AM Gold : Closes Private Placement and Announces Corporate Update with Respect to Red Mountain Security

News

AM Gold Closes Private Placement and Announces Corporate Update with Respect to Red Mountain Security

May 2, 2016

AM GOLD INC. (TSX-V: AMG; Frankfurt: AMX) ('AM Gold' or the 'Company') announces, further to its news releases of March 16, 2016 and April 5, 2016, that it has closed the private placement (the 'Offering').

The Offering consisted of 478,750 flow-through common shares of the Company (the 'FT Shares') priced at $0.08 per FT Share and 854,583 non-flow-through common shares of the Company (the 'NFT Shares' and together with the FT Shares, the 'Securities') priced at $0.08 per NFT Share, for aggregate gross proceeds of $106,666.64. The Securities were made available by way of prospectus exemptions in Canada and in such other jurisdictions as the Company has agreed where the Securities can be issued on a private placement basis, exempt any prospectus, registration or other similar requirements.

The Company paid no finder's fees in connection with the Offering. All Securities issued in connection with the Offering are subject to a statutory hold period expiring on September 3, 2016. Eight placees participated in the Offering including John Fiorino, the Chief Executive Officer of the Company. Mr. Fiorino purchased 310,000 FT Shares.

The participation by the Company's Chief Executive Officer, John Fiorino, constituted a 'related party transaction' under Multilateral Instrument 61-101 - Protection Minority Security Holders in Special Transactions ('MI 61-101'). However, the Company is exempt from both the formal valuation and the minority shareholder approval requirements of MI 61-101 in connection with the Offering because neither the fair market value of the Securities issued, nor the consideration for the Securities, exceeds 25% of the Company's market capitalization as calculated in accordance with MI 61-101.

Proceeds from the Offering will be used to fund the continued exploration of the Red Mountain gold project in Yukon Territory, Canada, and to repay, in part, the secured loan on the Red Mountain gold project (the 'Secured Loan'). With respect to the Secured Loan, the Company expects to repay the lender at least $40,000 towards the principal. In connection with the payment, the Company is also seeking an extension to the Secured Loan. There can be no assurances that the Company will be able to secure a further extension to the Secured Loan as proposed or at all. For further details on the Secured Loan see the Company's news releases dated January 22, 2015, March 15, 2016 and April 19, 2016 (copies of which are available under the Company's SEDAR profile at www.sedar.com).

About AM Gold

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.

More information on AM Gold is available at www.amgold.ca.

ON BEHALF OF AM GOLD INC.

'John Fiorino'

___________________

John Fiorino
Chief Executive Officer

AM GOLD INC.

For further information on AM Gold, please contact Murray Caruth at 1-604-646-0067 or by email at [e-mail], or visit AM Gold's website at:http://www.amgold.ca.

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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.