AM Gold Inc.
TSX VENTURE : AMG
FRANKFURT : AMX

AM Gold Inc.

December 02, 2010 08:01 ET

AM Gold Announces Updated 1.32 Million Troy Ounce Gold Inferred Resource Estimate for Red Mountain Property

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 2, 2010) - AM Gold Inc. (TSX VENTURE:AMG)(FRANKFURT:AMX) ("AM Gold" or the "Company") is pleased to announce that an updated National Instrument 43-101 report ("the Report") has been prepared for the Company by Brian Leslie Cole, P. Geo., who is a Qualified Person under National Instrument 43-101. The Report includes an updated inferred resource estimate of 79.3 million tonnes grading 0.5 g/t gold, approximately 1.32 million contained troy ounces of gold for the Red Mountain Property, Yukon Territory, Canada. 

The updated inferred resource estimate for the Red Mountain Property has increased the previous resource estimate of approximately 542,000 contained troy ounces gold (23.6 million tons grading 0.7 g/t gold) previously announced June 16, 2010 in the same category. 

Twenty-four inclined drill holes with a cumulative total of 6,609m were utilized in the resource estimation. They have an average depth of 275m, with the deepest being 527m. Dips ranged between -50° and -80°. The holes ranged in size from HTW to NQ and are spread across 22 section lines spaced at 25m or 50m intervals.

Gold mineralization is related to a porphyry intrusive body and where it is cut by a northwest trending fault zone, the Jethro Structure. The gold resource zone has a projected strike length of 700m, strikes 120°, and dips steeply southwest. True width averages 165m (range 130m – 190m). Gold mineralization is associated with broad zones of disseminated sulphide with higher grade mineralization being associated with areas with steeply dipping sheeted sulphide-bearing quartz vein zones as well as multi-generational quartz veining, sometimes stockworked. The gold mineralization is hosted in quartz monzonite porphyry intrusive rock and also in the encasing meta-sedimentary sandstone and quartzite rocks as well, within the bounds of the Jethro Structure.

Mineralization has been verified to a depth of 980m elevation, or just a little shy of 500m below surface. The floor of the grade model was projected to an elevation of 1,200m under the original resource area and 1,300m elevation under the newer drilling to the southeast. The floor was lowered accordingly where deeper holes penetrated into mineralization at deeper depths.

The estimation method utilized was the constrained block model type. Resource was projected no more than 50m from the terminal section lines. In situations where drill holes collared and/or ended in mineralization above cut-off, the area of influence of a resource polygon was not extrapolated beyond 20m, except where supported by adjacent sections. The resource estimate was performed commensurate with CIM definitions (2005). The specific gravity utilized in the estimate was 2.55g/cm3 and the cut-off grade employed was 0.2g/t Au. 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:

Resource Model
Red Mountain Property, Yukon
                     
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

Hole ICE10037 (previously announced November 30, 2010) was drilled north of the resource area and off the main Jethro Trend. Mineralization in the order of 233m grading 0.36g/t Au in porphyry intrusive rock was intersected, with 0.83 g/t gold over 5.48m intersected at the bottom of the hole. ICE10037 was not included in the resource estimate as the hole could not be incorporated within the current geological model due to the distance between the collar of the hole and the current resource area.

The 2010 drilling in and around the inferred resource area has not closed the gold mineralization in any direction laterally or at depth, with the strongest mineralization open to extension at the east and west ends of the inferred resource along strike of the Jethro Structure and at depth. Hole ICE10037 presents additional opportunity for the 2011 drill season in an area previously untested by drilling well north of the current resource area.

Brian L Cole, P. Geo., has reviewed the technical disclosure contained in this news release and is a Qualified Person and is independent of the Company within the meaning of National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

This news release was prepared on behalf of the Board of Directors, which accepts full responsibility for its contents.

On behalf of the Board:

John Fiorino, CEO

AM GOLD INC.

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.

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.

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