AM Gold Inc.: Announces Progress on Red Mountain Exploration Program
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 08/27/10 -- AM Gold Inc. (TSX VENTURE: AMG)(FRANKFURT: AMX) ('AM Gold' or the 'Company') is pleased to announce an update of the progress on the Company's exploration drill program at Red Mountain, Yukon Territory Canada.
AM Gold has contracted with Kluane Drilling of Whitehorse, Yukon Territory to provide two diamond drill core rigs for the Company's 2010 drill program at Red Mountain, which is focused primarily on the expansion of the 542,000 troy ounce Inferred Resource (23.6 million tonnes grading 0.7 g/tonne gold) previously announced on July 16, 2010. The first drill was mobilized to the project site and commenced drilling operations on drill hole ICE10028 on July 22, 2010. The second drill was mobilized to the property on July 26, 2010 and began drilling operations on drill hole ICE10029. The first holes of the program were planned to test vertical continuity of the mineralization at depth along the Jethro Structure. With that goal in mind, ICE10028 and ICE1029 were pushed through very difficult drilling conditions and completed to the depths of 526 and 480 meters respectively.
Upon completion of the deep drilling phase of the program, both drills began the work of testing lateral extension of the resource area. Three holes adjacent to the Jethro Structure have subsequently been completed to the depths of 376, 170 and 343 meters. Drilling is in progress on 6th and 7th holes of the program with a total of approximately 2,500 meters completed to date.
In an effort to maximize the time available for drilling this season, arrangements have been made to winterize and leave both drills on the property through the upcoming winter. In addition to increasing the potential for meters drilled this year, leaving the drill rigs at the project site will allow for the resumption of drilling operations approximately a month earlier for the 2011 campaign. The Company is currently in further discussions with Kluane Drilling to secure a third drill that is in close proximity to Red Mountain for the balance of the 2010 season.
In an effort to maximize data from previous work, the Company is also in the process of fire assaying core drilled during earlier programs at Red Mountain. Fire assaying will be carried out to refine gold values for several 2003 core holes which were largely evaluated using ICP geochemical gold analyses when they were originally drilled. Core sawing for fire assay is being conducted by the Company's technical team in the field as a second priority to the core drilled in the current program. To date, approximately 228 samples from the 2003 drill program, including core from drill holes DD 03-03; DD 03-07 and DD 03-08 have been sent to Eco Tech Laboratory Limited in Kamloops, British Columbia for fire assay. Due to the extraordinary amount of exploration activity in the Yukon and surrounding region, the turn around on assay results has been slower than was expected for the program. The Company is currently anticipating receiving assay results by mid-September.
AM Gold is also pleased to announce that it has closed the first tranche of the 4,000,000 non-brokered flow-through unit private placement previously announced on July 7, 2010 issuing a total of 1,885,714 units at $0.35 per unit raising gross proceeds of $660,000. The Company expects that the 2nd tranche will close in the next few days.
The proceeds of this tranche of the private placement are being used to fund the continued exploration of the Red Mountain gold project in Yukon Territory, Canada.
Shares issued pursuant to the private placement, as well as any Shares issued pursuant to the exercise of the Warrants, are subject to a four-month hold period from the date of closing of the private placement and the same is subject to regulatory approval.
The Company is also pleased to announce that all of the 1,500,000 warrants expiring on August 21, 2010 have been exercised raising gross proceeds of $300,000.
On behalf of the Board:
Gerald M. Aberle, President & CEO
AM GOLD INC.
This news release has been prepared by management. This document contains certain forward looking statements which involve known and unknown risks, delays, and uncertainties not under the Company's control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or achievements implied by these forward looking statements. We seek safe harbor.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Contacts:
Progressive IR Consultants Corporation
David Yeager
604-689-2881
david@AMGold.ca
www.amgold.ca