May 12, 2016

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 12, 2016) - Pilot Gold Inc. (TSX:PLG) ("Pilot Gold" or the "Company") is pleased to announce its financial and operating results for the three months ended March 31, 2016. 

Company highlights through and subsequent to March 31, 2016:

  • Appointed Cal Everett as President and CEO.
  • Closed a C$4.47 million non-brokered private placement.
  • Commenced infill and step-out drilling along the 7 km-long, 2 km-wide "Historic Mine Trend" at Goldstrike targeting unmined and/or undrilled areas between, around and immediately below the historic pits.
  • Reported initial results from the 2016 drill program at Goldstrike, with 15 of 20 RC holes intercepting oxide gold mineralization over significant widths. Highlights include1:
    • 35.1 m grading 2.10 g/t Au, including 13.7 m grading 4.42 g/t Au in hole PGS019;
    • 30.5 m grading 1.07 g/t Au in hole PGS020;
    • 27.4 m grading 1.56 g/t Au, including 19.8 m grading 1.98 g/t Au in hole PGS025;
    • 57.9 m grading 1.19 g/t Au, including 30.5 m grading 1.65 g/t Au in hole PGS026;
    • 47.2 m grading 1.14 g/t Au in hole PGS027; and
    • 24.4 m grading 1.05 g/t Au, including 10.7 m grading 1.68 g/t in hole PGS035.
  • Commenced a ten hole, large diameter core drilling and initial metallurgical program at Goldstrike, with four holes completed to date.
  • Commenced a four hole RC drill program (approximately 1,700 metres) targeting high-grade gold mineralization in the Secret Canyon Shale immediately below and southwest of Kinsley's historic Main Pit.

Goldstrike - Utah

Results from the initial 20 infill- and step-out drill holes of the 2016 program include significant oxide intercepts over the eastern portion of the 7 km-long Historic Mine Trend, further confirming that gold is widespread and predictable within a particular stratigraphic interval, the basal Claron Formation. 15 of 20 RC holes intercepted oxide gold mineralization over significant widths, with 30% of these first 2016 holes returning at least 1 g/t gold over an average of at least 37 metres.

The scope of the program is open-ended and dependent on results. The objective is to advance Goldstrike to a resource estimate by year end, incorporating new and historical RC drill hole data over a broad area. At least 100 drill holes, including 10 core drill holes and an initial metallurgical program, are covered in the amended Phase 1 2016 drill budget, with the program progressing as anticipated.

Pilot Gold owns 100% of Goldstrike. For the three months ended March 31, 2016, expenditures capitalized to Goldstrike were $0.66 million, including: drilling and assaying ($0.19 million), lease and claims fees ($0.19 million), salaries ($0.12 million) and analyses and surveys ($0.03 million). 

SELECTED FINANCIAL DATA

The following selected financial data is derived from the unaudited condensed interim consolidated financial statements and related notes thereto for the three months ended March 31, 2016 (the "Interim Financial Statements"), as prepared in accordance with International Financial Reporting Standards. Details of these results are described in the Interim Financial Statements and related Management's Discussion and Analysis ("MD&A"). These documents can be found on the Company's website (www.pilotgold.com) or on SEDAR at www.sedar.com

1 See press releases dated April 12, 2016 and May 10, 2016.

All amounts are presented in United States dollars unless otherwise stated.

  As at
March 31, 2016
(In 000s)
December 31, 2015
(In 000s)
Cash and short-term investments $ 9,472 $ 7,912
Working capital $ 9,698 $ 8,215
Total assets $ 96,627 $ 93,730
Current liabilities $ 589 $ 477
Non-current liabilities $ 428 $ 604
Shareholders' equity $ 72,497 $ 69,609
   
  Three months ended March 31,
(In 000s except per share data)
  2016 2015
Attributable to shareholders:        
Loss for the period $ 1,647 $ 1,620
Loss and comprehensive loss for the year $ 730 $ 5,954
Basic and diluted loss per share $ 0.01 $ 0.02

Total assets comprise primarily exploration properties and deferred exploration expenditures of $77.63 million and cash, cash equivalents and short term investments of $9.47 million. The 40% share of TV Tower owned by Teck and 20.9% of Kinsley owned by Nevada Sunrise comprise the balance of the $23.11 million non-controlling interest on the Company's statement of financial position. Total assets also include $0.82 million in receivables and prepayments, and $5.57 million in value recorded for the Company's 40% interest in the Halilaga copper-gold project in Turkey.

