High-Grade Gold Resource Estimate At Kinsley Project

VANCOUVER, BC - Pilot Gold Inc. reported the first independent resource estimate for its Kinsley Property in Nevada. The resource estimate defines a significant high-grade zone at the Western Flank along with near-surface oxide ounces. Gold mineralization at Kinsley is sedimentary rock-hosted, similar to that mined in Nevada's prolific Carlin and Cortez trends. The potential for resource expansion is excellent due to widespread alteration, prospective geology and gold at surface, and over 80% of the property is untested by drilling.

Matt Lennox-King, President and CEO stated, "With a large number of untested targets with attributes similar to the Western Flank Zone, we believe that this resource represents a stepping stone along the way to defining a much larger gold endowment at Kinsley. From north to south, we have over 12 km of prospective geology, alteration and geochemical targets to explore. We are confident that the Western Flank is one of many high-grade zones of its type at Kinsley and we are aggressively pursuing the next one."

Mineralization hosted in the Secret Canyon Shale in the Western Flank zone includes 284,000 Indicated ounces at an average grade of 6.04 g/t gold. At a 3 g/t cut-off grade, most of the resource remains, delineating 248,000 Indicated ounces at an average grade of 9.15 g/t gold (see Sensitivity Table below). The grade improves 51%, while the gold content is only reduced by 13%. Metallurgical testing of mineralized material from this zone suggests that it is amenable to production of a flotation concentrate with grades up to 312 g/t gold and recovery of up to 95%. The outstanding metallurgical response indicated by testing to date allows for consideration of a potentially low cost development scenario that may minimize financial and permitting challenges of typical refractory ore bodies in Nevada. This in turn allows for lower cut-off grades than might ordinarily be used in modeling Carlin-type sulphide material.

The resource estimate, effective October 15, 2015, includes three separate cut-off grades, reflecting depth from surface, oxidation, and metallurgical considerations. These include shallow oxidized rock (0.2 g/t Au cut-off); shallow transitional and sulphide mineralization, primarily hosted in the Dunderberg Shale (1.3 g/t Au cut-off), and Secret Canyon Shale-hosted sulphide and transitional mineralization (1.0 g/t Au cut-off). Cut-off grades assume an open-pit mining scenario, using a pit floor elevation generated using Whittle software, reasonable assumptions for mining and milling costs, and a US$1,300/oz gold price.

The resource estimate was completed by Michael Gustin, Ph.D, CPG, of Mine Development Associates, Inc. (MDA) of Reno, Nevada, an Independent Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended.