AMERIX PRECIOUS METAL ANALYSIS
Amerix Precious Metals Corporation, based in Toronto, Canada, is a mineral exploration and development company, that is focused on gold projects in the Tapajos Region in Brazil. The Company is currently carrying out an exploration program on its 100%-owned Limão gold property where a high-grade gold deposit has been established at a historical past-producing open pit. The Company recently sold its interest in the Ouro Roxo project to a Brazil consortium but retains a 2.5% Gross Royalty on gold production from the project, with production expected to commence by Q3/2010.The Company expects to receive 18,750 oz of gold(2.5% royalty of 750,000 told oz), from the Ouro Roxo project over the next 12 to 15 years. This should yield about $3,125,000 per year with an average gold price of $2000 per oz. The first payment is expected as soon as the project commences production and reach fully production payment in the 3-4th year.
The Limão Project is located in the central-northeast portion of the Tapajós Gold Province approximately 180 kilometres south of the city of Itaituba (pop. 70,000) and 30 kilometres east-north-east of the oldest and most important prospecting community in the region Cuiu-Cuiu. Access to the property is exclusively by air from Itaituba. The Limão property has great potential to become a significant gold project with high-grade historic intercepts, including 47 g/t gold over 13 metres. Early in 2010, the Company announced the review of a confirmation of high-grade gold potential on the Limão property. The confirmation was rendered by an independent geologist – Clinton Davis. Mr. Davis confirmed the historical data taken from eleven samples on Limão, indicating 2.37 grams per tonne gold to 106.6 per tonne gold. The average grade of the samples was 38.5 grams per tonne gold (1.22 oz per tonne gold). Historical drill results in the 1990s identified two high-grade bedrock intercepts, 13 m @ 47 g/t gold; and 6.8 m @ 18.7 g/t gold. Mineralization at the Limão project is similar to that of Malartic and McDermott Gold deposits in Quebec; West Timmins in Ontario; the
Cripple Creek project in Colorado; and Rattlesnake Hills in Wyoming. Successful development of this project will significantly change its intrinsic value, which should have a beneficial effect on the Company’s stock price. The Limão and Ouro Roxo projects are located in the mining-friendly Tapajos Region of Brazil, which is one of the largest under-developed alluvial gold areas in the world. The region is estimated to have produced between 20 and 30 million oz of gold over the past 20 years.
Management has demonstrated the ability to survive the credit-constrained period when low commodity prices and the weak global economy drove investors’ interest away from risky assets, especially high-risk junior mining companies. Management also possesses expertise in resource exploration and development and the ability to develop a long-term relationship with the partners like the Brazilian consortium who are financially stronger to take on the development of the Ouro Roxo project. Going forward, it is expected that Amerix will continue to seek a strategic partnership to develop the Limão property. With only 156,023,652 fully diluted shares outstanding as of December 31st 2010 and a low financial burn rate of about $43,000 per month (slightly more for future Ouro Roxo development) and the cash flow from the Limão Project for the next 12-15 years the company is in good shape to further expand at the beginning of this massive gold bull market. With it's current dirt cheap price, it is one of the few juniors that has the potential to be a real 10 to 20 bagger with little effort and at this current low price it has no down side risk.
