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Mining industry

AM Gold Inc. Announces Updated Resource Estimate for Pinaya Au/Cu Project in Peru

Strategic Insights

— 2 min read

AM Gold Inc., a publicly held resource company based in Vancouver, Canada, is pleased to announce an updated resource estimate for the Company's Pinaya Au/Cu Project in Peru. The new estimate, prepared by Brian L. Cole, P. Geo. and Ronald G. Simpson P. Geo. of GeoSim Services Inc., has increased the inferred resources by approximately 110% contained ounces of gold and 177% contained pounds of copper when compared to the Company's previous inferred mineral resource estimate prepared in 2006. The updated resource estimate also upgrades 22% of the copper and 31% of the gold of the indicated resource estimate prepared in 2006 to a measured resource.

Key Takeaways:

  • The updated resource estimate for the Pinaya Au/Cu Project in Peru has increased inferred resources by approximately 110% contained ounces of gold and 177% contained pounds of copper compared to the Company's previous estimate.
  • The upgraded resource estimate includes a measured resource of 22% copper and 31% gold, up from the previous indicated resource estimate.
  • Mineral resources were estimated for the Gold Oxide Skarn Zone (GOSZ), the Western Porphyry Zone (WPZ), and the Northwestern Porphyry Zone (NWPZ) using ordinary kriging and inverse distance squared methods.
  • The resources were estimated using a conventional copper concentrator scenario and assumed metal prices of $3.00/lb Cu and $1,100/oz Au.
  • The technical report, dated May 30, 2011, was prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects (NI 43-101) and commensurate with CIM definitions (2005).
  • GeoSim Services Inc. conducted a quality assurance/quality control program, including standard materials, blank samples, and duplicate samples, with approximately 5% of all samples sent to an alternate laboratory (ALS Chemex Laboratories) for check assaying.
  • The Pinaya Project sample database contains information from 160 core holes (46,531.7m) completed between 2004 and 2008, with HQ inclined diamond drill holes spaced at centers ranging from 25m to 200m.
  • Specific gravity was assigned according to lithology, and gold and copper assays were capped pursuant to the results of decile analysis.

Statistics:

  • The updated resource estimate includes:

+ Inferred resources of 1.36 million ounces of gold and 34 million pounds of copper.

+ Measured resources of 445 million pounds of copper and 145,000 ounces of gold.

  • The estimated costs for the project include:

+ General and Administration costs of $10/tonne.

+ Processing costs of $10/tonne.

+ Ore mining costs of $2.00/tonne.

+ Base waste mining costs of $2.00/tonne.

+ Overburden removal costs of $1.50/tonne.

  • The assumed metal prices are:

+ $3.00/lb Cu.

+ $1,100/oz Au.

  • The recovery factor is assumed to be 80%.

Sources:

  • Technical Report, May 30, 2011, prepared by Brian L. Cole, P. Geo. and Ronald G. Simpson P. Geo. of GeoSim Services Inc.
  • AM Gold Inc.'s news release dated September 20, 2006.
  • National Instrument 43-101 - Standards of Disclosure for Mineral Projects (NI 43-101) and CIM definitions (2005).

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