Pilot Gold Provides Exploration Update and Reports Third

Pilot Gold Provides Exploration Update and Reports Third Quarter
Financial Results 
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/09/12 -- Pilot Gold
Inc. (TSX:PLG) ("Pilot Gold" or the "Company") reports financial
results for the third quarter ended September 30, 2012 and provides
an update on exploration activities.  
"We achieved significant advancements on Pilot Gold's key projects in
the third quarter, including exceptional results at both TV Tower and
Kinsley Mountain," stated Matt Lennox-King, Pilot Gold President and
CEO. "The momentum has continued into the fourth quarter, as we
released a robust PEA on Halilaga, reported strong intercepts from
Kinsley, and raised C$37.5 million as a result of a bought-deal
financing, the full exercise of the over-allotment option and private
placements by our strategic partners, Newmont Mining and Teck
Resources."  
RECENT HIGHLIGHTS: 


 
--  Raised aggregate gross proceeds of C$37.5 million on November 1st from
    bought-deal financing led by National Bank Financial Inc. and a
    syndicate of underwriters (the "Offering"), and concurrent private
    placements with subsidiaries of Newmont Mining and Teck Resources 
--  Announced positive results of a preliminary economic assessment ("PEA")
    for the Halilaga copper-gold project in northwest Turkey 
--  Reported initial results from the high-grade KCD target at TV Tower that
    included 5.94 g/t gold, 12.6 g/t silver and 0.53% copper over 137.1
    metres in KCD039 
--  Released strong drill results from Kinsley Mountain that demonstrate
    mineralization extending over a 2.2 kilometre trend, including 5.48 g/t
    gold over 20.4 metres in PK14C, 2.3 g/t gold over 19.8 metres in PK057,
    and 6.03 g/t gold over 13.7 metres in PK061 
--  Assumed operational control at TV Tower with an option to increase to
    60% ownership and commenced a 16,000-metre, year-one resource definition
    and exploration drill program 
--  Earned an initial 51% interest at Kinsley, and elected to earn-in to a
    65% interest in the property 

 
WORK PROGRAM UPDATES 
TV Tower  
Pilot Gold became project operator at TV Tower on June 20, 2012 and
holds an option to increase its interest in TV Tower to 60% over the
next three years. Our 2012 program includes 9,000 metre
s of core
drilling designed to infill and expand the mineralized footprint of
the KCD target.  
Initial drilling by Pilot Gold at KCD has returned one of the
highest-grade gold, silver and copper drill intervals ever reported
in Turkey, including KCD-39, which returned 5.94 g/t gold, 12.6 g/t
silver and 0.53% copper over 137.1 metres. Approximately 6,075 metres
in 29 holes have been completed at the KCD target, with assays
pending for 27 holes. Three drills are operating at TV Tower. In
addition to drilling, a property-wide effort including detailed
geological mapping, geochemical sampling, airborne geophysics, and
target definition has been underway since March. This work has
identified several additional high-potential targets, including
gold-silver bearing quartz veins with multi-ounce gold and silver
grades. Systematic drill testing of other high-priority targets will
begin in early 2013. Through the nine months ended September 30,
2012, we incurred $1.51 million in earn-in eligible expenditures in
accordance with the TV Tower Agreement. Our 2012 budget is $4.13
million. 
Teck Resources Limited's Turkish subsidiary, Teck Madencilik Sanayi
Ticaret A.S. ("TMST"), is Pilot Gold's 60% joint venture partner at
TV Tower. 
Kinsley Mountain: 
In mid-September, the Company concluded an 11,864 metre drill program
focused on expanding the mineralized footprint around the historic
open pits on Kinsley Mountain and testing targets located 600 metres
to the northwest of the historic operation. Through September 30,
2012, we had capitalized $3.31 million (year-ended December 31, 2011:
$1.13 million) in expenditures at Kinsley, compared to a revised
budget of $2.9 million for the year. Capitalized costs include values
attributable to stock-based compensation, share issuances and other
non-cash items directly relating to the advancement of the property
that are not eligible toward earn-in. 
Highlights to date include: 


 
--  2.30 g/t gold over 19.8 metres in PK057, extending mineralization over a
    2.2-kilometre trend length 
--  6.03 g/t gold over 13.7 metres in PK061, 600 metres northwest of the
    nearest historic pit 
--  5.48 g/t gold over 20.4 metres in PK014C 
--  Staked 41 additional claims, consolidating our land position 
--  Submitted a Plan of Operations for expanded exploration activities 

