Amex Exploration has ten drills turning at Perron project

Amex Exploration (TSXV: AMX; US-OTC: AMXEF) is on track to complete the remaining 148,000 metres of its 300,000 metre fully funded drill program in 2021 at its Perron project, 110 km north of Rouyn-Noranda in Quebec.

The junior explorer has identified three gold zones along strike on the Perron gold corridor and has drilled to vertical depths of 1 km on the Chicobi Belt. It is also undertaking regional exploration over more than 15 km of prospective faults and plans to drill an average of 10,000 metres a month at a cost of about $150 per metre.

“Right now we’ve got one of the biggest programs of a junior in Canada with ten drills on site,” Kelly Malcolm, Amex’s VP of Exploration said in an interview, adding that the company plans to complete a resource estimate on all three zones towards the end of 2021 or early in 2022. “I can’t think of any other junior company that has more drills on site. It’s definitely one of the most active projects across the board and for the juniors we’re probably the top dog.”

Of the project’s three main zones – Eastern Gold, Grey Cat and Gratien – the Eastern Gold zone is the most prospective and contains several parallel mineralized zones including the Denise Zone and a high-grade zone, both of which are open in all directions, along strike, and at depth.

Since discovering the Eastern Gold zone in December 2017, over sixty drillholes have intersected gold mineralization grading greater than 10 grams gold per tonne over variable widths. The mineralization has been traced over 350 metres laterally from near-surface to over 1.1 km vertically.

Highlights released in December from the high-grade portion of the Eastern Gold Zone included 10.55 metres of 20.88 grams gold per tonne starting from 603 metres in drillhole PE-0-217, including 1.5 metres of 145 grams gold per tonne. Drillhole PE-20-197 returned 6.65 metres of 5.89 grams gold starting from 1,094 metres, including 0.60 metres of 31.68 grams gold.

In the core shack at Amex Exploration’s Perron gold project in July 2020. From left: Mining analyst George Topping from Industrial Alliance; Amex VP Exploration Kelly Malcolm; and Gregg Huffman of Canaccord Genuity. (Photo credit: Amex Exploration.)

The high-grade zone is continuous and homogenous over the entire vertical extent, which is rare in high-grade gold deposits, Malcolm noted.

“The major driver is the Eastern Gold zone and the high-grade zone in particular, which is a very deep, very rich structure, down to 1.1 km vertical now,” he said. “It’s not just the high-grade intercepts but also the continuity of the gold within that system that is pretty special … You can see how continuous it is and the consistency of the mineralization is something that is special and rare.”

Other notable results from the high-grade zone have been 25.04 grams gold over 3.86 metres in drillhole PE-20-187 starting from 1,187.75 metres downhole;  29.44 grams gold over 8.5 metres starting at 500 metres depth in PE-20-137; and 30.98 grams gold over 8.5 metres starting from about 150 metres in drillhole PE-19-45.

“It’s very continuous and oftentimes gets better as you go deeper and it’s really common for classical high-grade Abitibi-Red Lake systems,” he said. “In the Kirkland Lake region you see mines going down greater than 2 km vertically. At the Red Lake mine and in the Red Lake mining district as a whole, there are a number of mines that go down deep. Some structures go down to 3 km and have increasing grade at depth. … We know that this area can produce very significant deep deposits and our drilling is proving that currently.”

The Perron project is just 15 km from the past-producing Normetal mine, where mineralization stretched from surface down to over 2.4 km vertically. NorMetal was in production from the 1930s through to the late 1970s. “Normetal showed us that the area can produce very deep ore deposits. … It was a very rich VMS deposit with a gold component as well.”

The Eastern Gold Zone includes the Denise Zone, which sits roughly 50 metres to the south of the high-grade zone, and is a broad zone of disseminated gold hosted by a brecciated rhyolite. The Denise Zone offers the potential to mine the Eastern Gold zone in open pit and underground scenarios, the company said.

Highlights from the Denise Zone, released in early December, included 81.50 metres of 1.51 grams gold starting from 190 metres downhole in PE-20-199, including 4.50 metres of 6.79 grams gold. Drillhole PE-20-195 returned 8.25 metres of 2.59 grams gold starting from 337 metres, including 1 metre of 14.32 grams gold. Drillhole PE-20-204 cut 187 metres of 0.66 gram gold from 180 metres, including 10 metres of 3.51 grams gold. Other notable intercepts from Denise: 9.36 grams gold over 39.55 metres from 225 metres depth in PE-20-192; 1.07 grams gold over 189.4 metres from 300 meters depth in drillhole PE-20-188; and 1.01 grams gold over 100 metres in PE-20-56 from 120 metres downhole.

Results from the other two zones, Gratien and Grey Cat, have also been encouraging, Malcom said. At Gratien, drillhole PEG-19-89 intersected 16.48 grams gold over 14.60 metres from 193 metres downhole, and at Grey Cat, drillhole PEG-19-80 cut 3.42 grams gold over 26.90 metres from 243 metres downhole.

Amex first optioned the Perron property from Falconbridge in 1996 when the junior was still known as Coleraine Resources. In 2013 Amex drilled a discovery hole into the Central Polymetallic Zone, and due to the property’s similarities to the Laronde mine, Agnico Eagle Mines (TSX: AEM; NYSE: AEM) optioned the project. Shortly after Agnico returned the project to Amex in June 2017, the company identified the Eastern Gold zone in December of that year.

Since Amex’s gold discovery on the Chicobi belt, which traditionally has been thought to be a base metals belt, other juniors and some mid-tiers and majors have started exploration in the area, including Sumitomo Metal Mining Canada, which has optioned the Chicobi project from Kenorland Minerals. Other projects in the district include Starr Peak Exploration’s (TSXV: STE; US-OTC: STRPF) Newmetal project, which includes the historic NorMetal mine; Generic Gold’s (CNSX: GGC; US-OTC: GGCPF) Belvais project; Vanstar Mining Resources’ (TSXV: VSR) Felix project, and Bmex Gold’s (TSXV: BMEX) King Tut project.

The team at Amex is optimistic that regional exploration on the 45 sq. km property will identify new gold zones, while drilling between its three known gold zones will also bear fruit. “We’ve got something sizeable and very rich on our hands and we think Perron still has a lot of ounces to discover and to be developed.”

The company has about $39 million in the bank and around $13 million in-the-money warrants that come due throughout 2021.

“We have plenty of capital, more than sufficient to cover our drill program to the end of 2021,” Malcolm said.

Major shareholders in the company include Eric Sprott (~15%); Commodity Capital (~8%); management (~13%); Quebec institutions (~4%); and other institutions (~25%).

Over the last year, Amex has traded at between 86¢ and $3.98 per share and at presstime in Toronto was changing hands at $3.18 per share. The junior has about 83 million common shares outstanding for a market cap of about $263 million.