AM Gold Inc. (TSX VENTURE: AMG)(FRANKFURT: AMX) ("AM Gold" or the
"Company") is pleased to announce an updated resource estimate for
the Company's Pinaya Au/Cu Project in Peru (the "Pinaya Project").
A new resource estimate report has been jointly prepared by Brian
L. Cole, P. Geo. and Ronald G. Simpson P. Geo. (GeoSim Services
Inc.) and dated effective May 30, 2011 (the "Technical Report"). A
copy of the Technical Report will be filed on SEDAR under the
Company's profile at www.sedar.com.
John Fiorino, Chief Executive Officer of AM Gold, commented: "We
are extremely pleased with this increased resource estimate.
Inferred Resources have increased by approximately 110% contained
ounces gold and 177% contained pounds copper when compared to the
Company's previous inferred mineral resource estimate prepared in
2006. In addition, the Company upgraded 22% of the copper and 31%
of the gold of the indicated resource estimate prepared in 2006 to
a measured resource."
GeoSim Services Inc., a co-author of the report, modelled a new
resource estimate for the Pinaya Project. The new estimate
supersedes the previous estimate prepared by J. Douglas
Blanchflower P. Geo. in October 2006 (see the Company's news
release dated September 20, 2006). Mineral resources were estimated
for the Gold Oxide Skarn Zone ("GOSZ") as well the two copper /
gold zones: the Western Porphyry Zone ("WPZ") and the Northwestern
Porphyry Zone ("NWPZ"). Highlights of the new mineral resource
estimate are:
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Mineral Resources - Gold Oxide Skarn Zone
---------------------------------------------------------------------------
Zone and Oz lbs
Cut-off Tonnes Contained Contained Gold Copper
Grade Class 000's g/t Au % Cu 000's 000's
---------------------------------------------------------------------------
GOSZ Measured 2,178 0.920 0.093 64 4,465
--------------------------------------------------------------
Indicated 4,223 0.735 0.092 100 8,565
--------------------------------------------------------------
0.25 g/t Au Measured and 6,401 0.798 0.092 164 13,030
Indicated
--------------------------------------------------------------
Inferred 2,383 0.597 0.081 46 4,256
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Mineral Resources - Combined Cu/Au Porphyry Zones
---------------------------------------------------------------------------
Zone and lbs Ounces
Cut-Off Tonnes Contained Contained Contained Copper Gold
Grade Class 000's % Cu g/t Au % CuEQ 000's 000's
---------------------------------------------------------------------------
WPZ + Measured 5,530 0.439 0.493 0.703 53,526 88
NWPZ -------------------------------------------------------------------
0.3% Indicated 26,738 0.384 0.423 0.610 226,213 364
CuEQ -------------------------------------------------------------------
Measured 32,269 0.393 0.435 0.626 279,738 452
and
Indicated
-------------------------------------------------------------------
Inferred 35,412 0.402 0.270 0.546 313,911 307
---------------------------------------------------------------------------
Resource Estimate Parameters and Assumptions
The Pinaya Project sample database contains information from 160
core holes (46,531.7m) completed between 2004 and the end of 2008.
Of these, 151 core holes are located within the present resource
model area with 44,306m being utilized in the resource modelling.
These are HQ inclined diamond drill holes spaced at centres ranging
from between 25m to 200m. Specific Gravity was assigned according
to lithology. Gold and copper assays were capped pursuant to the
results of decile analysis and the gold and copper mineralization
was treated separately when creating the mineralization domain
constraints. The GOSZ was treated separately as a gold zone while
the copper mineralization in the WPZ overprints portions of the
GOSZ gold zone and extends below it. Gold and copper in the NWPZ
were also modelled as separate domains.
The resources were estimated using ordinary kriging for the GOSZ
and the WPZ and by the inverse distance squared method for the
NWPZ. Classified blocks were constrained by an optimized pit shell.
Cut-off values utilized are 0.25 grams gold per tonne ("g/t Au")
and 0.3 percent copper equivalent ("%CuEq"). The gold cut-off was
applied to the GOSZ and the copper equivalent cut-off to the WPZ
and NWPZ respectively.
As there is not sufficient information at present to divide the
deposit into oxide vs. sulphide components (or leachable vs.
non-leachable), it was decided to treat the entire resource as a
conventional copper concentrator scenario and use costs associated
with deposits of this type and size to establish a copper
equivalent value. The copper equivalent value was thus calculated
based on assumed metal prices of $3.00/lb Cu and $1,100/oz Au. The
formula derived from this was CuEq = % Cu + g/t Au x 0.535. Overall
recovery was assumed to be 80%. General and Administration,
Processing and Ore Mining costs were assumed to be $10/tonne. Base
waste mining costs were assumed to be $2.00/tonne and overburden
removal costs were set at $1.50/tonne.
The tables above present "in situ" contained metal with no
consideration for recovery factors. It is not known whether any of
the copper in the GOSZ is recoverable as it primarily a heap leach
gold target.
The resource estimate is effective May 30, 2011 and was prepared
in accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects ("NI 43-101") as well as
commensurate with CIM definitions (2005).
Independent Quality Control and Analytical Protocol
All samples taken since the October 2006 resource estimate and
used in this resource update were analyzed by SGS Laboratories in
Lima, Peru. During the 2008 drill program core of HQ size was split
in half on site using a diamond saw. Samples were crushed and
portion pulverized for analysis. Drill core samples were assayed
for gold using a 30 gram fire assay procedure with a gravimetric or
Atomic Absorption (AA) finish. A 36-element ICP analysis was then
carried out using an Aqua Regia (4 acid) digestion. Copper assays
over 1.0% were reanalyzed using an AA procedure.
