AM Gold Inc. (TSX VENTURE: AMG)(FRANKFURT: AMX) -
Dear Shareholders,
I am writing to update you on the progress of AM Gold Inc. (the
"Company" or "AM Gold") (TSX VENTURE: 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:
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Red Mountain Property, Yukon
Inferred Mineral Resource
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Cu-Off Grade Volume SG Tenor
(g/t Au) (m3) (g/cm3) Tonnes (g/t Au) Troy Oz. Au
---------------------------------------------------------------------------
0.1 32,153,750 2.55 81,992,063 0.51 1,331,233
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0.2 31,111,200 2.55 79,333,560 0.52 1,318,677
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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
---------------------------------------------------------------------------
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Dilution below
0.2 within
Wire Frame 1,108,150 2.55 2,825,783 0.16 14,445
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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, CEO
AM GOLD INC.
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.
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.
Contacts: AM Gold Inc. Murray Caruth 1-604-646-0067 604-692-0117
(FAX) mcaruth@amgold.ca www.amgold.ca
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