Fronteer spin-off Pilot Gold busy with the drill

Just six months into its new corporate life, Vancouver-based gold explorer Pilot Gold (PLG-T) has already drilled 60,000 metres at nine projects on two continents.

A spinoff of geologist Mark O’Dea’s successful gold explorer Fronteer Gold, Pilot Gold got its start when Newmont Mining (NMC-T, NEM-N) snapped up Fronteer for $2.3 billion, or $14 a share, in February for its Long Canyon gold project in Nevada, close to Newmont’s existing operations.

As part of the deal, Pilot Gold kept 14 of Fronteer’s other properties, including a significant portfolio of early-stage Nevada gold prospects and a minority interest in two advanced gold projects in Turkey, as well as most of its management team. O’Dea became chairman of Pilot, while Fronteer’s senior geologist, Matt Lennox-King, stepped up to become president and CEO.

Pilot Gold has released a steady stream of results this quarter from several of its properties. The company has made two new gold discoveries in Nevada so far, as its grassroots regional exploration strategy in off-trend areas of the state begins to pay off. The first was at its 100%-owned Brik project located in southeastern Nevada’s Stateline district, which Pilot Gold’s management describes as an emerging gold district in the well-explored Nevada basin.

First-pass drilling on the project’s Hidden Treasure target intersected 17 metres of 2.41 grams gold per tonne from surface at the volcanic-hosted, low-sulphidization epithermal gold project, and a second round of drilling is expected to begin there in the next few weeks.

The second discovery, at Pilot Gold’s Viper project in northeastern Nevada’s Elko County, found bulk-tonnage-style gold and silver in a similar low-sulphidation, epithermal mineralized system. Phase one drilling at Viper returned 33.5 metres of 1.09 grams gold and 20.98 grams silver from surface, and assays are still pending for 11 holes out of 18.

Elsewhere in Nevada, assays are expected shortly from drilling at the company’s New Boston copper-molybdenum prospect, while a first-pass drill program is due to begin soon on the newly acquired Kinsley Mountain gold project.

Initial results also just came back from a 10,000-metre drill program on Pilot Gold’s already well-explored Regent property, confirming “lateral and downdip continuity of gold mineralization.” The property has been tested by 600 drill holes in past years.

Exploration is ongoing at the company’s two joint ventures in Turkey, in which Teck Resources (TCK-T, TCK-N) holds a 60% interest. Drilling at the Halilaga copper-gold-porphyry project and the TV Tower gold project 20 km away has increased the size and continuity of gold mineralization.

At Halilaga, step-out drilling has extended the limits of the porphyry zone while infill drilling should allow the joint-venture partners to complete a maiden resource estimate by year-end. Mineralization has been shown to extend over a strike length of 1,200 metres, a width of 850 metres and thicknesses of up to 600 metres, including a locally developed, shallow supergene enrichment zone with grades of 1% to 2% copper. An additional 10,000 metres of drilling have been approved for the remainder of the year, which will be carried out in conjunction with continuing metallurgical and hydrological testing.

At TV Tower, recent drilling at the Kucukdag target has intersected high-grade gold and silver mineralization and extended the system’s 300-by-400-metre footprint by 100 metres to the north. Highlights from step-out drilling included 48 metres of 171 grams silver.

Earlier this year, a hole drilled through the central part of the Kucukdag breccia returned 132 metres of 3.8 grams gold, 0.82% copper and 20.06 grams silver. Assays remain pending for eight more holes, and drilling is scheduled to continue until December with three core rigs.

As of late October, Pilot Gold had close to $24 million left in its treasury. It spent $10 million early in the year but raised $25 million in June at $3 a share. The company has 59 million shares outstanding and a 52-week share price range of $1.08-$3.74.

Shares last traded for $1.29, after listing in April at $3.75.

O’Dea is active as chairman and CEO at another new company, Blue Gold Mining (BGX-V), which he took control of in July by buying an equity position in a shell named Drexel Resources. O’Dea helped Blue Gold raise $24.5 million in October at $1 a unit, for “potential future acquisitions.”

Over 20 brokers and mining executives participated in an early private placement for Blue Gold’s predecessor at 10¢ a share in July. Noteworthy among the participants were Peter Brown, the head of brokerage firm Canaccord Genuity, who bought 400,000 shares; and John Tognetti, the head of Haywood Securities, who bought 200,000 shares. O’Dea purchased 10 million shares at the same price.