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Pilot Gold Reports Year-End Financial Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 03/17/14 -- Pilot Gold Inc. (TSX:PLG) ("Pilot Gold" or the "Company") is pleased to announce its financial results and company highlights for the year ended December 31, 2013 and provides an update on company activities at our key projects in the United States and Turkey.

"Pilot Gold finished 2013 in a very strong position" stated Matt Lennox-King, Pilot Gold President & CEO. "We have continued to grow with significant discoveries at Kinsley and TV Tower. We have the structure and financial strength to advance our projects in Nevada and Turkey, and maintain flexibility to pursue other value opportunities that may arise."

Financial and operational highlights through and subsequent to year end:

--  Entered into an agreement with a syndicate of underwriters for the
    issuance of 13,072,000 common shares of the Company, on a bought deal
    basis, at a price of C$1.53 per Share for gross proceeds of C$20,000,160
    (the "Offering"). 
--  Welcomed Mr. Ken Engquist as VP Project Development and Engineering to
    the Pilot Gold team. Mr. Engquist will be responsible for managing the
    transition of the Company's project interests from advanced exploration
    through resource definition, economic analyses, and development.  
--  Sold several portfolio property interests, reducing the cost of
    maintaining our portfolio while retaining an interest in the properties
    through net smelter return royalty interests or equity in the
    purchasers. 
--  Cash and short-term investments at December 31, 2013, totalled
    approximately $19 million. 

Exploration highlights and significant events through and subsequent to year end:

Kinsley Mountain

Kinsley is a Carlin-style, sedimentary-rock hosted gold system and past-producer located along the Long Canyon Trend in North Eastern Nevada. Pilot Gold increased its interest in Kinsley to approximately 79% during the year as a result of having sole-funded activity on the project, including allowable 2013 budget overruns.

Through December 31, 2013 the Company completed a 14,200 metre 2013 drill program and incurred approximately $3.85 million in expenditures at Kinsley (year ended December 31, 2012: $3.67 million). Results at Kinsley to date confirm the presence of multiple stratigraphic horizons hosting mineralization in NNE-SSW and possible NW-SE orientations along the property's Western Flank zone, including the discovery of high grade gold in the Secret Canyon Shale, a new stratigraphic host horizon beneath the previously exploited Candland Shale. The Candland Share is the main host for mineralization at the historical Kinsley Mine.

Exploration highlights:

--  Drilled a new high grade gold discovery at Kinsley's Western Flank
    target, within a new host horizon including: 
    --  10.5 g/t Au over 42.7 metres in PK131C, including, 18.3 g/t Au over
        22.9 m; 
    --  7.53 g/t Au over 53.3 m in PK132C, including, 14.9 g/t Au over 22.9
        m, and, 4.67 g/t Au over 7.6 m; 
    --  6.85 g/t Au over 41.7 m in PK127C, including,16.3 g/t Au over 8.5 m,
        and, 20.5 g/t Au over 3.6 m 
    --  8.53 g/t Au over 36.6 metres in PK091CA, including, 29.43 g/t Au
        over 7.6 metres 
--  Received approval for a Plan of Operations allowing up to 70 acres of
    disturbance for exploration and development drilling on the core group
    of claims. The Company submitted an amendment to the Plan of Operations
    in November 2013, which if approved, will allow 20 acres of additional
    exploration drilling in the property's northern claims. 

A subsidiary of Nevada Sunrise Gold Corporation holds the remaining 20.9% interest in the property. The 2014 program and budget currently approved for Kinsley is $4.5 million, and includes a 17,000 metre drill program. The Company and its partner are each obligated to fund their pro rata share. The initial phase of the 2014 drill program was completed on March 9, 2014. Drilling is expected to resume in May 2014.

TV Tower

TV Tower is an extensive epithermal gold-silver and porphyry copper-gold property located in the Biga district of northwestern Turkey. Pilot Gold currently holds a 40% interest in TV Tower, and became project operator in June 2012 with an option to increase the Company's interest in TV Tower to 60%. The Company has completed the second year minimum committed expenditure amount and has begun the final expenditure to complete the option to earn-in. "TMST", a subsidiary of Teck Resources Limited is the Company's 60% joint venture partner at TV Tower.

