The Company holds four tenement applications for ground in Maytown and Laura, Queensland, areas that have historically and currently been renowned for gold production.
The ground held by the Company, measuring over 1000 square kilometers, has had some previous exploration carried out and deposits have been identified. The Company believes there exists the potential for epithermal gold mineralisation and intends to carry out a strategic exploration program to endeavour to define an economic resource.
The Maytown Project and Maytown North Project areas are located approximately 150km and 175km north-west of Cairns respectively. The tenements cover a total area of approximately 1,000 square kilometres in Palmer River Goldfield of far North Queensland.
The Palmer River Goldfield is one of the richest alluvial gold fields ever discovered in Queensland with records indicating total production of between 1-2 Million ounces of gold from 1878.
Further information can be found in Section 8, Independent Geologist's Report in teh Company Prospectus.
Uses
Gold is used in a wide range of industrial applications, with jewelry being the most common. Other applications include electronics, for printed circuitry and electrical devices, dentistry as fillings and tooth restoration, glass manufacturing, aerospace, medicine, the arts, porcelain dinnerware, decorations in architecture, medallions, coins, and gold bars purchased as investments.
Gold has long held a place in financial markets as a reserve currency and an inflation hedge. The proportion of reserves held as gold by Central Banks varies markedly between countries. The USA currently holds just less than 80% of its foreign reserves as gold.
Market demand and outlook
Gold has long been regarded as a basic store of value to which the market looks in times of high uncertainty and a weak US dollar. Some market participants see gold as a proxy currency with its own ‘value', frequently having an inverse relationship to the value of the US dollar.
Demand for Gold may swing from jewellery to investment oriented consumption according to the market forces in play. Over the past four years, the demand for gold was dominated by the jewellery markets, however as gold prices increased into the high US$900 levels, physical demand for major markets reduced markedly, with marked reduction in consumption by the traditional Indian jewellery markets.
The response of the gold market to the global economic crisis was impacted by both changes to the gold price and perception of risk. The immediate response to the crisis was for an increased off-take of physical gold, but with a much higher proportion being directed to net retail investment and to Exchange Traded Funds (ETF) and similar funds.
In line with a number of forecasters, the Director's believe that with negative US interest rates and a relatively weak US dollar, the macroeconomic environment is supportive of gold, and that gold may provide an attractive potential development option in AMMG's suite of projects.
The Director's note forecasts that the prospects of a weaker US dollar from 2010 onwards will keep gold moving higher in 2010.
Maytown Geology & Tenement Map