 
The 2012 program identified a north-trending zone of higher-grade
mineralization measuring at least 400 metres by 100 metres. This
north-trending zone remains open in all directions in the Western
Flank area. Drilling has also intercepted high grades at deeper
stratigraphic levels than previously encountered and identified a new
zone of mineralization, Candland Canyon on the northeast side of the
mine trend.  
During Q2 2012, Pilot Gold submitted a Plan of Operations for 100
acres of disturbance to the Bureau of Land Management ("BLM") that
will allow for expanded exploration activities. The Company has a
permit in place for additional drilling at the Western Flank target.
Pilot Gold plans to apply for an additional Notice of Intent permit
for drilling the northern claim blocks.  
In September 2012, Pilot Gold added significantly to the property
position at Kinsley by staking 41 unpatented lode mining claims
underlain by highly prospective geology on BLM-administered ground
held prior to that point by another company. The majority (36) of the
new claims are located between two previously separate claim blocks
at Kinsley, creating a contiguous property and consolidating access
to the main mineralized trends to the north. The additional staking
brings the total to 332 claims. Surface work including mapping and
rock and soil sampling are underway on the newly added ground.  
Pilot Gold completed an earn-in to an initial 51% interest at Kinsley
during the second quarter of 2012, and elected to exercise an option
to earn a further 14% interest in the property. The Company has
already incurred approximately 90% of the expenditure requirement to
attain that 65% interest, and anticipates completing earn-in in early
2013. A subsidiary of Nevada Sunrise Gold Corporation is our joint
venture partner at Kinsley. 
Halilaga: 
On October 10th, 2012 the Company released the results of a PEA that
highlights the economic benefits of the higher grades of gold and
copper at surface, as well as the benefit from available
infrastructure for mine development. The results of the Halilaga PEA
provide convincing support for continued resource conversion and
expansion drilling, as well as geotechnical, metallurgical and
engineering studies. 
PEA Highlights (Base Case: USD$1,200/oz. Au and USD$2.90/lb. copper)
include: 


 
--  Pre-tax IRR of 26%; After-tax IRR of 20% 
--  Pre-tax NPV7% of $675 million; After-tax NPV7% of $474 million 
--  2.1 year pre-tax payback; 2.7 year after-tax payback 
--  Approximately a 1:1 strip ratio 

 
The Halilaga PEA is preliminary in nature. It includes inferred
mineral resources that are considered too speculative geologically to
have the economic considerations applied to them that would enable
them to be characterized as mineral reserves, and there is no
certainty that the PEA will be realized. 
Highlights for the quarter from resource expansion and co
nversion
drilling included 0.64 g/t gold and 0.52% copper over 134.9 metres in
HD-115. A total of 7,484 metres comprising 20 completed drill holes
have been completed in 2012. Results from eight holes are currently
pending. 
Budgeted expenditures for 2012 are $4.87 million, with Pilot Gold's
share totalling $1.95 million. Our share of actual expenditures
through the end of the first nine months in 2012 was $1.31 million.  
The Halilaga PEA recommends metallurgical, environmental and
engineering studies, and community activities to continue to advance
and de-risk the project. We expect to continue discussions with TMST,
our 60% partner at Halilaga, on strategic next steps for this
compelling development project.  
FINANCIAL DATA  
The following selected financial data is derived from our
consolidated interim financial statements for the three and nine
months ended September 30, 2012, as prepared in accordance with
International Financial Reporting Standards.  


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Expressed in 000s, except per share  Three months ended   Nine months ended
 data)                                     September 30,       September 30,
                                          2012      2011      2012      2011
----------------------------------------------------------------------------
Loss for the period                   ($1,814)  ($2,058)  ($4,658)  ($9,742)
Loss and comprehensive loss for the                                         
 period                               ($1,328)  ($4,479)  ($4,828) ($11,903)
Basic and diluted loss per share       ($0.03)   ($0.03)   ($0.08)   ($0.18)
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                           As at            
                                                September 30,   December 31,
                                                         2012           2011
                                                    (in 000s)      (in 000s)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash and short-term investments                        $7,151        $18,420
Working capital                                        $7,088        $17,846
Total assets                                          $38,560        $37,493
Current liabilities                                      $937         $1,050
Non-current liabilities                                   $31            $74
Shareholders' equity                                  $37,592        $36,370
----------------------------------------------------------------------------
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As described in our unaudited condensed interim consolidated
financial statements, a portion of the comparative period reflects
the application of continuity of interest accounting. Pursuant to the
application of continuity of interest accounting, balances recognized
and transactions recorded through March 30, 2011, reflect an
allocation of cash flows, expenditures and activities based on the
amounts recorded by Fronteer Gold Inc. ("Fronteer") attributable to
Pilot Gold's assets and business. March 30, 2011 was determined to be
the effective date for accounting purposes of the arrangement
agreement between Fronteer and Newmont Mining, pursuant to which
Pilot Gold ceased to be a wholly-owned subsidiary of Fronteer and
Newmont acquired all the outstanding common shares of Fronteer. 


