2021 is a unique year for the gold mining sector. In some areas of the sector we are seeing exploration companies rise to $1 billion+ market valuations, while in other areas of the sector we are seeing development stage companies with multi-million ounce resources being valued at $25 per ounce of gold in the ground, in some cases even less than that. 

The market is rewarding exploration companies with relatively new discoveries, while punishing the explorers that have discoveries that are 2-3 years old. This is despite the fact many of these explorers are continuing to have incredible drill results as they expand their resources. 

The number of new gold discoveries continues to decline. And the number of new gold mines with production above 100,000 ounces per year brought into production in the US and Canada in the last couple of years can be counted on one hand. 

True high-grade gold discoveries are becoming increasingly rare, and the gold mining industry is more challenged than ever before to replace production. 

Source: @TaviCosta

New gold discoveries are rare, high-grade gold discoveries are more rare, and high-grade gold discoveries of substantial (1,000,000+ ounces) size in tier-1 jurisdictions are about as common as finding a winning lotto ticket walking down the street. 

Amex Exploration (TSX-V:AMX, OTC: AMXEF) is one of the few gold juniors that can boast that it has a winning lotto ticket in the form of its high-grade Perron Gold Project in Quebec, Canada. Perron is located in a mining-friendly area near the Quebec/Ontario border that hosts numerous large gold deposits.

Additionally, more than 15 kilometers of prospective faults along an underexplored  section of the Abitibi greenstone belt. Regional geology and drilling suggest there is an opportunity to host multiple ore deposits of various types. Orogenic gold and gold rich polymetallic VMS systems on the property, and the current 300,000 meter drilling program aims to provide a basis for maiden NI43-101 resource estimate. 

Perron is well serviced by existing infrastructure including roads, electricity and skilled labour, and can be drilled year round. Additionally, the area also has a long history of mining with a skilled local workforce, low housing costs to hold exploration teams instead of mining camps, and access to town amenities. Therefore, Amex has the ability to significantly upsize drill programs. 

The ultra high-grade Eastern Gold Zone (EGZ) was discovered in December 2017 with hole PE-17-03, which identified two zones of near-surface mineralization called the High Grade Zone and the Denise Zone. The Zones returned values including 12.22 grams/tonne gold over 4.66 meters and 0.81 grams/tonne gold over 76.50 meters, respectively. 

Drill core with visible gold from the Eastern Gold Zone at Amex’s Perron Project in Quebec 

Follow-up drilling in 2018 in drill hole PE-18-17 intersected bonanza grade gold including 269.23 grams/tonne gold over 1.35 meters in the High Grade Zone. Subsequently, Amex launched a targeted exploration drill program that began in Q1 of 2019 totalling approximately 3,000 meters. It was focused on the High Grade Zone, from which assays returned grades including 393.33 grams/tonne gold over 1.70 meters in PE-19-22, 39.58 grams/tonne gold over 0.80 meters in PE-19-23, and 214.71 grams/tonne gold over 0.70 meters in PE-19-24. 

More visible gold in quartz veining from the Eastern Gold Zone at Amex’s Perron Project in Quebec

Amex has C$25 million in its treasury and the company is in the midst of a 300,000 meter drill program with 10 drill rigs turning at Perron. This is the largest drill program in the world run by a junior. Relatively low drilling costs for Amex (all in costs of roughly $150 per meter due to excellent infrastructure and road access in the Abitibi Greenstone Belt of Quebec), and a project that continues to exhibit high-grade gold mineralization all over the place has encouraged the company to be especially aggressive with the drills.  

Amex is committed to delivering a maiden resource estimate by Q1 2022, and based upon my analysis I believe that this resource estimate could deliver an upside surprise to the market. 

There are three primary gold zones at Perron:

  • The Eastern Gold Zone (EGZ) - The High Grade Zone (HGZ) at the EGZ extends to a vertical depth of at least 1,100 meters and has been traced over 350 meters laterally. With an average vein width of 7 meters, and more than 100 drill holes intersecting grades above 10 grams/tonnes gold, it’s not difficult to come up with 2,000,000 ounces as a conservation estimate of the resource at the High Grade Zone. 

