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AM Gold Provides update on Rokmaster Default

October 17, 2014

AM GOLD INC. (TSX-V: AMG; Frankfurt: AMX) (“AM Gold” or the “Company”) provides an update with respect to the notice of default it issued to Rokmaster Resources Corp. (“Rokmaster”) in connection with the Pinaya Option and Joint Venture Agreement (the “Option and JV Agreement”).

Rokmaster declared a force majeure under the Option and JV Agreement on September 22, 2014 (see AM Gold’s news release dated September 23, 2014). AM Gold subsequently issued Rokmaster a notice of default under the Option and JV Agreement on September 24, 2014 for failure to (i) remit a cash option payment to AM Gold in the amount of $400,000 and (ii) confirm that it incurred a further $1.5 million in exploration expenditures (see AM Gold’s news release dated September 25, 2014). Such cash payment and exploration expenditures (together, the “Option Payment”) were required to be paid/incurred on or before September 11, 2014.

Rokmaster has disputed the validity of the notice of default in light of its declaration of force majeure (see Rokmaster’s news release dated September 25, 2014). AM Gold has notified Rokmaster that it does not accept Rokmaster’s position that the force majeure, if there is one, applies to the Option Payment. Specifically, the Option Payment was due on or before September 11, 2014 and Rokmaster declared a force majeure on September 22, 2014 – 11 days after the Option Payment was due. If Rokmaster believed that a force majeure was triggered, it should have declared a force majeure prior to the Option Payment due date and if it had done so, AM Gold may have considered the assertion of force majeure in the context of the Option Payment. In any event, even if a force majeure did exist, a failure to make a payment or incur expenditures due to lack of funds does not constitute a force majeure under the Option and JV Agreement.

If Rokmaster is able to cure the defaults in connection with the Option and JV Agreement then at such time AM Gold will consider the application of the alleged force majeure with respect to the other time limits imposed by the Option and JV Agreement. If Rokmaster does not cure the defaults by October 24, 2014, or enter into alternative arrangements that are acceptable to AM Gold, then AM Gold will determine which of the rights available to it shall be exercised including but not limited to, terminating the Option and JV Agreement.

AM Gold will issue a further news release when updates on this matter are available.

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 100% by AM Gold subject to a net smelter returns royalty. AM Gold may reduce the NSR payable on the 52 quartz claims 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. An additional 131 quartz claims (2,430 hectares) are held 100% by the Company with no NSR. 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).


/s/ “John Fiorino”           

John Fiorino
Chief Executive Officer

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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