September PEA Underscores Amex Exploration’s High-Grade Gold Advantage and Capital-Efficient Development Path

• Amex Exploration's Champagne Zone contains 831,000 ounces of measured and indicated gold resources grading 16.2 grams per ton, delivering extraordinary economics with a pre-tax payback period of just 2.5 months / after-tax payback period of 5 months at current gold prices.
• The project benefits from proximity to established infrastructure in Quebec, including hydroelectric power, local workforce, and nearby communities, eliminating the need for expensive mining camps and reducing both capital requirements and operational risks.
• Management has structured a capital-efficient approach beginning with toll milling operations requiring only $146 million in initial capital - partially offset with pre-production revenues of CAD$68.6 million, followed by self-funded construction of an on-site processing facility by 2031-2032.
• The company has attracted significant backing from established mining investors, with Eldorado Gold increasing its stake from 9% to 17% and Eric Sprott maintaining approximately 10.5% ownership, demonstrating market confidence in the development strategy.
• Beyond the immediate production plans, Amex has expanded its land package from 45.6 to 197 square kilometers with significant exploration potential, supporting a 17.5-year mine life with opportunities for resource expansion and mine life extension.

The gold mining sector has witnessed numerous companies struggle with the transition from exploration to production, often facing capital constraints, permitting delays, and operational challenges that can derail promising projects. Amex Exploration Inc. presents a compelling case study in how strategic positioning and exceptional resource quality can create a clear pathway to production while minimising traditional mining development risks.

Under the leadership of President and CEO Victor Cantore, Amex has fundamentally repositioned itself from a pure exploration play to what management describes as a near-term producer. This strategic evolution comes at a particularly opportune time, with gold prices reaching historical highs and investor appetite for precious metals exposure remaining robust.

The Champagne Zone: A World-Class Asset Foundation

The cornerstone of Amex's production strategy centers on the Champagne Zone, a high-grade gold deposit that stands out in an industry where ore grades have been declining globally for decades. With 831,000 ounces in measured and indicated resources grading 16.2 g/t, the deposit represents a rare combination of size and quality that forms the basis for economically robust mining operations.

The significance of this grade cannot be overstated in the current mining environment. While many modern gold operations work with grades below 2 g/t, Amex's Champagne Zone offers ore that is more than eight times richer. This fundamental advantage translates directly into superior project economics and provides substantial buffer against commodity price volatility and operational challenges.

Cantore emphasises the strategic importance of this resource quality:

"What's really nice about it now is that we've showed that there's enough measured and indicated that we don't need to do any more definition drilling for Phase One. There's enough in the measured indicated to go forward with a feasibility study."

Infrastructure Advantages and Operational Efficiency

Beyond the exceptional ore grade, Amex benefits from what Cantore describes as an almost ideal mining location. The project sits approximately 8 kilometers from the town of Normétal, Quebec, providing access to established infrastructure while maintaining appropriate distance from residential areas. This proximity offers several competitive advantages that differentiate Amex from many other development-stage mining companies.

The availability of hydroelectric power from the same grid that supplies the Kidd Creek operations provides reliable, cost-effective energy access. Access to an established workforce eliminates the need for expensive fly-in, fly-out operations or construction of worker accommodation facilities. Local workers can return home daily, with those from nearby Lassar facing only a 23-minute commute.

"The ones who live in Normétal can go home for lunch. The ones that are in Lassar, which is about 23 minutes away, they can go back home. So they can go back home, young engineers, young geologists, they can go back home with their families at night time. They don't need to do the 14 in, 14 out," Cantore explained.

Interview with President & CEO Victor Cantore

Phased Development Strategy Minimizes Capital Requirements

Amex's development approach represents a departure from traditional large-scale mining development models. Rather than pursuing a single, capital-intensive construction phase, management has structured a multi-phase approach designed to minimise upfront capital requirements while generating early cash flows to self-fund subsequent expansion.

