True Gold construction Karma

True Gold staff with COO David Laing and CEO Christian Milau at the Karma mine site. (Image: True Gold Mining)

A couple news releases out this morning from two of the companies in Mark O'Dea's Oxygen Capital Corp. - True Gold Mining and Pilot Gold.

True Gold Mining - (TGM:TSXV) -  True Gold has begun initial mining at the Goulagou II (GGII) deposit at the Karma gold mine in Burkina Faso. TGM remains on schedule for first gold pour at the end of the first quarter of 2016.

Goulagou II is expected to produce 273,000 ounces at 1.12 g/t over the first two years of the mine life. Following mining at Goulagou II an additional 5 deposits are planned to be mined for a total mine life of 11.5 years.

A full update of all construction activities was also provided in the news release with everything on track or ahead of schedule.

"As we transition into gold production over the next few months, our team is increasingly focused on operational readiness," stated Christian Milau, President & CEO of True Gold. "Karma will produce approximately 120,000 ounces of gold per year during our first five years at the lowest quartile of cash costs, laying the foundation for True Gold to become a mid-tier producer(1)."

TGM 1 year chart

TGM shares are up about 8% to 20.5 cents on the news, but traded at around 30 cents this time last year. Investors continue to worry about the political risk of Burkina Faso.

Elections are scheduled for Nov. 29 in Burkina Faso after being pushed back from the original date of Oct. 11.

True Gold is fully funded to production with ~$19 million in cash on hand and $28 million from the FNV/SSL stream, with an option on an additional $20 million.

If this project was located in say Canada, you would likely see a much higher valuation. Keep an eye on the upcoming election -  if things settle down in Burkina, TGM stock is likely to be re-rated by the market.

Read: True Gold begins mining at Karma

Related: New True Gold CEO has relevant experience

Pilot Gold - (PLG:TSX) - Pilot is out with 21 drill hole assays from the TV Tower project in Turkey with JV partner Teck (40%). The TV Tower project covers 92 square kilometres and drilling was focused on the recently identified Valley and Hilltop copper-gold porphyry systems.

Drilling has more than doubled the size of the Hilltop system which is now ~600m by 500m.

Highlights from drilling include:

  • 68.5 metres grading 0.24 g/t Au and 0.47% Cu (1.04 g/t AuEq1) in KRD058;
    • including 20.2 metres of 0.23 g/t Au and 1.23% Cu (2.34 g/t AuEq), and 51 metres of 0.23 g/t Au and 0.15% Cu (0.49 g/t AuEq), including 20.3 metres of 0.37 g/t Au and 0.24% Cu (0.78 g/t AuEq).
  • 154.9 metres, starting from 2.1 metres, of 0.14 g/t Au and 0.22% Cu (0.53 g/t AuEq) in KRD046;
    • including 22.4 metres of 0.12 g/t Au and 0.70% Cu (1.32 g/t AuEq), and 98.8 metres of 0.20 g/t Au and 0.17% Cu (0.49 g/t AuEq).
  • 125.5 metres from surface of 0.28 g/t Au and 0.20% Cu (0.62 g/t gold equivalent (AuEq) in KRD042;
    • including 17.5 metres of 0.49 g/t Au and 0.49% Cu (1.34 g/t AuEq).
  • 137.9 metres, starting from 2.0 metres, of 0.26 g/t Au and 0.17% Cu (0.54 g/t AuEq) in KRD048;
    • including 95.2 metres grading 0.29 g/t Au and 0.19% Cu (0.63 g/t AuEq).

1 “Gold Equivalency” (AuEq) reported using $1200/oz Au and $3.00/lb Cu and 100% recovery.

"The results from the supergene copper zone at Hilltop add a significant, high-grade element to TV Tower's porphyry systems," commented Matt Lennox-King, Pilot Gold's President & CEO. "These results continue to show the Hilltop and Valley porphyries as potential satellites to our 40% owned Halilaga copper-gold project, 15 kilometres to the east, with the potential to grow into a stand-alone project."

PLG 1 year chart

PLG stock is down significantly in 2015. Shares have suffered as drill results at the Kinsley Mountain project in Nevada did not meet market expectations. The stock is flat today so far on low volume, as investors are not overly impressed with the grades released.

PLG is followed by several members in CEO live .

Here is one comment from a chat regular on today's news:

@dirkdiggler #PLG: "obviously a large system there at TV Tower. But the grades don't compare nearly as well with, for example, the discovery hole at the 'Valley' porphyry which in 2014 hit 0.99 grams/tonne (g/t) gold (Au) and 0.39% copper (Cu), or 1.65 g/t gold-equivalent (AuEq1), over 153.1 metres. Just sayin......"

As of Aug. 31, working capital was $13.5 million, down from $20 million at the beginning of the year.

Read: Pilot Gold doubles mineralized footprint at TV Tower

Related: How Pilot Gold CEO Matt Lennox-King Manages Risk

Thanks for reading.

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This is not investment advice. All facts are to be checked and verified by reader. As always please do your own due diligence.