"We continue to see these super high grade results in the core part of the HGZ. PE-21-329 is in fact the third highest grade intersect on the project with a metal factor of 483 and is surrounded by the other very high grade holes. We are seeing a jewel box building in the heart of the HGZ near surface from about 100 meters from surface down to about the -300 meters level. These results will clearly have a very positive impact on the number of ounces and the overall grade on the resource calculation that we will be initiating at the end of the year." ~ Jacques Trottier, Executive Chairman of Amex

Recent near-surface results from the HGZ include:

  • 36.86 g/t gold over 13.10 meters, including 78.47 g/t gold over 0.65 meters and 529.06 g/t gold over 0.75 meters, for a metal factor of 483 at a vertical depth of approximately 200 meters in hole PE-21-329. This intersection expands and improves the richest part of the High Grade Zone at the ~200 meters level.
  • 15.18 g/t gold over 14.85 meters, including 195.79 g/t gold over 0.50 meters and 161.64 g/t gold over 0.65 meters, for a metal factor of 225 at a vertical depth of approximately 175 meters in hole PE-21-338.

UPDATE: Drill results announced June 28th, 2021 continue to confirm the extremely high-grade nature of the HGZ

Then we have the Denise Zone which is located 50-100 meters to the south of, and parallel to, the HGZ. 

The Denise Zone is much lower grade than the HGZ, however, it hosts much wider and continuous intersections of 1+ g/t gold including 115.60 meters of 1.39 g/t gold and 189.40 meters of 1.07 g/t gold. I estimate the Denise Zone contains at least 300,000 ounces of gold. 

This makes for a total estimate of 2,300,000 ounces of gold for the Eastern Gold Zone. While this is an impressively large number, it’s even more important to note that metallurgical recoveries have been 95%+ and the Eastern Gold Zone hosts gold mineralization (including high-grade and bonanza grade gold) right from surface, continuous to depth, and open at depth. 

Completed by SGS Canada Inc., a leader in metallurgical and analytical studies, Eastern Gold’s metallurgy program has +99% recovery in gold and silver. The metallurgical holes’ head grade returned 27.70 grams/ton of gold over 11.80 meters in PEM-20-001, 12.70 grams/ton of gold over 16.60 meters in PEM-20-002, and 5.65 grams/ton of gold over 10.60 meters in PEM-20-003. 

Additionally, large diameter drilling (PQ) resulted in an intersection of abundant coarse visible gold and an increase of metal factor compared to neighbouring holes. All three composite samples were found to be amenable to gravity, flotation, and cyanidation, with overall gold and silver recoveries greater than 99%. And it’s likely that a simple gravity-cyanidation flowsheet would be sufficient to achieve very high recoveries. 

  • Gratien and Grey Cat Zones - The Gratien and Grey Cat Gold Zones add to the attractiveness of the Perron Property, with both zones hosting significant near surface gold resources that could be amenable to open pit mining methods. Gratien in particular hosts a high-grade gold corridor that has been traced over a strike length of roughly 1,000 meters - Gratien is open for expansion along strike and at depth. Results from 2019 drilling at Gratien include 4.90 meters grading 27.46 g/t gold in hole PEG-19-68, and 14.60 meters grading 16.48 g/t gold in hole PEG-19-89. 

The Grey Cat Gold Zone is another area of significant gold resources that Amex is working hard to expand through drilling this year. Grey cat has potential for expansion along strike in both directions near surface, and Amex is also planning to drill to depth for higher grade gold. 

Amex has intersected higher grades at depth at Grey Cat including 2.0 meters grading 35.98 g/t gold  from 268 meters downhole in hole PEG-19-80 and 6.50 meters grading 9.39 g/t gold from 238 meters downhole in hole PEG-19-94:

2021 drilling at Grey Cat and Gratien are focused on resource definition drilling with the aim of producing a maiden resource estimate for each of these zones. 