The initial phase involves toll milling arrangements, where Amex will extract ore from the Champagne Zone and process it at existing third-party facilities. This approach eliminates the need for immediate mill construction, tailings management facilities, and associated permitting complexities. The company projects a total initial capital requirement of $146 million for Phase One, a relatively modest figure in the context of modern mining developments.

The toll milling phase is designed to operate for four years, generating sufficient cash flow to self-fund construction of an on-site processing facility. This second phase, targeted for completion by 2031-2032, will bring full operational control and potentially higher margins through integrated processing.

Regulatory and Permitting Pathway

Quebec's mining-friendly regulatory environment provides Amex with a relatively predictable permitting pathway. The company's toll milling approach significantly simplifies the initial permitting process, as it eliminates many of the complex environmental assessments required for mill construction and tailings management.

Management expects the feasibility study to be completed within six months, faster than typical timelines due to the simplified scope focusing solely on extraction and toll processing arrangements. Environmental permitting is anticipated to require approximately two years, consistent with Quebec's established regulatory framework.

"I'm sure some eyebrows are raising now saying, "How are you going to do a feasibility study in six months? It's crazy." But it's not. It's because it's for toll milling only. So you're not building a mill. There's no open pits to permit. There's no tailings management facility to permit," Cantore explains.

The company plans to begin bulk sampling operations, which will serve dual purposes of providing additional technical data while generating initial revenues. The bulk sample portal and decline will be constructed to production specifications, effectively beginning mine development while conducting technical studies.

Financial Position and Market Support

Amex has successfully completed recent financing activities, demonstrating continued market confidence in the development strategy. The company has attracted notable institutional support, with Eldorado Gold increasing its position from 9% to 17% ownership, and Eric Sprott maintaining approximately 10.5% ownership.

This institutional backing provides validation of the technical and economic merits of the project while ensuring adequate financial resources for development activities. The presence of established mining companies and respected resource investors in the shareholder base also provides strategic value through potential operational partnerships or technical expertise.

Exploration Upside and Resource Expansion

While transitioning toward production, Amex has not abandoned its exploration activities. The company has significantly expanded its land position from 45.6 square kilometers to 197 square kilometers, providing substantial potential for resource expansion and mine life extension.

Current reserves support a 17.5-year mine life based on the preliminary economic assessment, with the strongest production scheduled for the first 10 years. However, management remains confident in the potential for additional discoveries within the expanded land package, particularly given the open nature of current mineralised zones both along strike and at depth.

The exploration potential extends beyond the Quebec properties, with similar geological signatures identified on adjacent Ontario lands that warrant investigation. This regional approach could potentially unlock additional value and extend the overall project timeline well beyond current estimates.

Market Positioning in Current Gold Environment

Amex's development timeline aligns favourably with current gold market dynamics. With production targeted for 2028, the company is positioned to enter the market during what many analysts expect to be a continued strong pricing environment for precious metals. The combination of high-grade ore and favourable market conditions could generate substantial cash flows during the critical early production years.

The company's relatively modest capital requirements and rapid payback economics provide significant downside protection even in scenarios of gold price volatility. The 2.5-month pre-tax payback period indicates that initial capital could be recovered quickly, reducing long-term commodity price risk.

The Investment Thesis for Amex Exploration

• Exceptional Economics: Project with sub-six-month payback periods at current commodity prices, indicating robust project economics with significant margin of safety
• Infrastructure Advantage: With access to established power, skilled labor, and transportation networks, Amex leverages existing infrastructure to reduce upfront capital costs and minimize operational risks.
• Phased Development: The company is pursuing a staged development strategy, including the potential for toll milling and phased build-outs. This enables early cash flow generation, which can be reinvested to fund expansion and growth.
• Resource Quality Over Quantity: Amex focuses on advancing high-grade gold deposits—greater than 10 g/t—ensuring operational flexibility, low costs, and superior margins compared to bulk-tonnage alternatives.
• Strategic Shareholders: Amex benefits from the involvement of established mining investors and partners, whose technical expertise and market presence provide both validation and strategic support.
• Regulatory Clarity: Operating in established mining jurisdictions with predictable permitting timelines and supportive government policies allows Amex to advance its projects with greater confidence and reduced risk.
• Exploration Upside: The company’s near-term development projects also carry significant exploration potential, extending mine life and creating further value beyond the initial resource base
• Capital Efficiency: Amex prioritizes disciplined capital allocation, advancing projects with modest funding requirements relative to their resource size and revenue potential. This minimizes shareholder dilution while maximizing long-term returns.
• Market Timing: The company’s development pipeline is aligned with favorable commodity price environments and capital market conditions, positioning Amex to capture upside in strong gold cycles.

