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AM Gold Announces Corporate Update
Dear
Shareholders,
I am
writing to update you on the progress of AM Gold Inc. (the �Company� or �AM
Gold�)(TSX-V: AMG; Frankfurt: AMX) over the past
year and to outline for you the Company�s operational initiatives for the
year 2011 and beyond.
Corporate
Update
The
Company has resolved the issues set out in the Cease Trade Order (the �CTO�)
the British Columbia Securities Commission (the �BCSC�) issued against the
Company on April 13, 2011 and I am pleased to report that the BCSC issued an
order on May 13, 2011 which granted full revocation of the CTO. The Company
is now in the process of seeking reinstatement on the TSX Venture Exchange
(the �TSX-V�). The Company is unable at this time to provide a definitive
determination as to when the Company�s shares will resume trading but the
Company will disseminate a further news release when the timing is settled.
Through
the course of this past year, the Board of Directors and Management of AM
Gold have undertaken the process of building a new company focused on
creating shareholder value through the development of the Company�s core
assets at Pinaya, Peru and Red Mountain, Yukon
Territory. To that end, the Board and Management structure of AM Gold have
continued to evolve. Dr. Kelly Hyslop and Mr. John Fiorino have joined the Board of Directors with Mr.
Michael Scholz, Mr. Jack Bal and Mr. Jeff Reeder
departing. Management of the Company has been strengthened through the
appointments of Mr. John Fiorino as Chief Executive
Officer, Mr. Jerry Aberle as President and Chief Operating
Officer, Mr. Mark Lawson as Chief Financial Officer, and Mr. Neil Downey as
Vice President of Exploration.
While
much has been accomplished in just 12 months, we believe AM Gold continues to
present opportunity for growth in the coming year and the years beyond.
Yukon
Update
The
Company�s Red Mountain property is located in central Yukon Territory
approximately 55 kilometers northwest of the community of Mayo in the heart
of the Tintina Gold Belt.
Between
2002 and 2007, a number of exploration programs were conducted by the Company
at Red Mountain, including an airborne magnetic survey, general prospecting
and sampling surveys and four separate drill campaigns. Exploration permits
were secured and by late July 2010 a $1.8 million dollar diamond drill
program was underway. A total of 4,100 meters of diamond drilling was
completed in 12 holes through the course of the program. This resulted in the
publication of an updated inferred resource estimate of 79.3 million tonnes grading 0.52g/t gold, containing approximately
1.32 million gross troy ounces of gold (see the Company�s news release dated
December 2, 2010, available under the Company�s SEDAR profile at www.sedar.com). As disclosed in the Company�s news
release of December 2, 2010 a sensitivity analysis was performed on the
resource estimate at various cut-off grades with the resulting tonnages and
grades summarized in the following table:
|
Red Mountain Property, Yukon
Inferred Mineral Resource
|
|
Cu-Off
Grade
(g/t Au)
|
Volume
(m3)
|
SG
(g/cm3)
|
Tonnes
|
Tenor
(g/t Au)
|
Troy Oz.
Au
|
|
0.1
|
32,153,750
|
2.55
|
81,992,063
|
0.51
|
1,331,233
|
|
0.2
|
31,111,200
|
2.55
|
79,333,560
|
0.52
|
1,318,677
|
|
0.3
|
26,649,600
|
2.55
|
67,956,480
|
0.56
|
1,223,517
|
|
0.4
|
19,638,100
|
2.55
|
50,077,155
|
0.63
|
1,021,878
|
|
|
|
|
|
|
|
|
Dilution below 0.2 within Wire Frame
|
1,108,150
|
2.55
|
2,825,783
|
0.16
|
14,445
|
AM
Gold�s 2010 drill program at Red Mountain extended the inferred resource area
to a distance exceeding 650 meters along strike of the Jethro
Structure, with the strongest mineralization open to extension laterally to
the east, west and at depth.
