AM Gold Announces Regulatory Approval for the Pinaya Option and Joint Venture Agreement Along With a Message from the CEO

AM Gold Inc. (TSX VENTURE:AMG)(FRANKFURT:AMX) ("AM Gold" or the "Company") is
pleased to announce that it has received final approval from the TSX Venture
Exchange for the Pinaya option and joint venture agreement (the "Option and JV
Agreement") with Rokmaster Resources Corp. ("Rokmaster") (particulars of the
Option and JV Agreement were announced on July 17, 2012). The Company also
reports that it has received the first option payment from Rokmaster, being a
cash payment of $400,000, along with a payment of US$67,800 representing a
reimbursement of recent property claim fees paid by the Company for the Pinaya
gold-copper project.


Message from the CEO 

Since my appointment as CEO in September 2010, AM Gold has focused on advancing
its Pinaya gold-copper project (Caylloma and Lampa Provinces, Peru) as well as
seeking out other exploration opportunities of merit. One of the opportunities
we advanced was the Company's Red Mountain property (Yukon Territory, Canada).
We aggressively advanced the Red Mountain property through the drill bit taking
the project from a grassroots prospect to a property of merit with an inferred
resource estimate, 127 million tonnes grading 0.48 g/t gold, approximately 1.95
million ounces of contained gold using a cut-off grade of 0.3 g/t Au, in only
two seasons (see the Company's news release of March 8, 2012 for full details of
the inferred resource estimate). The foregoing inferred resource was achieved
with a modest exploration budget of approximately $5,500,000 in the 2010/11
season. 


At the Pinaya gold-copper project, we established community relations, surface
rights, and obtained a drill permit in the second quarter of 2011. In addition,
we advanced the measured and indicated resource estimate along with the inferred
resource estimate (see the Company's news release of June 6, 2011 for full
details on the measured and indicated resource estimate and the inferred
resource estimate). We also focussed on geophysics and to that end we completed
a ZTEM geophysics program on the entire 19,200 parcel as well as a geochemical
program consisting of over 6,000 sample over key target areas on the southern
portion of the land parcel (see the Company's news release of May 10, 2012). 


The use of the ZTEM survey and the geochemical program delineated four primary
target zones adjacent to the existing resource area, with a total of seven high
priority targets identified on the southern one third of the Pinaya gold-copper
project land concession. The current resource estimate for Pinaya remains open
in three directions and at depth. The ZTEM geophysical data suggests high
resistivity within an area both underlying the existing resource area and
expansive laterally, spanning an area of interest 3km in length and up to 4km in
width. This anomaly may be suggestive of a large porphyry body under cover. A
geophysical anomaly of this scope has major implications for the potential size
of the geological/geophysical target. This exploration target is now measured in
multiples of cubic kilometers of rock. 


Overall exploration expenditure at the Pinaya gold-copper project by AM Gold for
the 2011 exploration program was a conservative $1.23 million. 


As summarized above, AM Gold recently entered into the Option and JV Agreement
with Rokmaster and the Company has now received final regulatory approval for
the agreement. The decision to enter into the Option and JV Agreement was made
after careful consideration in an effort to not only advance the Pinaya
gold-copper project but also to free up capital to advance the Red Mountain
property. Specifically, the optioning of the Pinaya gold-copper project
streamlined our assets and allows us (1) to focus on our Red Mountain project
(2) and to benefit in any future success of the Pinaya gold-copper project
through the Company's retained interest. 


From the outset, execution of the Company's business plan has been dependent on
access to capital. Consistent with our business plan, to date, a significant
amount of the technical analyses, evaluation, planning and preparatory work
relating to optimization of our exploration projects has been implemented. The
programs are ready for implementation of additional exploration and require
additional capital in order to advance them. For the Pinaya gold-copper project
we expect that the property will be advanced under the Option and JV Agreement.
For the Red Mountain property we will seek capital to advance the exploration by
all available means including monetizing the Company's two grass roots projects
in Peru. 


Current economic conditions have eroded investor confidence, creating liquidity
concerns for many companies and creating an extremely challenging environment
for capital raising activities. Traditional equity capital, particularly for
small companies, has been severely curtailed. In such times, companies must
evaluate their options and also their long-term goals. We have undertaken a
re-evaluation of our properties and as summarized above our current focus is the
Red Mountain property. In short, given the current economic conditions the
Company simply did not have the capital to advance both the Pinaya gold-copper
project and the Red Mountain property. After significant discussion it was
decided that the optioning of the Pinaya gold-copper project would be less
dilutive to the shareholders rather than raising money for both projects at a
share price at or near a one year low. 


We have also taken various actions to reduce the Company's burn rate. The most
significant reduction in burn rate resulted from optioning the Pinaya
gold-copper project as the costs related to the Company's activities in Peru are
expected to be significantly reduced. Case in point, the Company's burn rate in
Peru for the year ended December 31, 2011 was approximately $650,000 and the
costs going forward are expected to be under $150,000 per year.  


Management and the Board will continue to work to seek all reasonable means of
advancing our projects and to create shareholder value. At AM Gold we look
forward to the continuation of exploration and development of both current and
new properties for the building of shareholder value. We would like to take this
opportunity to thank the shareholders for their continued interest and support. 


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
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 property consists of approximately 3,600 hectares of contiguous quartz
claims. 52 of such quartz claims (1,168 hectares) are held 80% by the Company
with an option to acquire 100% ownership and are subject to a net smelter
returns royalty and 131 quartz claims (2,430 hectares) are held 100% by the
Company. 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 and joint venture 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: [phone]). 


Dr. Stewart Jackson, P. Geol., P. Geo, a director of the Company, and a
Qualified Person (within the meaning of National Instrument 43-101), has
reviewed and approved the technical disclosure contained in this news release.


ON BEHALF OF AM GOLD INC.,

John Fiorino, Chief Executive Officer

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.