One of the bright spots in Monday's sea of red in the gold miners was Amex Exploration (TSX-V:AMX, OTC:AMXEF). Amex delivered an impressive drill intersection into a copper rich VMS discovery at its Perron Project in Quebec, Canada. Hole PEX-21-076, intersected a disseminated, semi-massive- to massive-sulphide zone that returned a 7.8 meter intersection grading 2.40% copper, 0.72% zinc, 0.27 g/t gold and 22.15 g/t silver.
On a copper-equivalent basis this intersection grades nearly 3% Cu-Eq - this is a very high-grade intersection over significant width.
It's important to note that Agnico Eagle once optioned the Perron Project for its VMS potential and then never fully carried out exploration on the property during the bear market years of 2013-2015, eventually giving Perron back to Amex.
Since discovering the Eastern Gold Zone (EGZ) in 2018, Amex has been focused on Perron's gold mineralization potential. Amex's drilling at Perron has delivered incredible gold intercepts and the company is well on its way to outlining a 2,000,000+ ounce gold resource. However, the VMS potential of the project has always existed and earlier this year Amex management decided it was worth re-evaluating historical data in order to define the best drill targets available.
A new interpretation of an area with strong hydrothermal alteration that extends to 750 meters vertical, a lateral extent of roughly 200 meters, with a 75 degree plunge to the east has led to the discovery of what is now called the QF Zone:
Amex Chairman Jacques Trottier, PHD stated:
"During my academic career I have evaluated VMS deposits around the world, including the Normétal mine next door, and I am very excited by what I am seeing here at Perron. VMS deposits are one of the richest sources of copper, lead and zinc globally and often produce economic amounts of gold and silver as by-products. In addition to the discovery hole, we have core from a follow-up drill hole PEX-21-083, located about 70 metres deeper, which is at the lab for assay and which shares the same visual characteristics and core length as discovery hole PEX-21-076.
Should this discovery lead to the development of a deposit it has the potential to be a company maker on its own. We are obviously very excited by this opportunity for Amex. Our VMS discovery is 100% accretive to the high-grade gold zones which we are currently drilling off at Perron and provides our shareholders and investors with exposure to highly sought-after copper-rich base metal discoveries."
Amex is devoting a drill rig to the QF Zone and will begin defining this zone of mineralization within the next week. The potential is for a 200 meter strike length system that extends to 750-1,000 meters depth with a mineralized width of roughly 8 meters. If we assume this zone has an average grade of 2.5% copper-equivalent it is not difficult to come up with more than 100 million copper-equivalent pounds.
This offers Amex shareholders a free carry on copper in an already attractively valued multi-million ounce gold deposit. Finally, it is important to understand that VMS deposits tend to occur in clusters - Perron's close proximity to the historic Normétal Mine that produced 10.1 million tonnes @ 2.15% Cu, 5.12% Zn, 0.55 g/t Au and 45.25 g/t Ag means that Perron is highly prospective for the discovery of additional VMS deposits.
From a technical chart standpoint AMX shares have held an area of important support near $2.20 and yesterday's strong 11% rally has led to a test of an important trendline that has capped rallies thus far in 2021:
The technical setup in AMX is clearly defined with support at ~$2.20 and the potential for an upside breakout above the $2.60 level potentially signaling a major trend change after a ~50% correction during the last 7+ months.
Disclosure: Author owns shares of Amex Exploration at the time of publishing and may choose to buy or sell at any time without notice. Author has been compensated for marketing services by Amex Exploration Inc.
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