High-Grade Gold Developer Evaluates PFS Option for 2025

• Amex Exploration is advancing its Perron gold project in Quebec on two fronts - exploration to grow resources and development to demonstrate economic viability
• A 2024 preliminary economic assessment (PEA) showed Perron could generate $224M per year in pre-tax cash flow at $2,600 gold based on current 1.6Moz resource starter project whilst building out resource
• Only 20-25% of the Perron property has been explored so far; Amex aims to make new high-grade discoveries in the 75-80% of unexplored ground
• Amex is planning a roughly 50/50 split of its remaining funds through 2025 between infill drilling to convert resources to higher confidence categories and exploration drilling to expand zones and find new deposits.
• Amex is evaluating development options to further demonstrate Perron's economic viability, such as a preliminary feasibility study (PFS), bulk sample, and permitting

Amex Exploration (TSXV:AMX) is advancing one of the most exciting high-grade gold projects in Canada. Its 100%-owned flagship Perron project in mining-friendly Quebec hosts a multi-million ounce gold deposit that is rapidly growing through aggressive exploration. 

High-Grade, Multi-Million Ounce Deposit

The Perron gold project currently hosts 1.6 million ounces across multiple high-grade zones. Critically, there is immense potential to continue growing this resource. Amex CEO Victor Cantore estimates only 20-25% of the Perron property has been explored in detail so far. The remaining 75-80% of this 4,518 hectares land package remains wide open for new discoveries.

"The focus is to find another high grade Zone. Really looking forward to making more and more new discoveries on the property. There's probably 70-80% of the property that has not seen a drill hole."

PEA Confirms Robust Economics

The Perron project's Preliminary Economic Assessment demonstrates compelling economics based on a US$2,000/oz gold price. The study outlines an operation producing an average of 101,000 ounces of gold annually over a 10-year mine life, with higher production of 124,000 ounces annually in the first five years. All-in sustaining costs are projected at US$807/oz over the life of mine, dropping to US$739/oz in the critical first five years of operation. It makes money!

The project shows robust financial metrics with an after-tax NPV(5%) of $525 million and an after-tax IRR of 40.2%. Over its life, Perron is projected to generate cumulative after-tax undiscounted net free cash flow of $767 million, with a relatively quick after-tax payback period of 1.8 years. The initial capital expenditure is estimated at $229 million, with life-of-mine sustaining capital of $238 million.

The economics are supported by strong grades, with an average diluted grade of 5.26 g/t gold over the mine life, increasing to 6.49 g/t gold in the first five years. At a production rate of 1,750 tonnes per day, this positions Perron as a high-grade, highly profitable project in the current gold price environment.

"When you look at the NPV, and again I refer everything back to the free cash flow, the free cash flow is really what's important. That shows your cost. If your costs are already low enough - and we already have some of the lowest costs in the industry, definitely in this part of the world - that's a lot of dividends that could be handing out, that's a lot of exploration money that you could be using.

Interview with CEO Victor Cantore

Aggressive Exploration Continues

While the PEA is an important milestone, Amex is not resting on its laurels. The company is embarking on an aggressive 2025 exploration campaign aimed at further growing Perron's resources.

Amex's technical team is employing cutting-edge technologies like artificial intelligence and machine learning to identify the most prospective drill targets on the remaining 75-80% of the Perron property. The company currently has two drill rigs turning on the project.

Half of Amex's 2025 drilling budget will be devoted to exploration, focused on expanding known zones and making new high-grade discoveries. The other half will involve infill drilling to upgrade the confidence of existing resources.

"The money. that's left over that has to be spent for 2025. will be to expand known zones and to make new discoveries. And at the same time, doing the infill drilling on the high grade Zone to convert it over so you could advance the project, which makes it much more attractive.

Development Studies Underway

In parallel with exploration, Amex is actively evaluating development options to further demonstrate Perron's viability and advance the project. This could involve a Preliminary Feasibility Study to improve the accuracy of the PEA and lay out a clearer path to production.

Another possibility is a bulk sample program, similar to what Osisko Mining undertook at its Windfall project in Quebec. Bulk samples provide invaluable information about grade, continuity, mining methods, and metallurgy that can significantly de-risk projects.

Amex is also starting the permitting process for Perron. While still in the early stages, proactively engaging with regulators and stakeholders can help identify and mitigate potential risks down the road.

All of these initiatives will help prove to the market that Perron can become a profitable gold mine.

It's very important that you do move in that direction, that you prove to the market that we have a viable mine here.

Major Miner Backing

Amex benefits from the backing of mid-tier gold producer Eldorado Gold, which owns a 9.9% strategic stake in the company. Eldorado's technical team meets with Amex quarterly to review the Perron project and provide advice.

Having a major miner on the share registry provides a strong vote of confidence in the project. Eldorado's expertise in developing and operating gold mines in Quebec, through its Lamaque mine, is also valuable as Amex contemplates next steps at Perron.

While Amex's current focus is on continuing to advance Perron independently, an eventual takeover by Eldorado or another gold producer is a realistic possibility if exploration and development continue successfully. Similar sized, high-grade projects like Probe Metals' Val-d'Or East are valued at over $500 million - multiples of Amex's current market capitalization.

The Investment Thesis for Amex Exploration

• Amex owns 100% of the high-grade, multi-million ounce Perron gold project in mining-friendly Quebec
• The Perron PEA demonstrates robust economics - with average production of 101koz/year at AISC of US$807/oz, generating average after-tax cash flow of $77M annually at US$2,000/oz gold.
• Exploration has only covered 20-25% of the Perron property - the remaining 75-80% is wide open for new high-grade discoveries
• Aggressive 2025 exploration program underway with 2 drills turning and AI/machine learning being used to identify new targets
• Amex is evaluating development options like a PFS, bulk sample, and permitting to further de-risk and demonstrate Perron's viability
• Mid-tier gold producer Eldorado Gold owns a 9.9% strategic stake and provides technical assistance to Amex
• High probability of an eventual takeover by a major miner at a significant premium to current market valuation if exploration and development milestones are achieved

After a year of strong performance for gold producers as the gold price rallied to multi-year highs, investor interest is starting to turn toward the undervalued gold developers and explorers. Companies that can demonstrate high-quality projects with strong economics and exploration upside in stable jurisdictions are poised to re-rate significantly higher.

Quebec is the top ranked mining jurisdiction in Canada and a top 10 global mining jurisdiction according to the Fraser Institute. Its combination of mineral potential, transparent permitting, and supportive government policy make it highly attractive for gold miners. The Abitibi Greenstone Belt that spans Ontario and Quebec has produced over 200 million ounces historically and continues to yield major new discoveries.

In this environment, Amex Exploration and its Perron project in Quebec's Abitibi region stand out. With a multi-million ounce high-grade resource already defined, Perron is one of the most attractive undeveloped gold projects in Canada. A robust PEA showing the potential for 101,000 ounces of annual production at industry-leading costs makes the economics highly compelling. And with 75-80% of the property unexplored, there is exceptional potential to further grow the deposit.

As Amex CEO Victor Cantore sums it up:

"Eventually I could see somebody coming along, but the size of the project and the viability of the project is small enough that you could go at it alone. But I believe that somebody will come along and eventually say 'okay, thank you, you went far enough?' Yeah, I believe at some point it will happen as we see the M&A happening in the industry.

With aggressive exploration and development plans in place to drive that outcome, Amex is well-positioned for a significant re-rating in future.

‍