Of the budgeted 2021 drilling 20% will be on regional drilling, which is focused on making new discoveries, both within the Beaupré block and outside of the Beaupré - the Summer 2021 regional exploration program is focused on targeting VMS structures.     

Share Structure

Amex management owns 13% of the outstanding shares and institutional investors including Eric Sprott (15%) own more than 50% of Amex. This leaves a retail trading float of about 30 million shares. Considering how much drilling Amex has completed to date at Perron, and the size of the maiden resource the company will deliver in 6-9 months, Amex management have done well to keep the share count below 100 million shares fully-diluted. 


CEO and president Victor Cantore is a capital markets professional specializing in the resource and hi-tech sectors, working in the industry since 1992. Having begun his career as an investment advisor, then moving into management roles at both public and private companies, Mr. Cantore has organized and structured numerous equity and debt financings, mergers and acquisitions, joint venture partnerships and strategic alliances. Mr. Cantore currently serves on the boards of various companies both private and public.

Chief Operating Officer Pierre Carrier carried out several financing and acquisitions in his career, in addition to holding high positions at multiple companies. Mr. Carrier served as President of Opsens for almost 10 years, and before that, Mr. Carrier was President and Chief Executive Officer of Roctest Ltd, a company whose shares were traded on the Toronto Stock Exchange.

Vice President Exploration Kelly Malcom is an Ontario-based Professional Geologist focused on precious metal exploration, specializing in the integration and interpretation of geological, geochemical, and geophysical data to guide exploration and development activities. Mr. Malcolm was even involved in the discovery and delineation of Detour Gold’s high grade 58N gold deposit. Mr. Malcolm has acted as director, advisor, or management for several public and private mineral exploration companies. 

The Opportunity 

At its most recent C$2.28 share price, Amex has a C$200 million market valuation. Assuming that my estimates for the resources at the Eastern Gold Zone are roughly accurate, Amex’s gold in the ground is currently being valued at less than C$100 per ounce. Moreover, the market is giving zero value to the rest of the Perron Project including the Gratien and Grey Cat Zones and the potential for new regional discoveries in the Beaupré Block.

In my estimation, this presents a very attractive opportunity for the following reasons:

  • Perron is located in a tier-1 jurisdiction with excellent infrastructure and a history of mining. 
  • Amex has outlined high-grade gold ore bodies at perron with large resource sections grading above 10 grams/tonne Au (US$500+ per tonne rock)- these are high profit margin ounces in the ground and thus deserve a higher valuation than lower grade gold deposits. 
  • Amex can open pit mine the Denise Zone given its close proximity (50 meters to the south) of the High Grade Zone, Amex can then take in the top portion of the HGZ into an open pit design and from there ramp down to start underground mining. This offers a much lower capex path to first mining and cash flow at Perron. 
  • Grey Cat and Gratien also come right to surface and lend themselves easily to open pit mining methods. 
  • Amex has a tight share structure, strong financial backing (Eric Sprott), and a top notch management team with extensive experience both in the technical and financial aspects of the junior mining business.

Amex has a substantial opportunity to exceed market expectations with the delivery of its maiden resource estimate for Perron in Q1 of next year. I expect a steady dose of high-grade gold intersections from Perron over the coming months, with the likelihood being that the maiden resource blows away current market expectations. Amex shares could easily double from current levels over the next 12 months, whereas, I estimate downside risk to be roughly 20% with the largest risk factor largely being gold price risk.

Amex shares offer an unusually attractive asymmetric risk/reward opportunity for investors after the recent gold sector decline with 12-month upside to C$4.50 (3 million gold ounces valued at US$125 per ounce and assuming 105 million fully-diluted share count and $1.25 USD/CAD exchange rate) and downside to C$1.80 (2.4 million gold ounces valued at US$60 per ounce and assuming 105 million fully-diluted share count and $1.25 USD/CAD exchange rate).

Disclosure: Author owns shares of Amex Exploration at the time of publishing and may choose to buy or sell at any time without notice. Author has been compensated for marketing services by Amex Exploration Inc. 

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