 
--  For the three months ended September 30, 2012, we reported a net loss of
    $1.81 million compared to a net loss of $2.06 million for the three
    months ended September 30, 2011. The loss per share for the three months
    ended September 30, 2012 was $0.03 (three months ended September 30,
    2011: $0.03). The most significant contributors to the loss for the
    three and nine months ended September 30, 2012 were stock based
    compensation ($0.33 million and $1.37 million respectively), the cost of
    wages and benefits not directly relating to exploration on any of the
    Company's properties ($0.41 million and $1.31 million respectively), as
    well as $0.54 million (for both three and nine months) for the write
    down of mineral property interests the Company determined that it will
    no longer actively pursue. Expenses for the nine months ended September
    30, 2012 were offset by income resultant from a change in fair value of
    our financial instruments ($0.56 million) and the write up of a VAT
    receivable in Turkey re-designated as recoverable ($0.39 million). In
    the comparative periods, the most significant contributors to the losses
    were also stock based compensation and wages as well as property
    investigation expenses.
      
--  Other comprehensive income (loss) for the three and nine months ended
    September 30, 2012 was $0.49 million and a loss of $0.17 million,
    respectively (three and nine months ended September 30, 2011: loss of
    $2.42 million and $2.16 million, respectively). The nine months ended
    September 30, 2012 includes a net value loss on financial assets of
    $0.98 million (nine months ended September 30, 2011, loss of $0.08
    million), relating to the revaluation of common shares the Company holds
    in other publicly listed companies. Other comprehensive loss for the
    nine months ended September 30, 2012 also includes a $0.81 million gain
    (September 30, 2011: loss of $2.08 million) from the impact of exchange
    gains and losses arising from exchange differences further to the
    translation of our foreign operations with a non-United States dollar
    functional currency.
      
--  Current assets decreased to $8.03 million as at September 30, 2012
    (December 31, 2011: $18.90 million), and comprise primarily cash and
    short-term investments of $7.15 million (December 31, 2011: $18.42
    million). The decrease reflects cash outflows related to exploration and
    corporate activities through the nine months ended September 30, 2012.
    The remaining balance of current assets comprises receivables and
    prepayments.
      
--  The value of the initial shares and warrants issued to TMST relating to
    the TV Tower Earn-in Option ($4.4 million) has been capitalized to the
    balance sheet. This non-current asset also includes the value of legal
    costs paid to secure the earn-in option, and certain exploration
    expenditures incurred on TV Tower.
      
--  The net cash outflow relating to operating activities through the nine
    months ended September 30, 2012 was $3.61 million, compared to a net
    cash outflow of $3.13 million in the same period of the prior year. The
    most significant components of which were wages and benefits and office-
    related costs (aggregate of $2.47 million and $1.78 million through the
    nine months ended September 30, 2012 and 2011 respectively). Cash
    outflows relating to our continuing investment in mineral properties was
    $3.90 million and $4.49 million through the nine months ended September
    30, 2012 and 2011, respectively.
      
--  At September 30, 2012, there were 62,485,286 issued and outstanding
    shares (September 30, 2011: 59,085,286). The increase reflects primarily
    the shares issued to TMST to secure the TV Tower earn-in option.
    Subsequent to period end, the Company issued an aggregate of 22,725,048
    additional common shares as part of the Offering and concurrent private
    placements. 

