VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 01/10/13 -- Pilot Gold Inc. (TSX: PLG) ("Pilot Gold" or the "Company") has signed and closed a definitive purchase agreement (the "Agreement") to sell 100% of its Regent exploration property ("Regent", or the "Property") to Rawhide Mining LLC ("RMC") for $3 million in cash.
Pilot Gold will retain a net profits royalty of 15% on the Property and is entitled to a sliding scale gold equivalent bonus payment (the "Gold Bonus"), each of which is payable in certain circumstances after RMC has achieved production at the Property.
"Regent's divestiture allows the Company to add to its strong cash position while the royalty potentially offers exposure to production for Pilot Gold, as RMC intends to integrate Regent into its existing mining operations," said Matt Lennox-King, President and CEO, Pilot Gold.
Transaction highlights: -- Non-refundable payments to Pilot Gold of $2 million received at closing and $1 million payable six months following closing -- 15% royalty on net profits from Regent after RMC recovers its upfront cash payments to Pilot Gold and its development costs to take Regent to production -- A Gold Bonus for any gold-equivalent ounces from Regent placed on the RMC leach pad in excess of 115,000 ounces based on: ---------------------------------------------------------------------------- Gold price/oz Gold Bonus price/oz ---------------------------------------------------------------------------- $1,800 or more $29.050 $1,700 to $1,800 $23.275 $1,600 to $1,700 $17.500 $1,500 to $1,600 $11.550 $1,400 to $1,500 $ 5.775 Less than $1,400 $ 0.000 ----------------------------------------------------------------------------
The Regent property is located in Mineral County, Nevada, along the eastern margin of the prolific Walker Lane epithermal gold-silver belt. It includes 283 claims totaling 1,795 hectares (4,436 acres) and is an epithermal gold and silver system with oxide gold outcropping at surface, and extensive subsurface gold mineralization outlined in several areas by over 600 drill holes. Regent is 2.5 kilometers northwest of the RMC-operated Denton-Rawhide Mine. The Denton-Rawhide Mine began operations in 1990. Gold and silver production is ongoing, as RMC has expanded the heap leach pads and is currently expanding operations.
RMC plans to continue exploration and engineering studies at Regent in an effort to define a mineral resource that could be permitted, developed and processed at the adjacent Denton-Rawhide Mine. Pilot Gold may receive revenue through its profit participation - and potentially Gold Bonus payments - if Regent advances to production.
ABOUT RAWHIDE MINING LLC
Rawhide Mining LLC operates the historic Denton-Rawhide Mine, located 2.5 kilometres southeast of Regent. The mine began operations in 1990, producing 1.56 million ounces of gold and 11.5 million ounces of silver by traditional open pit-heap leach methods through 2010. Gold and silver production is ongoing as Rawhide Mining LLC has been expanding the heap leach pads and mining the historical open pit.
ABOUT PILOT GOLD
Pilot Gold is a well-funded 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 interests in the TV Tower and Halilaga projects in Turkey, and the Kinsley Mountain project in Nevada, each of which has the ability to become a foundational asset. We also have a pipeline of 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.
All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to Pilot Gold Inc. ("Pilot Gold") within the meaning of applicable securities laws, including statements that address the potential receipt of revenue in the future from the royalty or the Gold Bonus. 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, the timing and ability of RMC to define a mineral resource and bring the property to production, currency exchange rates and interest rates, favourable operating conditions, political stability, RMC 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, and anticipated costs and expenditures by RMC at the Property. 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, statements that address resource potential, potential quantity and/or grade of minerals, potential size of a mineralized zone, potential expansion of mineralization, the timing and results of future resource estimates by RMC, RMC's ability to put Regent into production and the estimation of mineral reserves and resources 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 of results at the Regent property; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; current and proposed exploration and development; the costs and timing of the development of the Regent property by RMC; 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; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration by RMC as well as those factors discussed in the (final) short form prospectus of the Company dated October 25, 2012, 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. Accordingly, readers should not place undue reliance on forward-looking information. Further details relating to Pilot Gold are also available in our Annual Information Form, available under Pilot Gold's SEDAR profile at www.sedar.com.