This
year�s program at Red Mountain is expected to be focused on the inferred
resource area and the testing of other areas of interest on the property,
including the mineralization discovered by Hole ICE10037 (see the Company�s
news release dated November 30, 2010, a copy of which is available under the
Company�s SEDAR profile at www.sedar.com). Preparations are underway for the
program and the Company has contracted with Kluane
Drilling of Whitehorse, Yukon Territory to conduct a 6,000m diamond drill
core program. Through an agreement reached at the conclusion of the 2010
season, two of Kluane Drilling�s KD1000
skid-mounted, all-hydraulic drill rigs were winterized and left on the
property to facilitate an early start for the 2011 campaign. Mobilization of
the camp is planned for late-May with the resumption of drilling operations
anticipated by early-June, depending on weather conditions.
Peru
Update
The Pinaya project is located approximately 775 kilometres southeast of the city of Lima, Peru, in the Tintaya Gold Belt.
Over
the past year, AM Gold invested in re-organization of its wholly-owned
Peruvian subsidiary, Canper Exploraciones
S.A.C., including new management and staff to prepare Pinaya
for the resumption of active exploration on the property. The continuation of
good community relations has been pursued as a high priority through the
implementation of a new socio-impact study and the continued funding of the
Company�s community relations program which provides support for local
schools, healthcare services, and community agricultural organizations.
Community relations have been further improved through renewed employment
opportunities within the Company�s ongoing exploration activities at the
property.
As a result
of this effort, AM Gold has negotiated new two-year surface access agreements
covering virtually the entire property position, which are critical to the
execution of the property-wide work programs planned for this season. In
addition, community support was a vital requirement for the Company�s
application for a new two-year exploration permit for the resumption of
diamond drilling operations at the resource area, which was approved on
January 28, 2011.
An
exploration program has been planned for 2011 at Pinaya
which will focus on resumption of drilling within the resource area as well
as the exploration of porphyry and skarn-related
targets that were identified during a three-week field program undertaken in
December, 2010. A heavy mineral stream sediment sampling program and soils
sampling program are currently underway covering approximately 6,000 hectares
at the southern end of the property.
AM Gold
has also entered into an agreement with Geotech
Ltd. of Aurora, Ontario to conduct a combined Z-tipper Electromagnetic (ZTEM)
and Cesium-magnetometer survey of both the entire Pinaya
property and the Company�s Minas Lucho property
located approximately 70 kilometres to the
southeast of Pinaya. The ZTEM survey is an airborne
passive geophysical system measuring resistivity and conductivity contrast
features of the sub-surface. The survey will appraise the entire 19,200
hectare Pinaya land position testing new
exploration targets while validating the results of ground-based geophysical
surveys previously concentrated in close proximity to the resource zone. The
ZTEM survey of the Pinaya property commenced on May
8, 2011 and is expected to be completed on or about May 22, 2011. The 2,400
hectare survey of Minas Lucho property is expected
to commence immediately thereafter and serves to followup
earlier geological, geochemical and remote sensing studies that have
identified areas on the property prospective for gold and copper
mineralization similar to Pinaya.
At AM
Gold, we are very pleased to communicate the operational initiatives planned
for the year.. Our mission for 2011 is to continue
to build shareholder value through work at our core properties Pinaya, Peru and Red Mountain, Yukon Territory. We
appreciate your continued support.
Dr.
Stewart Jackson, P. Geol. a director of the Company, and a Qualified Person
has reviewed and approved the technical disclosure contained in this news
release.
�John Fiorino�
___________________
John Fiorino
CEO
AM GOLD INC.
For
further information on AM Gold please contact Murray Caruth
at 1-604-646-0067 or by e-mail at mcaruth@amgold.ca,
or visit AM Gold�s website at www.amgold.ca.
Neither
the TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Cautionary
Statement Regarding �Forward-Looking� Information
Some of
the statements contained in this press release are forward-looking statements
and information within the meaning of applicable securities laws.
Forward-looking statements and information can be identified by the use of
words such as �expects�, �intends�, �is expected�, �potential�, �suggests� or
variations of such words or phrases, or statements that certain actions,
events or results �may�, �could�, �should�, �would�, �might� or �will� be
taken, occur or be achieved. Forward-looking statements and information are
not historical facts and are subject to a number of risks and uncertainties
beyond AM Gold�s control. Actual results and developments are likely to
differ, and may differ materially, from those expressed or implied by the forward-looking
statements contained in this news release. Accordingly, readers should not
place undue reliance on forward-looking statements. The Company undertakes no
obligation to update publicly or otherwise revise any forward-looking
statements, except as may be required by law.
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