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MLSE email update from Pilar

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Getting regular email updates now from Pilar Gold management. Nice to get a full picture on what they want to achieve this year on production and exploration. VQA looks ridiculously cheap down here.

Dear Pilar Gold Shareholders and Interested Parties,
 
Drilling at our Maria Lzara South East (MLSE) extension is going well with 2 rigs and a 12 man crew. This programme is in addition to the 5 rigs we have running at Serto and Pilar as we focus on increasing Pilar’s current M,I&I ounces Au from 4.07 million to our target of 8 million by the end of 2023

Mria Lzara Maria (MLZ) is our second producing mine at Pilar's flagship operation PDGM. It was restarted in mid 2020 and is currently producing only 700 ounces out of the ~4,000 ounces we produce each month, but has the potential to increase to 2,000+ ounces with more underground development.

The MLSE drilling is testing the extension 3km south east of the current mine. Four years ago a drill programme by Brio Gold intersected 3.68m @ 8.97 g/t Au from 251 metres depth (MLSE013) at the southern point of the known extension. 

Paulo Aguirre, Carlos Victor and our exploration team, with the help of the Gildeci from the drilling company Sondagem Brasileira, are walking back from this hole and testing the theory that the orebody joins up with the mine 3km up the road. 

The best hole so far is MLSE020 some 120 metres north of hole 13 which shows the team have intercepted 2.3m with quartz-albite veining and arsenopyrite, similar to the mineralized interval from MLSE013. The core is currently with ALS and you can see from the pictures in this presentation below that it looks very interesting.

Pilar Gold - Maria Lazara SE Update - February 2022 (Download)

MLZ has an M&I&I Resource of 373 koz Au and MLSE has an Inferred Resource of 471 koz Au.  If we can show that the mineralisation joins up between MLZ and MLSE then Paulo thinks we could potentially have a 3moz Au resource after an in-depth drill program.

This is the characteristic of our orebodies - they have long mine lives with significant scope for resource upgrades. Our Pilar mine alone has 2.8moz Au of resource next door to MLSE.

We hope to have a report on the start of Serto's second season by early March. The second rig arrived this week and Paulo is going to step out 250 metres from hole SRSD013 which assayed 0.5 metres @ 218 g/t after some more shallow holes test the gap between the Nilsson and Crew’s reef at the side of Stage 5 pit. We really believe Serto will be one of the highest grading gold mines in the industry again when it is restarted later this year and trucked to the Pilar mill. 

Fund raising for our upsized $C5.0 million PP is going well. This is set at 70 cents with a full warrant. To put the valuation in perspective of 231 million fully diluted shares and warrants, post money values Pilar Gold at only US$37 per ounce EV/MI&I which for a producing business is less than a lot of exploration stories. 

Click on the link below to fill in the online share sub doc or if you'd rather a traditional form please let Edward know.  

Private Placement Sub Doc (Online Application)

One interesting observation I have noticed about this recent gold move up is that most of my gold bug friends who I talk to didn’t see this coming and think it’s short term and won’t last. My sense is that 8 years of bear markets in precious metals and the last 18 months of sideways moves has dulled a lot of players into thinking a selloff will always follow a rally. With "Shadow" inflation running at 15.6% in the US according to www.shadowstats.com and likely to get worse, this psychology may soon be forgotten and old investing rules for gold scrapped. 

Regards,

Jeremy Gray | CEO
[e-mail] 
UK: [phone]

Charles Chebry | President
[e-mail]
CA: [phone]

Edward Balme | Head of Investor Relations
[e-mail]
BR: [phone]