Pilot Gold hits high grade in search for next Long Canyon

Vancouver – On the hunt for the next Long Canyon deposit, Fronteer spin-out Pilot Gold (PLG-T) thinks it has found just that some 75 km southeast of its original Nevada discovery.  

The company, stacked with the Fronteer team that found Long Canyon and then sold it to Newmont Mining (NMC-T, NEM-N) for $2.3 billion almost a year ago, has reported several encouraging intercepts from the Kinsley Mountain project it is earning into from Nevada Sunrise Gold (NEV-V).

The results, the first diamond drilling the former open-pit mine has seen, include hole 4 that hit 18.4 metres carrying 5.91 grams gold per tonne from 43 metres depth, hole 3 that returned 7.5 metres averaging 6.75 grams gold from 103 metres downhole, and hole 2 that cut 8.7 metres carrying 6.23 grams gold from 112 metres.

What makes the core results particularly interesting, however, is that they show clear parallels in stratigraphy, structure and mineralization to the Long Canyon deposit.

“The main thing that we see between Kinsley and Long Canyon,” explained Matt Lennox-King, president and CEO of Pilot, by phone, “is that there’s mineralization at the same stratigraphic horizon, or interval. The bulk of Long Canyon is hosted between Ordovician and Cambrian-carbonate rocks, and we also see that same relationship at Kinsley.”

The same patterns occur at Barrick Gold’s (ABX-T, ABX-N) Bald Mountain, and all are clearly different than the dominant Carlin trend.

“Both of them are up on the carbonate platform,” said Lennox-King. “It’s not on the Carlin trend, the rocks are quite different…you’re in big thick sequences of limestone and dolomite up there.”

It was those geological signatures that the team started looking for soon after cracking the code at Long Canyon, explained Lennox-King.

“Once we saw the relationship we started looking elsewhere in the state for similar geology, and one of those that came up very early on was Kinsley Mountain.”

The company bought the option deal from Animas Resources (ANI-V) in September 2011 for US$350,000, and what will amount to 150,000 shares when Pilot Gold completes its 51% earn-in sometime in the second quarter. To earn an additional 14% of Kinsley from Nevada Sunrise, Pilot will have to spend US$3-million on the project within five years.

When it secured the project, Pilot launched into a geological compilation effort and drilled six holes for 1,250 metres last year, looking to confirm grades from old reverse circulation holes in the area. The diamond drill holes were designed to cover a wide area around the margins of the old pit, some spaced more than 2 km apart, while also pushing significantly deeper than the 65-metre average drill depth previously seen on the property.

“We wanted to test a pretty wide area early on in our ownership of the project, and that’s really to get the broadest understanding of the region prior to attacking it intensively,” said Lennox-King.

Holes 2 and 3 were drilled some 600 metres apart in the more northern part of the property while hole 1, closer to the centre, returned 16.8 metres averaging 1.64 grams gold. Holes 4, 5, and 6 were grouped more closely in the southeast, but while hole 4 had its impressive intercept, hole 6 returned 10.4 metres grading 0.95 gram gold, and hole 5 returned 2.7 metres grading 0.65 gram gold, along with a slightly longer intercept at similar grades deeper down.

Lennox-King said holes 5 and 6 are getting more outboard of the main mineralized system, and there is a fairly strong northwest-southeast control in the district that could explain the disparity between the holes.

“Disappointing obviously, but it certainly doesn’t change our enthusiasm for the project,” said Lennox-King.

With initial results overall encouraging, Pilot is launching into a 12,000-metre drill program for 2012. The company will concentrate drilling on the 11.4-sq.-km option property, but will also start exploring the roughly 10.6 sq. km it staked independently to the north.

Pilot will also continue to explore its 40%-owned Turkish exploration properties this year, with Teck Resources (TCK.B-T, TCK-N) as majority partner. Pilot plans to drill 15,000 metres at its Halilaga porphyry project, where it just announced an initial resource of 168.2 million indicated tonnes grading 0.3% copper, 0.31 gram gold and 0.006% molybdenum plus 198.7 million inferred tonnes grading 0.23% copper, 0.26 gram gold and 0.007% molybdenum; plus 10,000 metres at its TV Tower project.

On news of the Nevada drill results Pilot’s share price climbed 6¢ or 3.8% to $1.63. The company listed last April at $3.74 before making a long descent to a low of 91¢ in December. Nevada Sunrise’s share price shot up 67% or 6¢ to 15¢ on the news with almost 14 million shares traded on the day.