Halilaga

Halilağa is a copper-gold porphyry project located 20 kms southeast of TV Tower. In 2012, Pilot Gold completed an initial NI 43-101 resource estimate and an NI 43-101 preliminary economic assessment (PEA¹) for the property. The PEA illustrates the concept of a straight-forward, open-pit mining operation. The project hosts a number of key attributes, including favourable terrain, low elevation, access to infrastructure, and high grades at surface. There also exists potential to improve project economics through contract mining and equipment leasing, metallurgical improvements and government tax incentives.

Preliminary Economic Assessment
Completed in 2012, the Halilağa PEA suggests that conceptually, the project may be viable in today’s cost environment within the very preliminary parameters of a PEA. The Halilağa PEA presents the concept of a conventional open-pit mining scenario (with an approximate 1:1 strip ratio) and standard milling and floatation processing for recovery of copper and gold.  The Halilağa PEA illustrates a simplified economic model to suggest a pre-tax NPV (7%) of $675 million and 26% IRR (base case of $1,200/oz gold and $2.90/lb copper). With total projected capital costs of $1.17 billion (including contingency of $200 million), after-tax payback is projected at 2.1 years with potential to improve project economics through contract mining and equipment leasing, metallurgical improvements and government tax incentives.

Click here to read more about the PEA completed in 2012.

Large property in mining-friendly jurisdiction
Located in northwest Turkey, Halilağa was discovered by Fronteer Gold. The project is located in an area that includes large open pit clay, quartz and coal mines, a major power plant, and tile factories. Power is readily available from a nearby coal-fired generating station. The project consists of 19 licenses covering 93 square kms. Copper-gold porphyry mineralization discovered to date comprises a single zone flanked by, and probably related to, high sulphidation epithermal alteration.                                                                                    

Drill highlight: thick zones of mineralization starting from surface
Since its discovery in 2007, the Kestane porphyry zone at Halilağa expanded rapidly through drilling, which returned significant thicknesses of copper-gold mineralization extending over a strike length of 1,200 metres and a width of up to 850 metres, with drill intercepts ranging over 600 metres.  Drill hole HD-01 returned 0.50 g/t gold and 0.53% copper over 298.2 metres from surface, including 1.03 g/t gold and 1.03% copper over 105.4 metres.

Click here to see a comprehensive table of drill intercepts completed to date.

Metallurgical work
Initial metallurgical work has been undertaken with samples from two holes responding well to flotation testing and producing a final concentrate grade of 35-40% copper with 85-90% overall copper recovery. Gold grades in the final concentrate were approximately 25 g/t with overall gold recovery in the range of 65-70%.

Resource estimate
A  project-first resource estimate was completed in 2012, returning an Indicated resource of 1.665 million oz Au at 0.31 g/t Au and 1.112 billion lbs Cu at 0.30% Cu (168,167,000 tonnes); and an Inferred resource of 1.661 million oz Au at 0.26 g/t Au and 1.007 billion pounds of copper at 0.23% copper (198,668,000 tonnes).

Click here to view a table of the Halilaga Resource Estimate, and to read about resource estimation methodologies.

Partnership with a major
Teck Resources Limited's Turkish subsidiary, Teck Madencilik Sanayi Ticaret A.Ş. , (“Teck”) is Pilot Gold’s 60% joint venture partner and project operator.

                                           

Our focus today
In 2013, Pilot Gold and Teck will continue to advance Halilağa through strategic studies, including economic, metallurgical, hydrological, environmental and engineering analysis to validate the conceptual economics and potential of this porphyry project.
 

1 The Halilağa PEA is preliminary in nature; readers are cautioned that the economic analysis summarized in the Halilağa PEA and highlighted on this website are only intended to provide an initial, high-level review of the project. Further studies, including engineering and economics, are required (typically as a Pre-Feasibility Study ["PFS"]) with regards to infrastructure and operational methodologies. Moreover, the Halilağa PEA mine plan and economic model include the use of a significant portion of Inferred resources which are considered to be too speculative geologically to be used in an economic analysis, except as permitted by NI 43-101 for use in PEAs, as mineral resources that are not mineral reserves do not have demonstrated economic viability and are too speculative geologically to have the economic considerations applied to them that would enable them to be characterized as mineral reserves. Furthermore, mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. 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, nor is there any guarantee that the project economics or production profile described in the Halilağa PEA would be achieved.  Mineral Resources and Mineral Reserves are also subject to risks related to metallurgical, environmental, permitting, legal, title, taxation, socio-economic, marketing, political, and other relevant issues, that are beyond the control of the Pilot Gold. Accordingly, at the present level of development there are no mineral reserves at Halilağa. For further details on Halilağa, please view the NI 43-101 Technical Report, “Preliminary Economic Assessment Technical Report for the Halilağa Project, Turkey”, dated October 10, 2012, filed on SEDAR at www.sedar.com.

