We are happy to report more high grade results at Sertão's Crew’s reef on the northern edge of the old Stage 5 open pit. The two holes returned 3m @ 16.9 g/t Au (SRSD0041) and 2.5m @ 25.4 g/t Au (SRSD0042). We plan on dewatering the pit in September to allow continued drilling at the base, but for now Paulo and the team have moved the drill rig 200 metres to the west to test the Crew’s reef extension at SRD0034.  In the middle of these two fences is SRD0019 which intersected 2.5m @ 36.3 g/t in December 2021. Last night Paulo rang me and said hole 34 intercepted very similar sulphidation in the graphite schist like holes 41 and 42. We will need to wait for this result but it is certainly encouraging and suggests that Crew’s reef is likely to become an excellent and reliable source of high grade ore for Pilar. 

The table below shows a selection of 14 of the 25 holes that Paulo and the team have drilled so far. In baseball terms, the boys are hitting a home run every second bat with a .560 batting average. Drill results from another three drill holes are expected by mid-June.

We believe that Crew’s reef is not the same reef as Stage 5 that Troy mined with incredible success in 2006. Stage 5 was accidently discovered by Troy in 2005 underneath the dry stack tailings from Stages 1-4. Grade control drilling by Troy at the time returned a spectacular hole right at the bottom of the Stage 5 pit of 1m @ 358 g/t Au. Our plan is to drill at the western edge of the Stage 5 pit some 60 metres from this high grade intersection. Stage 5 could be a third source of ore if the drilling is successful. 

So far we understand that Crew's reef is thicker than Nilsson's reef but it's also lower grade at around 5-40 g/t Au compared to Nilsson’s reef grades of between 20-200 g/t Au. The best historical hole drilled on the Nilsson's reef by WMC in the late 80's, was much thicker at 6.1m @ 523 g/t Au from surface. We suspect that might be one of the better holes drilled by the industry in recent times. The thickness is a function of the folding of the package when it was formed billions of years ago.

Our plan is to mine Crew's and Nilsson’s reef at the same time to deliver 300 tonnes per day of 16-20 g/t Au ore to our Pilar mill. Blending Sertão's super high-grade ore will be just the tonic to double our daily ounces to 260 with just 7-10 truckloads delivered each day.  As a team we strongly believe we have a young Ronaldinho or Messi in the squad waiting for his first game. When allowed on the pitch, Sertão could result in a doubling of current gold production to ~100,000 ounces per annum and potentially reduce our AISC to under $1,000 per ounce.

Below is a link to the first video on Sertão by OldGold as a reminder to why we're so excited about getting it restarted.

Historically, we know Sertão was a big goal scorer when it played 3 seasons for Troy Resources producing 260,000 ounces at an incredible average grade of 29 g/t Au. With access to Pilar’s infrastructure, we look to fast track Sertão back into production later this year and add new chapters to its amazing story. 

Last week we had the pleasure of meeting Sertão's former head geo, Chris Grainger, at the 121 Mining conference in London. Chris worked at Sertão for Troy and shared a lot of interesting stories about this incredible orebody. Chris was part of the Antilles Gold (ASX:AAU) team at the conference where he is Technical Advisor on some really exciting copper and gold ground in Cuba.    The link above to Oldgold's first video of Sertão shows a lot of the old footage from when Chris was working there in 2003. 

The presentation link below will give you a better visual idea of the current campaign. We believe we are barely scratching the surface. In Paulo's presentation you will see an initial 12 month plan to extract 2 x 33,000 ounces from both Crew's and Nilsson’s reef (excluding any upside from a potential Stage 5 extension). This would be a great start as we focus on increasing free cash flow and lowering AISC at PGDM initially, but we expect to be drilling and producing for several years as we grow the resource extensively and Sertão enjoys its much-deserved resurgence.

Based on the last funding round of 70 Canadian cents, Pilar Gold is valued at only US$126 million with over US$400 million of existing infrastructure that we have acquired over the last 12 months plus the potential for Sertão to become the highest grading gold mine in the industry next year – an accolade it held for 3 years in the early 2000’s. 

We will continue to keep you updated on Sertão and thanks again for your support.

Regards,

Jeremy Gray | CEO
jeremy.gray@pilargold.com 

Charles Chebry | President
charles.chebry@pilargold.com

Edward Balme | Head of Investor Relations
edward.balme@pilargold.com

• 05/09/2022 - New Video of Pilar Gold’s 7 Mines and 4 Mills
• 05/01/2022 - Pilar Gold Orders MRS Dry Stack Tailings System
• 04/10/2022 - Tungsten's Looming Price Spike
• 03/17/2022 - Pilar Gold Bonanza Discovery Webinar
• 03/08/2022 - Pilar Gold closing 70 cent round this Friday
• 03/05/2022 - China + Russia = 87% of Global Tungsten Supply
• 02/17/2022 - Pilar Gold’s MLSE Drilling Update
• 02/13/2022 - Pilar Gold Signs Offtake with Trafigura Pte Ltd
• 01/27/2022 - Tungsten Price Update
• 01/25/2022 - Launch of Pilar Gold Website
• 01/21/2022 - Sertão Drilling Resumes Today
• 01/17/2022 - Pilar Gold Inc Completes the Acquisition of Bodó Mineração in Brazil
• 12/27/2021 - New Video on Pilar Gold's Sertão Drilling
• 12/17/2021 - Pilar Gold Hits 2.5m @ 33.8 g/t at Sertão
• 12/15/2021 - Drilling Starts at Maria Lázara South East
• 12/07/2021 - Pilar Gold - Bonanza Grade Drill Results at Sertão
• 11/26/2021 - Pilar Gold Update and Private Placement