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Pilot Gold frames Turkish exploration project as ideal for current capital markets

30th January 2015

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – TSX-listed explorer Pilot Gold has completed a new preliminary economic assessment (PEA) for the Halilaga copper/gold porphyry project, in north-western Turkey, sketching metrics for a robust, low strip, technically simple and scalable openpit project, using conventional milling and flotation methods.

The Vancouver-based firm, credited with several significant discoveries, including the Long Canyon, Northumberland and Sandman gold deposits, in Nevada; the Jacques Lake and Michelin uranium deposits in Labrador, Canada; and the Kirazli and Agi Dagi gold deposits, in north-western Turkey, said the Halilaga project showed similar potential to its previous finds.

According to the PEA, Halilaga required modest up-front capital, would have a rapid payback, low cash costs, strong cash flows and generate a strong after-tax internal rate of return (IRR) of 43.1% and an after-tax net present value at a 7% discount of $474-million.

The PEA used an assumed gold price of $1 200/oz and $2.90/lb of copper.

The project was expected to mine 25 000 t/d over a 13.6-year life, with a strip ratio of 1.3:1.

It could produce copper at a cash cost of $1.08/lb, net of by-products, and could generate cumulative free cash flow of $802.9-million.

Halilaga was expected to produce about 780-million pounds of copper and 924 000 oz of gold over its lifetime.

The preproduction capital costs were estimated at $346-million, including a 25% contingency of $65.4-million.

"We have designed the optimal project for the deposit in the context of today's capital markets. The revised project more than doubles the IRR and retains the same after-tax value as the 2012 study while substantially reducing overall capital costs.

“The revised PEA leverages the established infrastructure in the district and the high grades at surface to drive rapid payback of capital, showcasing Halilaga as a standout project in the mid-size copper/gold development space,” Pilot Gold president and CEO Matt Lennox-King said.

Pilot Gold was currently advancing three key projects, including Kinsley, in Nevada, and TV Tower and Halilaga, in Turkey.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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