During the year ended December 31, 2013, Pilot Gold incurred approximately $10.2 million in exploration expenditures at TV Tower including the value of consideration paid to acquire Karaayi (year ended December 31, 2012: $4.77 million). In 2013 we drilled 16,781 metres in 73 holes at the KCD target, 3,586 metres in 17 holes at Kayali and 1,329 metres in 5 holes at Karaayi. Cash expenditures at TV Tower (not including consideration and costs to acquire Karaayi) exceeded the 2013 budget of $7.92 million by approximately $0.88 million due to higher than anticipated drill costs as we drilled a higher proportion of diamond drill holes than originally planned and extended the 2013 program to include drill targets at Karaayi.

Exploration highlights:

--  Reported an independent resource estimate for the KCD gold-silver-copper
    deposit at TV Tower. 
--  Acquired beneficial interest in the Karaayi property, consolidating
    ownership of the K2 trend (Kayali and Karaayi), a strategic exploration
    target in the southern portion of TV Tower and creating the dominant
    position in Turkey's Biga peninsula.  
--  Demonstrated the potential for shallow oxide gold mineralization over a
    strike length of 4 kilometres. Significant drill results from the Kayali
    zone include: 15.9 g/t Au over 3 m, within an interval grading 1.35 g/t
    Au over 45 m, in KYD-46. Karaayi highlights include 2.00 g/t Au over
    35.0 m in KRD-03 
--  Announced that drill results from the K2 trend reveal the presence of an
    extensive blanket of supergene copper mineralization underlying the
    oxide gold zones at the Karaayi and Kayali targets. Drilling and surface
    work also identified two or more copper-gold porphyry targets at
    Karaayi. 
    --  Supergene copper drill highlights from K2 include:  
        --  1.29% copper (Cu) over 34.1 m in KYD-39, including 1.90% Cu over
            20.8 m 
    --  Karaayi Cu-Au porphyry target highlights include: 
        --  0.30% Cu and 0.13 g/t Au over 224.8 m in KRD002 
--  Five of the exploration licenses that comprise TV Tower were upgraded to
    "operations" status further to the receipt of approvals from the Turkish
    mining authority in January 2014. 

The 2014 drill program, focused initially on the supergene copper zone and the two porphyry Cu-Au targets identified to date at K2 is expected to begin in April 2014. Follow-up of initial metallurgical results at KCD is also planned. Drill permits for the Sarp and Columbaz targets have recently been received and there are valid permits in place allowing for additional drilling at KCD, Karaayi and Kayali.

Including consideration paid to acquire Karaayi, and net of a VAT receivable, the Company has approximately $5.5 million remaining to complete the final earn-in expenditure requirement.

Halilaga:

The Company holds a 40% interest in Halilaga, a PEA-stage copper-gold porphyry project located 20 kilometres southeast of TV Tower. Based on recommendations of the authors of a preliminary economic assessment completed for Halilaga in 2012 (the "Halilaga PEA"), Pilot Gold initiated a number of strategic studies in conjunction with TMST, the Company's 60% partner and operator at Halilaga. Strategic studies underway include economic, metallurgical, environmental and engineering analyses to advance the concept and potential of this porphyry project.

Pilot Gold's share of budgeted expenditures for 2013 was $0.23 million (2012: $1.95 million.) The Corporation's share of actual expenditures through the end of 2013 was $0.28 million (2012: $1.63 million).

There are several valid forestry permits in place at Halilaga, allowing further infill and exploration drilling on the property. Each of the exploration licenses at Halilaga were upgraded to "operations" status further to the receipt of approvals from the Turkish mining authority in November 2013.

The Corporation expects to continue discussions with Teck on strategic next steps for the project. Pilot Gold's share of the budget currently proposed for 2014 is approximately $0.19 million.

