Turkish assays delight Pilot Gold

Drill results from Pilot Gold’s (PLG-T) early stage joint-venture project with a Turkish subsidiary of Teck Resources (TCK.A-T, TCK.B-T, TCK-N) sent the junior explorer’s shares up 3.4% to $1.87 with 1.8 million shares changing hands.

Assays from the latest eight holes at the TV Tower project include 193 grams gold per tonne, 9.8 grams silver per tonne and 0.46% copper over 12 metres in drill hole KCD-50. The interval, located at a vertical depth of 100 metres, also demonstrated visible gold in several veins.

The 12-metre intercept  was sampled at 1.5 metre intervals and assays ranged from a high of 681 grams gold to a low of 12.8 grams gold. Four of the eight samples returned higher than 100 grams gold. The drill hole highlights the third consecutive set of strong assay results at the Kucukdag target that continue to return long intervals of gold, silver and copper mineralization with areas of exceptionally high grades, the company says.

Pilot Gold’s chief geologist, Moira Smith, commented that the location of the intercept and the near perpendicular orientation of the gold-bearing veins relative to the hole orientation, suggest the interval may reflect true width of the zone. She also noted in prepared remarks that the intervals “form part of a newly recognized stratiform zone of mineralization that may have significant dimensions.”

CEO Matt Lenox-King explains that originally the model was that it was strictly a breccia-hosted deposit, but what its team now sees is that the mineralizing fluids are pooling out along a porous unit within the volcanic stratigraphy. “The significance of that is that everything is dipping shallowly so you are getting tabular mineralization rather than a steeper, more restricted mineralization,” he explains in an interview. “Beyond the high grades, the key thing is that each hole we drill shows more of this stratigraphic mineralization, which means the footprint of the deposit is growing quite rapidly.” And at these grades, “the rocks are reasonably predictable so it is with great confidence we can march along strike and drill successful holes.”

Pilot Gold hopes to have a maiden resource estimate out on KCD by mid-2013.

Tara Hassan of Haywood Securities noted that the latest batch of drill results continue to demonstrate high-grade mineralization and the company’s updated geologic model suggests there is potential for increased tonnage at the target.

“The results continue to confirm the potential for significantly increased dimensions than originally thought for the KCD zone” she comments in a note to clients, adding that Pilot “remains undervalued relative to peers trading at US$43 per gold-equivalent ounce versus both global and Europe-only peers averaging US$56 per gold-equivalent ounce and US$65 per gold-equivalent ounce.”

Pilot Gold currently owns 40% of the project but has the option to increase its stake to 60% and likes to describe TV Tower as one of the largest gold systems in western Turkey. The property is next to the Kirazli gold deposit owned by Alamos Gold (AGI-T) and is just 20 km northwest of the Halilaga copper-gold project, another joint venture partnering Pilot Gold and Teck.  

Hole KCD-50 was collared about 70 metres to the northwest of hole KCD-39, which the company said in September returned 5.94 grams gold, 12.6 grams silver and 0.53% copper over 137.1 metres.

According to Smith the geologic model for the KCD zone has evolved from strictly breccia-hosted mineralization to a configuration involving high-grade stratiform mineralization, which she believes significantly increases the zone’s tonnage potential.

Other notable assay results from the recent drilling include 2.11 grams gold, 7.4 grams silver and 0.046% copper over 43.1 metres, and 2.69 grams gold, 4.0 grams  silver, 0.39% copper over 22.5 metres in hole KCD-58. Hole KCD-57 returned 1.11 grams gold, 12.5 grams silver and 0.318% copper over 23.9 metres.

Recent rock chip sampling has also uncovered new targets including the Columbaz low-sulphidation epithermal vein system, which returned 39 grams gold and 290 grams silver.

The TV Tower project lies in a 71-sq-km tract of northwestern Turkey’s Biga peninsula and targets on the property range from high- and low-sulphidation epithermal gold and silver to porphyry gold-copper. TV Tower is interpreted to contain multiple zones of gold mineralization nested within what appears to be a large, highly altered volcanic centre.

Many of the zones have widespread epithermal alteration with supporting geophysical and geochemical signatures typical of those seen at other high-sulphidation gold deposits such as Alamos Gold’s Kirazli and Agi Dagi projects and porphyry copper-gold deposits like Halilaga.

This year Pilot will complete 10,000 metres of drilling and expects to drill 25,000-30,000 metres next year, half of which will go to exploring the KCD zone and the remainder for other targets on the property. In the centre of the property the company has a combination of bulk tonnage and bonanza-style epithermal targets and in the south there is a drilled gold discovery called Kayali. “TV Tower is a series of projects on one property,” says Lennox-King. “KCD is leading the charge with spectacular drill results and as that goes on, we are going to bring the other targets on line.”

Pilot Gold has 85.2 million shares outstanding and as of Sept. 2012 some of its institutional shareholders included Newmont Mining (NMC-T, NEM-N) (16.15%); Royce and Associates (5.4%); Teck Resources (5.4%); Beutel Goodman & Company (2.8%); Kleinheinz Capital Partners (2.0%); and Blackrock Advisors (1.1%). Pilot Gold’s management and insiders hold about 3.6%.