The increase in working capital since year end 2015, reflects the $3.30 million net proceeds from the private placement completed on March 4, 2016 and the impact of changing foreign exchange rates of $0.46 million, offset by the costs incurred toward the 2016 exploration programs of $0.96 million and cash outflows for operating expenditures of $1.35 million.

Total liabilities at March 31, 2016 and December 31, 2015, primarily reflect accounts payable and accruals recorded at period end arising from ongoing activities, and also includes a deferred tax liability ($0.35 million as at March 31, 2016) arising from the impact of foreign exchange on the carrying value of TV Tower, which is $0.13 million lower than as at December 31, 2015.

The most significant contributors to the losses in the three months ended March 31, 2016 were the cost of wages and benefits of $0.53 million, office and general costs of $0.39 million, as well as non-cash stock based compensation of $0.29 million. The loss per share decreased to $0.01 for each the three months ended March 31, 2016 a decrease of $0.01 over the same period in 2015.

The net other comprehensive income attributable to shareholders for the three months ended March 31, 2016, was $0.92 million compared to a loss of $4.40 million in 2015, and is driven by exchange differences on translation of foreign currency subsidiaries. The impact from exchange differences will vary from period to period depending on the rate of exchange; in the period between January 1, 2016 and March 31, 2016, the United States dollar depreciated 7.7% relative to the Canadian dollar (2015: 8.5% appreciation)

Moira Smith, Ph.D., P.Geo., Vice President Exploration and Geoscience, Pilot Gold, is the Company's designated Qualified Person for this news release within the meaning of National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101") and has reviewed and validated that the scientific and technical information contained in this release is accurate.

ABOUT PILOT GOLD

Pilot Gold is led by a proven technical and capital markets team that continues to discover and define high-quality assets. Our two core projects are Goldstrike in Utah and Kinsley Mountain in Nevada. The Company also holds important interests in two Turkish assets, Halilaga and TV Tower, and has a pipeline of Western US projects characterized by large land positions and district-wide potential that can meet our growth needs for years to come.

Goldstrike and Kinsley are early stage exploration projects; the potential quantities and grades disclosed herein are conceptual in nature and, except for the mineral resource estimate at the Western Flank deposit at Kinsley, and a small resource determined for a previous operator at Goldstrike, there has been insufficient exploration to define a mineral resource for other targets disclosed herein. It is uncertain if further exploration will result in these targets being delineated as a mineral resource. The potential to define an additional mineral resource at Goldstrike or Kinsley is conceptual in nature and there has been insufficient exploration to define a mineral resource thereat. It is uncertain if further exploration will yield any additional mineral resources at the Company's mineral property interests. 

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 with respect to the anticipated timing and closing of the Offering, anticipated use of proceeds of the Offering, those that address potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans. 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 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, the amenability of mineralization to produce a high-grade or high-quality concentrate (as there can be no assurances as to the results of the metallurgical testing and no inferences should be drawn therefrom), the accuracy of any metallurgical testing completed to date, the potential of low capital cost options for potential mining and processing at Kinsley or processing at a typical Nevada refractory ore processing facility, 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 involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to the interpretation of results and/or the reliance on technical information provided by our joint venture partner or other third parties as related to the Company's mineral property interests; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; the costs and timing of the development of new deposits; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; the timing and success of exploration activities generally; delays in permitting; possible claims against the Company or its joint venture partners; 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 Annual Information Form of the Company dated March 17, 2016 in the section 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 unless required by law.