 
This press release should be read in conjunction with Pilot Gold's
unaudited condensed interim consolidated financial statements and
Management's Discussion and Analysis for the three and nine months
ended September 30, 2012. These documents can be found on the
Company's website (www.pilotgold.com) or on SEDAR at www.sedar.com.
All amounts are presented in United States dollars unless otherwise
stated. 
ABOUT PILOT G
OLD  
Pilot Gold is a gold exploration company led by a proven technical
team that continues to discover and define high-quality projects
featuring strong grades, meaningful size and mining-friendly
addresses. Our three key assets include the TV Tower and Kinsley gold
projects and a 40% interest in the Halilaga copper-gold porphyry
project, each of which has the ability to drive the Company forward.
For more information, visit www.pilotgold.com.  
TECHNICAL INFORMATION:  
Moira Smith, P. Geo., Pilot Gold Chief Geologist, is the Company's
designated Qualified Person for this news release within the meaning
of NI 43-101, and has reviewed and validated that the technical
information contained in this release is accurate.  
Unless stated otherwise, information of a scientific or technical
nature in this press release regarding the TV Tower, Halilaga or
Kinsley Mountain properties are summarized, derived or extracted
from, the following technical reports: "Updated Technical Report on
the TV Tower Exploration Property, Canakkale, Western Turkey",
effective July 15, 2012 and dated August 3, 2012 prepared by Paul
Gribble, C.Eng., FIMMM; "Preliminary Economic Assessment Technical
Report for the Halilaga Project, Turkey" effective August 27, 2012
and dated October 10, 2012 prepared by Gordon Doerksen, P.Eng., James
Gray, P.Geo., Garth Kirkham, P.Geo., Dino Pilotto, P.Eng., Maritz
Rykaart, P.Eng, and Kevin Scott, P.Eng.; and " Technical Report on
the Kinsley Project, Elko County, Nevada, U.S.A." effective February
15, 2012 and dated march 26, 2012 prepared by Michael Gustin, CPG and
Moira Smith, Ph.D., P.Geo.; all of which technical reports have been
filed under the Company's issuer profile on SEDAR at www.sedar.com.  
Kinsley Mountain and TV Tower are early-stage exploration projects
and do not contain any mineral resource estimates as defined by
National Instrument 43-101 Standards of Disclosure for Mineral
Projects ("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. 
The Halilaga PEA is preliminary in nature, it includes inferred
mineral resources that are considered too speculative geologically to
have the economic considerations applied to them that would enable
them to be characterized as mineral reserves, and there is no
certainty that the Halilaga PEA will be realized. Mineral resources
that are not mineral reserves do not have demonstrated economic
viability. Mineral resource estimates do not account for mineability,
selectivity, mining loss and dilution. These mineral resource
estimates include inferred mineral resources that are normally
considered too speculative geologically to have economic
considerations applied to them that would enable them to be
categorized as mineral reserves. There is also no certainty that
these inferred mineral resources will be converted to measured and
indicated categories through further drilling, or into mineral
reserves, once economic considerations are applied. 
FORWARD-LOOKING INFORMATION 
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 timing of exploration and
development plans and timing of obtaining permits or completing
earn-in obligations at the Company's mineral projects.
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, molybdenum
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,
availability of equipment, accuracy of any mineral resources and
mineral reserves, successful resolution of disputes 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, including, but not limited to,
timing of exploration and development plans at the Company's mineral
projects, completion of expenditure obligations under the Kinsley
Mountain Option Agreement; funding cash-calls made by TMST for
ongoing expenditure on the Halilaga property, successful earn-in on
the TV Tower project, including the ability to incur the minimum
annual Expenditure Requirements and future issuances of Common shares
as consideration to complete the earn-in agreement, ability to fund
cash-calls made by our joint venture partners for ongoing
expenditures on our joint venture properties; current and proposed
exploration and development, estimated future working capital, uses
of funds, future capital expenditures; information with respect to
exploration results, the timing and success of exploration activities
generally; the costs and timing of the development of new deposits,
potential quantity and/or grade of minerals, potential size of
mineralized zone, potential expansion of mineralization, potential
type of mining operation; the timing, timeline and possible outcome
of permitting or license renewal applications; the ability to
maintain or convert the underlying licenses in accordance with the
requirements of the Turkish Mining Law, government regulation of
exploration and mining operations, environmental risks, including
satisfaction of Turkish requirements relating to the periodic
submissions of Environmental Impact Assessments, title disputes or
claims, and limitations on insurance coverage involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievement of Pilot Gold to be
materially different from any future results, performance or
achievements expressed or implied by such forward looking
information.  
Such factors include, among others, risks related to the
interpretation and actual results of historical production at certain
of our exploration properties, reliance on technical information
provided by our joint venture partners or other third parties as
related to any of our other exploration properties; changes in
project parameters as plans continue to be refined; current economic
conditions; future prices of commodities; possible variations in
grade or recovery rates; failure of equipment or processes to operate
as anticipated; the failure of contracted parties to perform; 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 Company's Annual
Information Form ("AIF") for the year ended December 31, 2011 and the
Company's (final) short form prospectus dated October 25, 2012, each
in sections 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. Accordingly, readers
should not place undue reliance on forward-looking information. 
Contacts:
Pilot Gold Inc.
Matt Lennox-King
President & CEO
604-632-4677 or Toll Free 1-877-632-4677 
Pilot Gold Inc.
Patrick Reid
VP Corporate Development
604-632-4677 or Toll Free 1-877-632-4677
info@pilotgold.com
www.pilotgold.com
 
 
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