Pilot Gold Inc.
TSX : PLG

Pilot Gold Inc.

July 13, 2015 06:30 ET

Pilot Gold Reports Metallurgical Results From Upper Gold Host at Kinsley Mountain

Mineralization amenable to flotation processing, with concentrate grades up to 52 g/t gold

VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 13, 2015) - Pilot Gold Inc. (TSX:PLG) ("Pilot Gold" or the "Company") is pleased to report additional metallurgical results designed to test the amenability of gold mineralization hosted in the Dunderberg (Candland) Shale at the Kinsley Mountain property to produce a saleable concentrate. The Dunderberg Shale was the primary host rock in the historical mining operation, and is the shallow host rock at the Western Flank. Previous concentrate testing of deeper Secret Canyon Shale-hosted gold mineralization produced up to 89.6% recovery and up to 312 g/t concentrate grade in metallurgical testing (see press release of January 19, 2015).

Matt Lennox-King, Pilot Gold's President & CEO commented, "These recent metallurgical test results demonstrate that, combined, Kinsley's main host rocks can produce a high-grade concentrate with excellent gold recoveries and the potential of low capital cost options for possible mining and processing at Kinsley."

The test work, initiated in March 2015, used the same flowsheet developed for mineralization hosted in the Secret Canyon Shale.

Summary Highlights:

Composite Overall Au Recovery (%) Concentrate Grade (g/t) Calculated Feed Grade (g/t)
WF-CC#1 83.0 52.3 4.72
WF-CC#2 82.6 42.0 2.37

Overall, these results indicate that the Dunderberg Shale material, like that from the Secret Canyon Shale, may be amenable to production of a concentrate. The results may be improved with further study of primary and regrind sizes and flowsheet refinements particular to the Dunderberg shale.

Flotation testing of Dunderberg Shale-hosted mineralization was undertaken after analyses revealed a relatively coarse grain size for gold-bearing pyrites, relatively low sulfide sulfur concentrations and high gold to sulfide sulfur ratios (ranging from 2.3 to 2.6) when compared to typical Carlin-style sediment-hosted gold deposits. These data suggested that the mineralized material may be amenable to producing a concentrate of sufficient grade to support low cost on-site or off-site treatment, over more expensive whole ore treatment options such as roasting or autoclaving.

Two composites with calculated feed grades of 4.72 and 2.37 g/t gold were selected. The scope of work was intended to provide a preliminary determination as to how the two composites would respond to the flowsheet developed previously for Western Flank Secret Canyon Shale-hosted gold mineralization (see press release of January 19, 2015). In the current study, samples were subjected to rougher and scavenger flotation testing over a range of conditions including variations in grind size, followed by cyanidation of the flotation tails. Combined concentrate recoveries ranged from a low of 76% to a high of 89.6%. Combined with cyanidation of the flotation tails, the total recovery increased to 89.0% to 95.0%. The concentrate grades ranged from a low of 98.6 g/t gold to a high of 312 g/t gold, with gold recovery to concentrate highest in the higher-grade and less oxidized samples.

The two composites from Dunderberg Shale-hosted gold mineralization returned concentrate grades of 52.3 and 42.0 g/t gold, corresponding to overall recoveries of 83.0 and 82.6%, respectively. The mineralized material was not oxidized, and no benefit was realized from cyanide leaching of the tails. However, cyanide leach testing of tails would likely result in recovery of additional gold from partially oxidized material.

Concentrates were assayed for deleterious elements and were found to contain arsenic and antimony. Arsenic in the concentrate tested ranged from 0.95% to 3.66% and averaged 2.35% while antimony in the concentrate tested ranged from 0.042% to 0.069% and averaged 0.058%. While arsenic and antimony are somewhat elevated, it is believed the levels would not preclude direct sale to a typical Nevada refractory ore processing facility.

KINSLEY MOUNTAIN METALLURGICAL PROGRAM

The program was carried out at Hazen Research, Inc. in Golden, Colorado under the direction of consulting metallurgist Gary Simmons. Mr. Simmons has more than 35 years of experience with mining companies in project management, process development, mill operations, design engineering, research and development and corporate due diligence. He played key roles with Fronteer Gold on the flagship Long Canyon and Northumberland projects, and was Senior Technical Director, Metallurgy and Technology for Newmont Mining Corporation.

Gary Simmons, of GL Simmons Consulting, LLC (B.S. Extractive Metallurgy), a Qualified Professional with the Mining and Metallurgical Society of America and Pilot Gold consultant, is the Qualified Person, within the meaning of National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"), who has overseen the collection and verification of the data for this release and has reviewed and approved this release's content. Mr. Simmons is independent of Pilot Gold. Metallurgical testing was conducted at Hazen Research, Inc. in Denver, Colorado.

Moira Smith, Ph.D., P.Geo., Chief Geologist, Pilot Gold, is the Company's designated Qualified Person for this news release and has reviewed and validated that the information contained in the release is accurate.

ABOUT KINSLEY MOUNTAIN

Kinsley Mountain hosts near-surface mineralization similar to other Carlin-style, sediment-hosted gold systems. The property consists of 469 claims on U.S. Bureau of Land Management land plus 6 leased patents totalling 9,520 acres (3,853 hectares) and hosts a past-producing mine with an extensive exploration database and numerous, untested gold targets. The Company owns approximately 79.1% of Kinsley. Intor Resources Corporation, a subsidiary of Nevada Sunrise Gold Corp., is the Company's joint venture partner at Kinsley.

Kinsley Mountain is an early-stage exploration project and does not 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 being delineated as a mineral resource.

Further information on Kinsley is available in the technical report entitled "Updated Technical Report on the Kinsley Project, Elko County, Nevada, U.S.A.", effective March 1, 2015 and dated March 19, 2015, prepared by Michael M. Gustin, CPG, Moira Smith, Ph.D., P.Geo. and Gary L. Simmons, MMSA under Pilot Gold's Issuer Profile on SEDAR (www.sedar.com).

ABOUT PILOT GOLD

With a proven technical team and strong treasury, Pilot Gold continues to discover and advance high-quality projects featuring strong grades, meaningful size and mining-friendly locales. Our cornerstone assets include interests in the TV Tower and Halilaga projects in Turkey and the Kinsley project in Nevada, each a foundational asset. The Company also has a pipeline of projects defined by strong gold occurrences, large land positions and district-scale potential.

For more information, visit www.pilotgold.com.

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 potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans. 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, the absence of any ground water at Kinsley and the related impact on permitting, the availability of equipment, accuracy of any mineral resources, the amenability of mineralization to produce a high-grade or high-quality concentrate (as there can be no assurances as to the results of the metallurgical testing and no inferences should be drawn therefrom), the accuracy of any metallurgical testing completed to date, the potential of low capital cost options for potential mining and processing at Kinsley or processing at a typical Nevada refractory ore processing facility, The ability to improve results with further study, successful resolution of disputes (if any) 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, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to the interpretation of results at the Kinsley property, reliance on technical information provided by our joint venture partner or other third parties as related to Kinsley; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; 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; the timing and success of exploration activities generally; delays in permitting; 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 24, 2015 in the section entitled "Risk Factors", under Pilot Gold's SEDAR profile at www.sedar.com.

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 unless required by law.

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