VANCOUVER, B.C. - Pilot Gold Inc. (PLG - TSX) ('Pilot Gold' or the 'Company') is pleased to announce it has signed an Option Agreement with Logan Resources Ltd ('Logan') under which Logan may earn up to an 80% interest in up to four of its nine Great Basin Portfolio Properties (the 'Properties'). The Properties are located within the eastern Great Basin, in eastern Nevada and western Utah, and include the Drum, Griffon, Antelope, Sandy, Easter, Brik, Stateline, Viper, and Anchor gold properties.
Pilot Gold will continue to focus its own exploration efforts on its 100%-controlled Goldstrike oxide gold project in southwestern Utah, the 79%-controlled Kinsley oxide and high grade sulphide gold project in Nevada, the newly acquired 100%-owned Mineral Gulch oxide gold project in southern Idaho and the 100%-owned Baxter Springs low sulphidation epithermal gold-silver project in Nevada.
Prior to the closing of the transaction (the 'Closing Date'), Logan will complete a non-brokered private placement (the 'Logan Financing') in order to fund the initial exploration, holding and development costs as outlined below. Once the Logan Financing is closed, Logan will issue 9.9% of the issued and outstanding shares of Logan to Pilot Gold. Pilot Gold maintains its right of ownership interest in Logan provided it owns 5% or more of Logan. Logan will also reimburse Pilot Gold for 100% of the 2016 annual holding costs paid by Pilot Gold to date for the Properties.
Terms of the Option Agreement are as follows:
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Logan may earn an initial 51% interest in 4 of the 9 Properties by:
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Incurring US$1,000,000 in cumulative exploration, holding and development costs within 12 months of the Closing Date.
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Returning 5 of the 9 Properties to Pilot Gold within 12 months of the Closing Date, with 100% of the 2017 holding costs paid.
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Maintaining the Properties in good standing, including making all lease payments, advanced royalty payments and satisfying any minimum expenditure requirements on the Properties.
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Logan may earn an additional 19% (total of 70%) interest in the 4 selected Properties by incurring an additional US$2,000,000 in exploration expenditures within 36 months of the Closing Date and issuing an additional 1,000,000 shares to Pilot Gold on completion of the 70% earn-in requirement.
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Logan may earn an additional 10% (total of 80%) interest in any of the selected Properties by completing a prefeasibility study on that Property, prepared in accordance with National Instrument 43-101.
Pilot Gold is pleased to be partnering with Logan in advancing this portfolio of gold exploration projects in the Great Basin, Nevada and Utah and will provide land status support to Logan, as well as assist in building the field exploration group.
Closing of the Option Agreement is subject to regulatory and other customary approvals, including the TSX Venture Exchange.
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.
For more information, visit www.pilotgold.com or contact:
Evelyn Cox, Director Corporate Communications
Phone: 604-632-4677 or Toll Free 1-877-632-4677
[email protected]