A quality assurance/quality control (QA/QC) program including
standard material of known copper and gold content, blanks, and
duplicate samples has been followed. Standards and blanks were
inserted every 20 samples with duplicate samples also taken every
20 samples. Approximately 5% of all samples were sent to an
alternate laboratory (ALS Chemex Laboratories in Lima, Peru) for
check assaying of gold and copper.
Comparison between 2006 and 2011 Mineral Resource Estimates
A comparison between this updated mineral resource estimate and
the previous 2006 mineral resource estimate is set out in the chart
below.
---------------------------------------------------------------------------
Resource Estimate Comparison
---------------------------------------------------------------------------
2006(1)(2)
---------------------------------------------------------------------------
lbs Ounces
Tonnes Contained Contained Copper Gold
Zone Cut-Off Class 000's % Cu g/t Au 000's 000's
---------------------------------------------------------------------------
GOSZ GMV(3) Measured
----------------------------------------------------------
Indicated 13,870 0.29 0.42 88,000 188
----------------------------------------------------------
Meas+Ind Nil Nil Nil Nil Nil
----------------------------------------------------------
Inferred 7,180 0.27 0.31 43,000 71
---------------------------------------------------------------------------
WPZ GMV(3) Measured Nil Nil Nil Nil Nil
----------------------------------------------------------
Indicated 15,260 0.54 0.63 181,000 310
----------------------------------------------------------
Meas+Ind
----------------------------------------------------------
Inferred 5,540 0.59 0.55 72,000 97
---------------------------------------------------------------------------
NWPZ Indicated Nil Nil Nil Nil Nil
----------------------------------------------------------
Inferred Nil Nil Nil Nil Nil
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2011(2)(4)
---------------------------------------------------------------------------
lbs Ounces
Tonnes Contained Contained Copper Gold
Zone Cut-Off Class Cut-Off 000's % Cu g/t Au 000's 000's
---------------------------------------------------------------------------
Measured 0.25g/t 2,178 0.093 0.920 4,465 64
Au
-------------------------------------------------------------
GOSZ GMV(3) Indicated 4,223 0.092 0.735 8,565 100
-------------------------------------------------------------
Meas+Ind 6,401 0.092 0.798 13,030 164
-------------------------------------------------------------
Inferred 2,383 0.081 0.597 4,256 46
---------------------------------------------------------------------------
Measured 0.3% 5,530 0.439 0.493 53,526 88
CuEq
-------------------------------------------------------------
WPZ GMV(3) Indicated 12,672 0.409 0.495 114,261 202
-------------------------------------------------------------
Meas+Ind 18,202 0.418 0.494 167,787 289
-------------------------------------------------------------
Inferred 7,540 0.395 0.327 65,663 79
---------------------------------------------------------------------------
Indicated 0.3% 14,067 0.361 0.359 111,951 162
NWPZ CuEq
-------------------------------------------------------------
Inferred 27,872 0.404 0.254 248,248 228
---------------------------------------------------------------------------
Notes:
1. See the Company's news release dated September 20, 2006 for first time
disclosure.
2. Does not take into account metallurgical recovery and assumes 100%
recovery.
3. Gross Metal Value cut-off (greater than US$5.50/tonne, based on
US$1.25/lb Cu and $US450/oz Au).
4. First time disclosure contained in this news release.
The discrepancy between tenor and tonnages in the GOSZ set out
in the chart above is attributed to differences in methodology and
rationale between the 2006 and the 2011 resource estimations. The
2006 estimation attempted to embrace a copper overprint on the GOSZ
whereas the 2011 resource estimation rationalized the GOSZ as a
heap leachable gold target only and focused solely on the gold
domain.
Brian L. Cole, P. Geo. and Ronald G. Simpson P. Geo. have
reviewed and approved the technical disclosure contained in this
news release and are independent Qualified Persons within the
meaning of NI 43-101.
About AM Gold Inc.
AM Gold Inc. is a publicly held resource company based in
Vancouver, Canada. The Company is listed on the TSX Venture
Exchange under the symbol "AMG" and is quoted on the Frankfurt
Exchange under the symbol "AMX". The Company is focused on creating
shareholder value through the development of the Company's gold and
gold-copper projects in the Yukon and Peru while building a
portfolio of quality pipeline projects in North and South America.
The Company's Red Mountain gold property is located in central
Yukon Territory approximately 55 kilometres northwest of the
community of Mayo in the Tintina Gold Belt. AM Gold holds an 80%
interest in Red Mountain with an option to acquire 100% ownership
of the 52 contiguous claims that constitute the property and cover
approximately 1,168 hectares. AM Gold's Pinaya gold-copper project
is located approximately 775 kilometres southeast of the city of
Lima, Peru in the Tintaya Gold Belt. The Company maintains 100%
ownership of 35 mining concessions covering the 19,200 hectare
Pinaya land position. AM Gold's corporate offices are located Suite
305 - 369 Terminal Avenue, Vancouver, British Columbia, V6A 4C4
(phone: 604-646-0067).
This news release was prepared on behalf of the Board of
Directors, which accepts full responsibility for its contents.
On behalf of the Board:
Gerald M. Aberle, President and Chief Operating Officer
AM GOLD INC.
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
1-604-692-0117 (FAX) mcaruth@amgold.ca www.amgold.ca
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