SELECTED FINANCIAL DATA

The following selected financial data is derived from our consolidated financial statements for the years ended December 31, 2013, 2012 and 2011, as prepared in accordance with International Financial Reporting Standards. All dollar figures are expressed in USD unless otherwise stated.

                                                                            
----------------------------------------------------------------------------
                                     Twelve months ended December 31        
                                        2013            2012            2011
----------------------------------------------------------------------------
Loss for the period          $     9,142,314 $     8,019,202 $    11,840,930
Loss and comprehensive loss                                                 
 for the year                $    12,516,033 $     7,393,038 $    13,420,480
Basic and diluted loss per                                                  
 share                       $          0.10 $          0.12 $          0.21
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
                                                      As at                 
                                          December 31,          December 31,
                                                  2013                  2012
----------------------------------------------------------------------------
Cash and short-term investments       $     19,005,690      $     37,380,364
Working capital                       $     18,470,511      $     40,394,752
Total assets                          $     71,374,312      $     72,388,880
Current liabilities                   $      1,708,714      $      1,288,365
Non-current liabilities               $         68,126      $         42,592
Shareholders' equity                  $     67,174,395      $     71,057,923
----------------------------------------------------------------------------

For the year ended December 31, 2013, we reported a net loss of $9.14 million compared to a net loss of $8.02 million and $11.84 million for the years ended December 31, 2012 and 2011, respectively. The most significant contributors to the loss for the year ended December 31, 2013 were non-cash stock-based compensation of $2.28 million (2012: $1.72 million; 2011: $5.9 million), the cost of wages and benefits of $1.73 million (2012: $2.13 million; 2011: $1.20 million), a write down of the deferred exploration expenses relating to the New Boston property of $1.28 million, a decline in the fair value of financial instruments of $1.58 million in 2013, and office and general expenses of $1.28 million (2012: $1.34 million; 2011: $1.24 million).

Expenses for the years ended December 31, 2013 and 2012 were offset by finance income of $0.36 million (2012: $0.19 million; 2011: $0.23 million), and in 2012, the reversal of a previous impairment of the VAT receivable in Turkey ($0.31 million). The loss per share for the year ended December 31, 2013 was $0.10 (2012: $0.12; 2011: $0.21).

Total assets decreased slightly to $71.37 million (2012: $72.39 million; 2011: $37.49 million). During the year ended December 31, 2013, $15.70 million was capitalised to TV Tower (including direct expenditures, consideration paid for the acquisition of Karaayi, a portion of which was paid with Pilot Gold common shares, the value of common shares issued in connection with the earn-in, and the impact of foreign exchange), and $6.27 million was capitalised to Kinsley, including a $2.4 million increase as a consequence of accounting for a non-controlling interest. The increase to total assets was offset by $1.37 million in impairments recorded on certain of the Company's portfolio property interests.

Liabilities at December 31, 2013 and 2012 reflect primarily accounts payable and accruals recorded at year end arising from ongoing activities.

The Company's cash balance decreased by $20.42 million over the course of the year, including $3.45 million in outflows for operating expenditures, $15.40 million for investing expenditures and the impact of changing foreign exchange rates ($1.56 million).

Moira Smith, Ph.D., P.Geo., Chief Geologist, Pilot Gold, is the Company's designated Qualified Person for this news release within the meaning of National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101") and has reviewed and validated that the scientific and technical information contained in this release is accurate.

TV Tower and Kinsley are both early stage exploration projects and, except for the mineral resources at the KCD deposit at TV Tower, neither contain any mineral resource estimates as defined by NI 43-101. The potential to define a mineral resource at the copper-gold K2 zone of TV Tower, and on the Western Flank zone at Kinsley are conceptual in nature and there has been insufficient exploration to define a mineral resource thereat. It is uncertain if further exploration at either TV Tower or Kinsley will yield any mineral resources at Kinsley or additional resources at TV Tower.