Moira Smith, Ph.D., P.Geo., Chief Geologist, Pilot Gold, is the Company's designated Qualified Person within the meaning of NI 43-101 and has reviewed and validated that the information contained herein is accurate.

Click on the thumbnails below to view maps of Halilaga.

Regional geology
The Halilağa property is located in the south-central portion of the Biga Peninsula in Western Turkey, a lithologically and structurally complex region with a long history of industrial mineral (clay, quartz, coal, dimension stone), gold and base metal mining. 

The basement rocks of the Biga Peninsula consist of Paleozoic metamorphic rocks and Mesozoic accretionary mélange consisting of eclogitic, clastic and carbonate rocks. Intrusive rocks ranging from granite to quartz diorite cut these basement rocks, which are in turn overlain by calc-alkaline and alkaline Oligocene-Miocene volcanic and related sedimentary rocks ranging in age from 42-23 Ma.  The Miocene volcanic suite includes andesite, latite, dacite, rhyodacite flow dome facies and volcaniclastic sequences (including ignimbrites), and is the primary host for epithermal gold and silver mineralization within the Biga Peninsula.   This sequence is intruded by co-magmatic quartz diorite to quartz monzonite bodies, giving rise to associated Cu-Au porphyry and skarn mineralization.

Structural geology
The Halilağa property is transected by major structures which relate to, or are part of, the North Anatolian Fault System. The general architecture of the faults is controlled by ENE-WSW transtension. Local transpressional faulting has been interpreted for the Kestane area, leading to the local exhumation of the Kestane porphyry and older stratigraphy related to a series of ENE-trending horsts and grabens.   The overlying Upper Miocene-Lower Pliocene volcanic succession is restricted to the grabens.

All post-basement volcano-sedimentary sequences show a clear tilt to the NW, N or NE by up to 35 degrees which is more pronounced in the vicinity of major structures. Tilting of the rocks could be due to movement related to the North Anatolian Fault System.

Property Geology
The Halilağa property is underlain by a sequence of Oligocene-Miocene volcano-sedimentary rocks. The local basement to this sequence consists of schist and carbonate rocks which outcrop in the southeast portion of the property in the Bakirlik Tepe area. The Miocene andesites within the sequence are interpreted to be volcanic to sub-volcanic, with overlying and intercalated tuff units; the latter are now present only as silicified erosional remnants at higher elevations.

A polyphase batholith intrudes the basement rocks, generating areas of widespread metasomatism and skarn alteration.  The various phases of the batholith have not been studied in any detail, but it is thought to average granodiorite in composition.  One phase of this batholith, the 28 Ma Kestane porphyry is the primary host for mineralization, and has been studied in more detail.  Petrographic data suggest that it averages quartz monzonite in composition, with an overall crowded porphyry texture, with dominantly feldspar and hornblende phenocrysts in a fine-grained matrix.  Some difference of opinion exists between various researchers studying the Kestane porphyry, with some ascribing most of the mineralization to a single phase and others noting up to three phases with varying Cu-Au endowments.  The mineralization is cut by barren andesite dykes.

Alteration and Mineralization
The Halilağa alteration system covers a large (4 km x 2 km) area. Deposit types (porphyry, high sulphidation epithermal, and skarn) in and near the Halilağa property are the varied products of magmatic-hydrothermal processes related to structurally-controlled high level porphyry intrusions.

Porphyry Cu-Au
The Central Zone of the Cu-Au mineralized Kestane porphyry is affected by strong potassic alteration (K-feldspar, biotite and magnetite) with the highest gold and copper grades associated with early biotite, abundant magnetite (5-8%), chalcopyrite and quartz veining.  Chalcopyrite, in some cases accompanied by trace amounts of pyrite, is the dominant sulphide in the potassic-altered zone. Outcrops and drill core are characterized by dense stockwork veining of at least four generations, including early, semiductile quartz veins (“A” veins), quartz veins with axial sulphides and magnetite (“B” veins), veins composed dominantly of pyrite with sericitized margins (“D” veins) and late anhydrite/gypsum and calcite veins.  In outcrop, quartz veins dominantly strike northwest and dip steeply to the northeast.

Potassic-altered rocks are variably overprinted by weaker phyllic alteration, consisting of pervasive sericite, pyrite, quartz and chalcopyrite, which is at least partially magnetite destructive. Argillic alteration overprints the potassic alteration locally, although it appears to be restricted mainly to near-surface areas, the result of supergene processes.  Other evidence of weathering and acid leaching in surficial areas includes the presence of limonite and oxidized boxworks within D veins.

