AM Gold Inc: Clarification and Retraction of Previously Issued Technical Disclosure
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 04/21/11 -- AM GOLD INC. (TSX VENTURE: AMG)(FRANKFURT: AMX) ('AM Gold' or the 'Company') announces that, as a result of a review by the British Columbia Securities Commission (the 'BCSC'), the Company is issuing this news release to clarify and retract certain of the previous technical disclosure posted on its website at www.amgold.ca.
The Company posted on its website three mining analyst reports dated November 16, November 22 and December 7, 2010 (collectively, the 'Analyst Reports') that contained an initial economic analyses of the Company's Red Mountain and Pinaya mineral properties. The economic analyses are not supported by the Company's previous disclosure and technical report filings.
The Company has not determined that the mining analyst who prepared the Analyst Reports is a qualified person (as such term is defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects ('NI 43-101')) and has not determined that the mining analyst has sufficient relevant experience, expertise and access to data to provide meaningful and reliable economic projections that are worthy of public disclosure. Therefore the disclosure of the Analyst Reports by the Company was contrary to NI 43-101 and the results of the analyses are retracted by the Company and should not be relied on. Further, the Analyst Reports contained:
-- first time disclosure of economic projections from the Company's Red
Mountain and Pinaya mineral properties, including net present value,
annual and daily production rates, revenue, capital and operating costs,
cash costs per ounce and net asset value;
-- non-compliant resource estimates, including a resource estimate at the
Pinaya property expressed as gold equivalent ounces which did not
indicate how the gold equivalent was calculated, did not disclose
resource classification, tonnage and grade for each class, and added
inferred quantity to other classes contrary to the Company's
requirements under NI 43-101; and
-- various predictions of increased mineral resources and exploration
potential that did not disclose a basis for the increased quantities and
did not provide mandatory cautionary language required by NI 43-101.
The Company retracts the economic analysis and projections of increased mineral resources and exploration potential contained in the Analyst Reports and has removed the Analyst Reports from its website. In the event the Company receives a new resource estimate or a preliminary economic assessment material to the Company for any of its mineral projects the Company will promptly disclose the results and file a new technical report as required by NI 43-101.
On or about April 12, 2011 an e-mail alert (the 'E-mail Alert') was disseminated on behalf of the Company containing estimates of mineral resources on the Company's Red Mountain and Pinaya properties. Contrary to the requirements of NI 43-101 the E-mail Alert did not disclose mineral estimates by category, tonnes and grade; added inferred resource to other categories; and provided a link to a video presentation (the 'Video Presentation') on the Company containing similar non-compliant disclosure. The Company retracts the E-mail Alert and the Video Presentation and clarifies that the mineral resource at its Red Mountain property, as stated in its news release of December 2, 2010 (a copy of which is available under the Company's SEDAR profile at www.sedar.com), is all inferred class, at 79.3 million tonnes grading 0.52g/t gold, containing approximately 1.32 million gross troy ounces of gold. As disclosed in the Company's news release of December 2, 2010 a sensitivity analysis was performed on such 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
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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
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0.4 19,638,100 2.55 50,077,155 0.63 1,021,878
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Dilution below 1,108,150 2.55 2,825,783 0.16 14,445
0.2 within Wire
Frame
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The Company further clarifies that the mineral resource at its Pinaya property, as first disclosed by news release dated September 20, 2006 (a copy of which is available under the Company's SEDAR profile at www.sedar.com), is both an inferred and an indicated resource. The inferred resource is estimated at 12.72 million tonnes grading 0.41 g/t gold and 0.41% copper, approximately 168,000 ounces gold and 115,000,000 lbs. copper contained and the indicated resource is estimated at 29.13 million tonnes grading 0.53 g/t gold and 0.42% copper, approximately 498,000 ounces gold and 269,000,000 lbs. of copper contained.
The Company's website, corporate presentation, fact sheet and the E-mail Alert fail to identify and disclose the qualified person who prepared or supervised the preparation of the technical information. The E-mail Alert has been retracted and the Company's revised marketing materials will include the qualified person responsible for the technical content.
In those instances where the Company has clarified or retracted previous disclosure, the Company advises readers not to rely on such statements as they may continue to be found in the public domain.
The Company is coordinating with the BCSC with respect to the other items detailed in the BCSC's Cease Trade Order of April 13, 2011 and will issue a further news release in due course.
Dr. Stewart Jackson, P. Geol., is a Qualified Person under NI 43-101 and has reviewed and approved the technical disclosure contained in this news release.
ON BEHALF OF AM GOLD INC.
John Fiorino, CEO
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