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Pilot Gold Announces First Tranche of Oxide Gold Results from Goldstrike Project

Pilot Gold pleased to announce the first tranche of oxide gold results from 2016 infill and step out drilling on the 7 km-long "Historic Mine Trend" on its Goldstrike Project in southwestern Utah.

Results from eight reverse circulation holes (1,364 m) have been received to date, with significant oxide intercepts in seven of them.

Highlights include:

  • 2.10 grams/tonne gold (g/t Au) over 35.1 metres, including 4.42 g/t Au over 13.7 metres in PGS019
  • 1.07 g/t Au over 30.5 metres, in PGS020
  • 0.63 g/t Au over 30.5 metres, in PGS023
  • 1.56 g/t Au over 27.4 metres, including 1.98 g/t over 19.8 metres, in PGS025
  • 1.19 g/t Au over 57.9 metres, including 1.65 g/t Au over 30.5 metres, in PGS026

Key Points:

  • Seven of eight RC holes intercepted oxide gold mineralization over significant widths.
  • 50% of the holes returned at least 1 g/t gold over at a minimum 27 metre drill hole length, well above historical drilling averages on the Historical Mine Trend.
  • PGS021 intersected a fault zone at shallower than expected depth, missing the target stratigraphic interval, and thus did not return a mineralized intercept.

Drill holes PGS019 and PGS020 were drilled to offset mineralization in drill holes PGS003 and PGS004, which returned 1.01 g/t Au over 39.6 metres and 0.84 g/t Au over 41.1 metres, respectively. Mineralization is open to the north and east of this intercept. PGS025 and PGS026 were drilled to offset mineralization in PGS010, which returned 1.06 g/t Au over 36.6 metres. Mineralization is open for extension in all directions from this site, with results from four holes in this area pending.

2016 Drill Program

The goal of the 2016 drill program is to target unmined and/or undrilled areas between and around the historic pits, and to drill test down-dip to the north of, and laterally beyond, the Historic Mine Trend into areas where gold has been confirmed but not systematically drilled off. The holes will average approximately 150 metres in length. The scope of the program is open-ended and dependent on results. At least 100 drill holes are covered in the Phase 1 2016 drill budget.

The objective is to advance the Goldstrike Project to a resource estimate by year end, incorporating new and historical RC drill hole data over a broad area.

Goldstrike Property and Geology

Goldstrike is located in the eastern Great Basin, immediately adjacent to the Utah/Nevada border, and is a Carlin-style gold system, similar in many ways to the prolific deposits located along Nevada's Carlin trend. Like Kinsley Mountain and Newmont's Long Canyon deposit, Goldstrike represents part of a growing number of Carlin-type systems located off the main Carlin and Cortez trends in largely underexplored parts of the Great Basin. The Goldstrike Property comprises 96 km2 of US federal lode claims, patented (private) claims and Utah State leases.

Previous mining at Goldstrike occurred from 1988 to 1994, with 209,000 ounces of gold produced from 12 shallow pits, at an average grade of 1.2 grams Au/tonne. Historical gold recovery is documented to be 75% from run of mine (1). The historic mine is now fully reclaimed.

Over a 12-month period, the Company compiled and digitized approximately 20 years of historical exploration and mining data, including 1519 shallow drill holes, ~100,000 blast holes and surface geological and geochemical data. A robust 3D model was generated, followed by a successful "proof of concept" 18 hole RC drill program in late 2015.

Oxide gold mineralization is dominantly hosted in sandstone and conglomerate in the basal portion of the Eocene Claron Formation, along a regional unconformity that is virtually untested where it dips under shallow sedimentary and volcanic cover. The Claron Formation extends down dip of mineralized surface exposures, which are present throughout the northern half of the Goldstrike Property, an area covering approximately 42 km2. The entire area is considered prospective for gold mineralization. In addition to the exposures in the Historic Mine Trend, six other large windows to the northwest of the Historic Mine Trend expose the basal Claron Formation, and all contain drill-tested oxide gold mineralization. In particular, the Mineral Mountain area, located approximately 4 km north of the Historic Mine Trend and as described in the Report (as defined below), contains a current Inferred Resource of 41,144 ounces of gold, contained in 3.4 million tons of material grading 0.0122 ounces per ton (0.418 g/t) of gold. Additional drilling may expand the mineralized footprint of this zone, which is open in several directions, and is planned for 2016.

Gold is also present in Mississippian through Permian carbonate shelf strata immediately underlying the Claron Formation, where they constitute the principal host rocks in the westernmost two pits on the Historic Mine Trend. While these rocks are more typical of Carlin-style host rocks, and are exposed over the entire southern half of the property, they have not been extensively tested. The overall potential in these rocks is relatively unknown, but presumed to be significant.


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