The Central Zone is characterized by an exposed 0 to 20-metre-thick leached zone with elevated gold values, low copper values and clay alteration, followed by a 20 to 40-metre-thick supergene copper enriched zone consisting of up 1 to 2% copper as covellite, digenite and minor chalcocite, followed by a hypogene copper zone of chalcopyrite-pyrite ± magnetite at shallow depths.  Chalcopyrite mineralization gives way to relatively barren pyrrhotite ± magnetite at greater depths.  One puzzling aspect of the Kestane porphyry is the apparent lack of a central chalcopyrite-bornite zone characteristic of most other classic, zoned porphyry systems.  This suggests the possibility that drilling to date has tested the marginal portions of a porphyry system, with the core area yet to be discovered.

Drilling to date in the Central Zone of the Kestane Porphyry has intersected copper-gold porphyry mineralization over a strike length of 1,200 metres, a width of 750 metres, and average thicknesses of 200 to 400 metres.  The northern portion of the mineralized zone has been offset down to the north on a moderately to steeply north-dipping fault zone, such that it is now covered by up to 200 metres of post-mineral volcanic and sedimentary rock.  Additional faults within the mineralized zone are likely, based on abrupt juxtapositions of alteration types. 

A broad area of sericite alteration with oxidized pyrite veins is located a few kms to the southeast of Halilağa, perhaps representing the phyllic zone of another porphyry system, or the continuation of the existing one.

 Kunk high sulphidation epithermal system
At Kunk Tepe, one kms south-southeast of the Central Zone, east-northeast- and east-southeast-trending ridges are capped by extensive areas of silicified volcanic rock. These “lithocaps” consist of massive to vuggy quartz depending on host rock, alunite and iron oxides ranging from hematite to limonite. The silicified rocks are flanked and underlain by strongly limonitic to pyritic breccias and argillic to advanced argillic altered volcanic rocks, which are the host for high sulphidation gold mineralization.  Limited drilling has returned up to 0.3 ppm gold.  The close proximity to and higher elevation of Kunk Tepe relative to the Central Zone suggests a genetic link.

Skarn Cu Mineralization
At Bakirlik Tepe, four kms ESE of the Central Zone, garnet-wollastinate-magnetite-epidote skarn is hosted in carbonaceous limestone near the contact with a quartz monzonite intrusion. Other areas are affected by widespread hornfelsing. Copper is in the form of chalcopyrite and associated weathering products.  Limited drilling has returned short intervals of copper and gold mineralization.

Moira Smith, Ph.D., P.Geo., Chief Geologist, Pilot Gold, is the Company's designated Qualified Person within the meaning of NI 43-101 and has reviewed and validated that the information contained herein is accurate.

Click on the thumbnails below to view cross-sections of the Halilaga project.

Since 2004, Pilot Gold’s technical team has played a key role in establishing the prospectivity and gold endowment of the Biga District, and was instrumental in the discovery of the Halilağa porphyry in 2006. From that time through 2010, 56 diamond drill holes totaling 18,866 metres and three reverse circulation holes totaling 398 metres were drilled to test the porphyry-style mineralization identified at the Central Zone at Kestane. Additional drilling also tested for high-sulphidation gold mineralization around the Kunk Hill lithocap (eight holes totaling 2,264.3 metres), and for skarn-style mineralization at Bakirlik Tepe (12 holes totaling 2,348.8 metres).

In 2011, an 18,000-metre core drilling program was completed, with a focus on infill drilling the Central Zone at Kestane that resulted in a project-first resource estimate.

Drilling in 2012 returned broad intervals of continuous copper-gold mineralization, including:

  • 0.26 g/t gold and 0.23% copper over 194.0 metres, including 0.87 g/t gold and 0.69% copper over 28.5 metres in HD-108;
  • 0.76 g/t gold and 0.60% copper over 35.2 metres in HD-108A;
  • 0.23 g/t gold and 0.35% copper over 401.2 metres, including 0.65 g/t gold and 1.84% copper over 35.7 metres in HD-109;
  • 0.40 g/t gold and 0.29% copper over 132.2 metres, including 0.56 g/t gold and 0.41% copper over 51.5 metres in HD-110;
  • 0.23 g/t gold and 0.20% copper over 169.5 metres in HD-111; and,
  • 0.64 g/t gold and 0.52% copper over 134.90 metres, including 0.78 g/t gold and 0.60% copper over 81.40 metres in HD-115.

To view a comprehensive table of all drill results since 2006, including non-reportable intercepts, please click here.

Moira Smith, Ph.D., P.Geo., Chief Geologist, Pilot Gold, is the Company's designated Qualified Person within the meaning of NI 43-101 and has reviewed and validated that the information contained herein is accurate.