Although there has been no economic analysis summarized in this press release relating to the Halilaga PEA, readers are cautioned that the Halilaga PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the Halilaga PEA will be realized. Furthermore, there has been an insufficient amount of analysis undertaken to reach any conclusions for optimization of Halilaga, and there is no certainty that the strategic studies currently underway could be implemented. Any strategic plan for Halilaga will be subject to the results of further study by the Company and its joint venture partner.

This press release should be read in conjunction with Pilot Gold's audited consolidated financial statements and Management's Discussion and Analysis for the year ended December 31, 2013. These documents can be found on the Company's website (www.pilotgold.com) or under the Company's profile on SEDAR at www.sedar.com. Shareholders may receive a printed copy of the audited consolidated financial statements, free of charge, upon request. All amounts are presented in United States dollars unless otherwise stated. Pilot Gold will be hosting its annual general meeting on May 12, 2014, in Vancouver, British Columbia.

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 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.

Unless stated otherwise, information of a scientific or technical nature in this press release regarding the TV Tower, Halilaga or Kinsley Mountain properties are summarized, derived or extracted from, the following technical reports: "Independent Technical Report for the TV Tower Exploration Property, Canakkale, Western Turkey", effective January 21, 2014 and dated February 20, 2014, prepared by Casey M. Hetman, P.Geo. with SRK Consulting (Canada) Inc., James N. Gray, P. Geo. of Advantage Geoservices Ltd., and Gary Simmons, BSc, Metallurgical Engineering, of G L Simmons Consulting, LLC; "Preliminary Economic Assessment Technical Report for the Halilaga Project, Turkey", effective August 27, 2012 and dated October 10, 2012 prepared by Gordon Doerksen, P.Eng., James Gray, P.Geo., Garth Kirkham, P.Geo., Dino Pilotto, P.Eng., Maritz Rykaart, P.Eng, and Kevin Scott, P.Eng.; and "Technical Report on the Kinsley Project, Elko County, Nevada, U.S.A." effective February 15, 2012 and dated March 26, 2012 prepared by Michael Gustin, CPG and Moira Smith, Ph.D., P.Geo. For further detail on TV Tower, Kinsley Mountain or the Halilaga PEA, refer to the respective technical reports filed on the Company's website at www.pilotgold.com or under Pilot Gold's SEDAR profile at www.sedar.com.

All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to Pilot Gold within the meaning of applicable securities laws, including statements with respect to the anticipated timing and closing of the Offering, anticipated use of proceeds of the Offering, those that address potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans. 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, currency exchange rates and interest rates, favourable operating conditions, political stability, 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, availability of equipment, accuracy of any mineral resources, successful resolution of disputes and anticipated costs and expenditures. 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, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to the interpretation of results at the Kinsley property, reliance on technical information provided by our joint venture partner or other third parties as related to Kinsley; successfully completing the earn-in on the TV Tower project, including the ability to incur the minimum annual Expenditure Requirements; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; the costs and timing of the development of new 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; satisfaction of Turkish requirements relating to the periodic submissions of Environmental Impact Assessments; possible claims against the Company or its joint venture partners; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration as well as those factors discussed in the Annual Information Form of the Company dated March 14, 2014 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 unless required by law.

Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources

Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. There is also no certainty that these inferred mineral resources will be converted to measured and indicated categories through further drilling, or into mineral reserves, once economic considerations are applied. The mineral resource estimates referenced in this press release use the terms "Indicated Mineral Resources" and "Inferred Mineral Resources". While these terms are defined in and required by Canadian regulations (under NI 43-101), these terms are not recognized by the U.S. Securities and Exchange Commission ("SEC"). "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. The SEC normally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant "reserves" as in-place tonnage and grade without reference to unit measures. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. Pilot Gold is not an SEC registered company.

Contacts:
Pilot Gold Inc.
Patrick Reid, VP Corporate Affairs
Phone: 604-632-4677 or Toll Free 1-877-632-4677
[email protected]
www.pilotgold.com

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