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AM Gold Makes Anniversary Payment Under Purchase Agreement To Acquire Remaining 20% Of Its Red Mountain Property

August 10, 2012

AM Gold Inc. (TSX-V: AMG; Frankfurt: AMX) (“AM Gold” or the “Company”) is pleased to announce that it has made the second anniversary payment of $25,000 in cash and 175,000 common shares towards the acquisition of the remaining 20% of the Red Mountain property (the “Property”).  The remaining 20% ownership in the Property will be transferred to AM Gold upon payment of the third, and final, anniversary payment due next year.

The above share and cash payments were made to 629281 B.C. Ltd. (Corwin Coe) and the shares are subject to a hold period expiring on November 28, 2012

John Fiorino CEO of AM Gold comments “We are pleased to make our fourth of five payments scheduled to complete 100% earn in on our Red Mountain Yukon project.  It is remarkable that the project has gone from grassroots to an inferred resource estimate of approximately 127 million tonnes grading 0.48 g/t gold, approximately 1.95 million ounces of gold1 in two short seasons and remains open in all directions and at depth.”

Note
(1)           For the first time disclosure of the inferred resource estimate see the Company’s news release dated March 8, 2012, a copy of which is available under the Company’s SEDAR profile at www.sedar.com.

Under the terms of the agreement, originally announced on August 23, 2010, the Company is to make the following payments:

  1. $50,000 on signing (PAID).
  2. $50,000 and 200,000 shares within 7 days of regulatory approval. (PAID).
  3. $25,000 and 175,000 shares will paid on or before the first anniversary of the signing date. (PAID).
  4. $25,000 and 175,000 shares or $175,000, at AM Gold's discretion, will be paid on or before the second anniversary of the signing date. (PAID).
  5. $50,000 and 450,000 shares or $450,000, at AM Gold's discretion, will be paid on or before the third anniversary of the signing date.
  6. A bonus will be paid of $250,000 in cash or shares, at AM Gold’s discretion, if a resource of 2 million ounces of gold is defined through a National Instrument 43-101 report.

AM Gold may reduce the NSR payable from 2% to 0.5% by agreeing to pay $1,000,000 for the first 1% of the NSR and $750,000 for the second 0.5% of the NSR at any time, at AM Gold's discretion.

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.  The Company’s Red Mountain gold property consists of approximately 3,600 hectares of contiguous quartz claims.  52 of such quartz claims (1,168 hectares) are held 80% by the Company with an option to acquire 100% ownership and are subject to a net smelter returns royalty and 131 quartz claims (2,430 hectares) are held 100% by the Company.  AM Gold’s Pinaya gold-copper project is located approximately 775 kilometres southeast of the city of Lima, Peru in the Tintaya Gold Belt.  Subject to the option agreement between the Company and Rokmaster Resources Corp., 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 605 – 369 Terminal Avenue, Vancouver, British Columbia, V6A 4C4 (phone: 604-646-0067).

Dr. Stewart Jackson, P. Geol., P. Geo, a director of the Company, and a Qualified Person (within the meaning of National Instrument 43-101), has reviewed and approved the technical disclosure contained in this news release.

ON BEHALF OF AM GOLD INC.

(signed) “John Fiorino”                    

John Fiorino
Chief Executive Officer
AM GOLD INC.

For further information on AM Gold, please contact Murray Caruth at 1-604-646-0067 or by email at [email protected], or visit AM Gold’s website at: http://amgold.ca.

Cautionary Statement Regarding “Forward-Looking” Information

Some of the statements contained in this press release are forward-looking statements and information within the meaning of applicable securities laws. Forward-looking statements and information can be identified by the use of words such as “expects”, “intends”, “is expected”, “potential”, “suggests” or variations of such words or phrases, or statements that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved.  Forward-looking statements and information are not historical facts and are subject to a number of risks and uncertainties beyond the Company’s control.  Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except as may be required by law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 

 
     
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