Macro Gold Thematic Analysis

The current gold market environment reflects a confluence of monetary policy uncertainty, geopolitical tensions, and portfolio diversification demands that continue to support precious metals allocation across institutional and retail investors. Central bank gold purchases reached record levels in recent years, while persistent inflation concerns and currency debasement fears drive continued investment demand.

Supply constraints in the gold mining sector have become increasingly apparent, with major discoveries declining and ore grades continuing their long-term downward trend. This supply-demand imbalance creates particular value for high-grade development projects that can deliver production growth in a supply-constrained environment.

Amex Exploration's Cantore observes,

"If somebody were to put a bunch of geologists and a couple of mining engineers together and tell them, build, design me where you want to mine, this would be one of those where they would design it."

This encapsulates the rare combination of factors that create optimal mining development opportunities in the current environment. The geographic concentration of gold production in politically unstable regions has heightened focus on mining developments in stable jurisdictions. Quebec's established mining framework and supportive policies position Canadian gold developers favorably relative to projects in higher-risk jurisdictions.

The electrification and energy transition megatrends have created competing demands for mining capital and technical resources, potentially extending development timelines for traditional mining projects. Companies with streamlined development approaches and existing infrastructure access gain competitive advantages in securing necessary resources and expertise.

TL;DR

Amex Exploration offers investors a rare combination of world-class gold grades (16.2 g/t), exceptional economics (2.5-month payback), and strategic infrastructure advantages in Quebec. With $146M initial capital requirements, strong institutional backing from Eldorado Gold and Eric Sprott, and a clear pathway to 2028 production through toll milling, the company represents a compelling near-term producer opportunity. The expanded 197 km² land package provides significant exploration upside beyond the 17.5-year mine life, positioning Amex as a unique development-stage investment with both immediate cash flow potential and long-term growth prospects.

Frequently Asked Questions (FAQs) AI-Generated

Q: What makes Amex's gold grades exceptional compared to other mining operations?

‍A: Amex's Champagne Zone grades 16.2 grams per ton, more than eight times richer than typical modern gold operations that work with grades below 2 g/t. This exceptional grade translates directly into superior economics with a 2.5-month pre-tax payback period and provides substantial buffer against commodity price volatility.

Q: How does the toll milling strategy reduce development risks and capital requirements?

‍A: Toll milling eliminates the need for immediate mill construction, tailings management facilities, and associated complex permitting processes. This reduces initial capital requirements to $146 million and allows the feasibility study to be completed in six months rather than typical longer timelines. The approach generates early cash flows that self-fund subsequent on-site facility construction.

Q: What infrastructure advantages does the Quebec location provide?

‍A: The project sits 8 kilometers from Normétal, Quebec, providing access to hydroelectric power from the same grid supplying Kidd Creek operations, established local workforce, and existing transportation infrastructure. Workers can return home daily, eliminating expensive fly-in, fly-out operations and mining camp construction costs.

Q: When is Amex expected to begin production and what are the key development milestones?

‍A: Production is targeted for 2028 following a clear development pathway: feasibility study completion within six months, two-year environmental permitting process, bulk sampling operations beginning shortly, and production-size portal and decline construction by end of 2026 or early 2027. The on-site processing facility is planned for completion by 2031-2032.

Q: What validation does institutional investor backing provide?

‍A: Eldorado Gold has nearly doubled its stake from 9% to 17%, while Eric Sprott maintains 10.5% ownership. This backing from established mining industry participants provides both financial resources and strategic validation of the project's technical and economic merits, demonstrating market confidence in management's development strategy.