012 were the cost of wages and benefits of $2.30 million (2011: $1.20 million), stock-based compensation of $1.72 million (2011: $5.9 million) and office and general expenses of $1.52 million (2011: $1.24 million).  

Expenses for the year ended December 31, 2012 were offset by income recognized from management fees arising from our qualifying expenditures on the TV Tower project of $0.38 million (2011: $nil) and the reversal of a previous impairment of the VAT receivable in Turkey ($0.31 million). The loss per share for the year ended December 31, 2012 was $0.12 (December 31, 2011: $0.21).

Total assets increased significantly to $72.39 million as at December 31, 2012 (December 31, 2011: $37.49 million). The most significant increase reflects the (i) receipt of proceeds from the bought-deal financing and concurrent private placements that closed on November 1, 2012; and (ii) the values of the Common Shares and share purchase warrants issued to Teck to secure the earn-in option at TV Tower, off-set by those cash outflows for general exploration and administration activities and net changes to the value of our investments in public companies. 

Liabilities at December 31, 2012 reflect primarily accounts payable and accruals recorded at year end arising from ongoing activities.

This press release should be read in conjunction with Pilot Gold’s audited consolidated financial statements and Management’s Discussion and Analysis for the year ended December 31, 2012. These documents can be found on the Company’s website (www.pilotgold.com) or under the Company’s profile on SEDAR at www.sedar.com. Shareholders may receive a printed copy of the audited consolidated financial statements, free of charge, upon request. All amounts are presented in United States dollars unless otherwise stated. Pilot Gold will be hosting its annual general meeting on May 9, 2013, in Vancouver, British Columbia.


Pilot Gold is a well-funded gold exploration company led by a proven technical team that continues to discover and define high-quality projects featuring strong grades, meaningful size and mining-friendly addresses. Our three key assets include interests in the TV Tower and Halilaga projects in Turkey, and the Kinsley Mountain project in Nevada, each of which has the ability to become a foundational asset. We also have a pipeline of projects characterized by large land positions and district-wide potential that can meet our growth needs for years to come.

For more information, visit www.pilotgold.com or contact:

Patrick Reid, VP Corporate Affairs
Phone: 604-632-4677 or Toll Free 1-877-632-4677This email address is being protected from spambots. You need JavaScript enabled to view it.

Ian Noble, Director, Corporate Communications
Phone: 604-809-8750
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Unless stated otherwise, information of a scientific or technical nature in this press release regarding the TV Tower, Halilaga or Kinsley Mountain properties are summarized, derived or extracted from, the following technical reports: “Updated Technical Report on the TV Tower Exploration Property, Canakkale, Western Turkey”, effective July 15, 2012 and dated August 3, 2012 prepared by Paul Gribble, C.Eng., FIMMM; “Preliminary Economic Assessment Technical Report for the Halilaga Project, Turkey” effective August 27, 2012 and dated October 10, 2012 prepared by Gordon Doerksen, P.Eng., James Gray, P.Geo., Garth Kirkham, P.Geo., Dino Pilotto, P.Eng., Maritz Rykaart, P.Eng, and Kevin Scott, P.Eng.; and “Technical Report on the Kinsley Project, Elko County, Nevada, U.S.A.” effective February 15, 2012 and dated March 26, 2012 prepared by Michael Gustin, CPG and Moira Smith, Ph.D., P.Geo. For further detail on TV Tower, Kinsley Mountain or the Halilaga PEA, refer to the respective technical reports filed on the Company’s website at www.pilotgold.com or under Pilot Gold’s SEDAR profile at .

All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to Pilot Gold within the meaning of applicable securities laws, including statements that address timing of exploration and development plans at the Company’s mineral projects. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "planned", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions about future prices of gold, copper, silver and other metal prices, currency exchange rates and interest rates, favourable operating conditions, political stability, obtaining governmental approvals and financing on time, obtaining renewals for existing licences and permits and obtaining required licences and permits, labour stability, stability in market conditions, availability of equipment, accuracy of any mineral resources and mineral reserves, successful resolution of disputes and anticipated costs and expenditures. Many assumptions are based on factors and events that are not within the control of Pilot Gold and there is no assurance they will prove to be correct.

Such forward-looking information, including, but not limited to, statements that address reserve potential, potential quantity and/or grade of minerals, potential size of a mineralized zone, potential expansion of mineralization, the timing and results of future resource estimates, proposed timing of exploration and development plans at the Company’s mineral projects, and the estimation of mineral reserves and resources involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of Pilot Gold to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information.

Such factors include, among others, risks related to the interpretation of results at certain of our exploration properties, reliance on technical information provided by our joint venture partners or other third parties as related to any of our exploration properties; changes in project parameters as plans continue to be refined; successfully completing the earn-in on the TV Tower project, including the ability to incur the minimum annual Expenditure Requirements and future issuance of common shares as consideration to complete the earn-in agreement; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; current and proposed exploration and development; the costs and timing of the development of new deposits; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; uses of funds in general including future capital expenditures, exploration expenditures and other expenses for specific operations; the timing and success of exploration activities generally; delays in permitting; satisfaction of Turkish requirements relating to the periodic submissions of Environmental Impact Assessments; possible claims against the Company or its joint venture partners; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration as well as those factors discussed in the Annual Information Form of the Company dated March 27, 2013, in the section entitled "Risk Factors", under Pilot Gold’s SEDAR profile at .

Although Pilot Gold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Pilot Gold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. Accordingly, readers should not place undue reliance on forward-looking information. Further details relating to Pilot Gold are also available in our Annual Information Form, available under Pilot Gold’s SEDAR profile at .

Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources

The mineral resource estimates referenced use the terms "Indicated Mineral Resources" and "Inferred Mineral Resources." While these terms are defined in and required by Canadian regulations (under NI 43-101), these terms are not recognized by the U.S. Securities and Exchange Commission ("SEC"). "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. The SEC normally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant "reserves" as in-place tonnage and grade without reference to unit measures. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. Pilot Gold is not an SEC registered company.