There are just a handful of people in the world who have found gold deposits hidden underground profitably. Those that do, often make multiple discoveries. One such goldfinder now entering the sweet spot of his career is Matt Lennox King, 38, CEO of Pilot Gold (TSX: PLG) (www.PilotGold.com), one of the most dynamic mineral exploration companies traded on the Toronto Stock Exchange (TSX), with projects in Nevada and Turkey.
A second generation miner, Mr. Lennox King earned his stripes with Fronteer Gold as their Senior Geologist, spending thousands of hours in the field overseeing the discovery and delineation of the Long Canyon deposit in Nevada. Fronteer Gold was subsequently sold for $2.3 billion dollars to Newmont Mining in 2011, providing early investors with returns of over 1000%. By all accounts, Mr. Lennox King was integral to the advancement of the projects at Fronteer and has brought the same methodology, passion, and team to Pilot Gold.
On Sunday, January 18, 2015 at the Vancouver Resource Investment Conference, Brent Cook, veteran exploration geologist, described Pilot Gold as having “One of the best technical teams in the gold exploration industry”.
We had the opportunity to catch up with Mr. Lennox King at the conference, and to discuss the Carlin-Type Kinsley Project in Eastern Nevada which recently intercepted 10.1 Au g/t over 39M at the Western Flank target.
Thank you for taking the time Mr. Lennox King. How does the Kinsley project meet your four key traits: Grade, Jurisdiction, Size, and Infrastructure?
In terms of grade, when we were first exploring at Kinsley we were looking at reasonably high grade 0.5-1 gpt Au surface samples. Our work over the last year has resulted in the discovery of the zone known as the Western Flank. It is large, high grade, and growing, which we will further test to the North and South through step out drilling this year. Most drill intercepts are 10 grams per tonne over 40 metres, which are big thick intervals of strong grade.
In regards to jurisdiction, the vast majority of the gold production in the United States comes from Nevada. If Nevada were an independent country it would be the 4th largest gold producing nation. Simply put, this is one of the best jurisdictions in the world to explore for gold.
The property itself is 12 kilometres long and we have both at surface gold and in drilling gold over the 12 km stretch of the property. It is a very large property with tremendous exploration upside in terms of this gold system.
With mining in a 1st world country, infrastructure is already in place. Our project is only 15 Km from rail and 8 Km from the interstate for transportation purposes and has abundant ground water on the property with water rights in possession. From that point of view, we are incredibly well set up.
Tell me about the newly identified Right Spot target and what exploration plans are in place for 2015?
There are two key components at Kinsley; one is stratigraphy, having the right rocks in the right place. The second is the structural setting - think of it as your plumbing introducing the gold bearing fluid. The targeting model at a high level is very simple; “X” marks the spot. That is where you have cross cutting structures, or plumbing through the rocks, and that’s what gave us our newly defined targets, the Right Spot and the Secret Spot. This is how we will be making new discoveries at the Kinsley project in 2015.
Drilling will take place across the property and outside the Western Flank target. The focus will be on new discoveries at Kinsley, where the northern two thirds of the property will be drilled for the first time. This has potential for significant exploration upside on the Kinsley project. There is multi-gram gold at surface which is ideal for discovering new targets and the same exploration model for “X” marks the spot.
The preliminary exploration budget for the first half of the year is $2M split between our joint venture partner, Nevada Sunrise (21% ownership) and us. And for the latter half of the year the budget will be results dependent. We’ve had a huge rate of success at Kinsley over the last 18 months and we are confident that will continue.
How do you plan to create value for your shareholders in 2015?
Our job is not to save money. Investors have taken a position in Pilot for us to go out and create value and to do that we must constantly de-risk our projects through new discoveries, metallurgy, engineering, permitting, and advancing the projects up the curve. We believe any one of our projects, Kinsley, TV Tower, and Halilaga, have the “company making” ability to generate real value to shareholders in the short term, even in a relatively suppressed market as we are in right now.
What are the risks that face Pilot Gold and how will you mitigate those?
The potential risks that face Pilot Gold are geologic risk, financing, and permitting. These are all common themes for early stage exploration projects. You mitigate geologic risk by being as rigorous as possible, using all the available exploration and geology tools. Financing risk is mitigated by managing our treasury appropriately and only spending those dollars that are going to add value and de-risk a project. Thirdly, regarding permitting, you do what you say you are going to do. Act as a transparent company, fulfill promises to stakeholders, meet your milestones, go above and beyond, and perform all of your responsibilities to the highest possible standard.
Do you anticipate going to the market for a financing in 2015?
As of September 30, 2014 we had just over USD $24 million in working capital comprised of cash, short term investments, and receivables. One thing I can confidently say is that when our company has required capital we have always been able to raise it, keeping our company well positioned. Once well capitalized, you can make the best long-term decisions to generate the most value for shareholders, as opposed to being capital constrained.
We have no need to go to the market for further financing this year. If you look at our capital spend this year at Kinsley and TV Tower, we have Nevada Sunrise (our joint venture partner at Kinsley) contributing 21% of capital expenditures and Teck Resources (our partner) funding 40% of the exploration program at TV Tower. This allows us to execute very meaningful exploration programs in this challenging market environment while preserving our treasury.
How does it feel to be the CEO of a project with strong exploration upside in worldclass jurisdictions?
Honestly, it’s a lot of fun. This company is comprised of a group of individuals, initially from Fronteer Gold, that have been together for a long time. I have been working with our Chairman, Mark O’Dea, for 15 years around the globe. It is very rewarding to lead such a bright, talented, driven team of individuals on these projects, which we hope to turn into the next big success story.
For more information, visit www.PilotGold.com, read the company's SEDAR filings and even give them a telephone call (604-632-4677 or Toll Free 1-877-632-4677). This interview is not intended to be investment or professional advice of any kind and may contain errors. Verify all facts contained herein independently and consult a licensed investment advisor to discuss the suitability of any investment. Pacific Website Co., CEO.ca and the author accept no liability for trading losses. Always do your own due diligence.