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AM Gold approves shareholder rights plan

AM Gold (CVE:AMG) announced Tuesday its board has approved a shareholder rights plan to protect itself in the event of a take-over bid.

The rights plan provides the company's shareholders with an adequate amount of time to properly evaluate and assess a take-over bid, without being faced with undue pressure or coercion, the company said.

The plan also provides AM Gold's board with more time to explore other offers, so as to maximize shareholder value.

Specifically, a bid permitted by the rights plan, that is, one that meets the criteria that AM Gold has set to protect the interests of shareholders, will remain open for 60 days.

If a take-over offer is made for the company that does not meet AM Gold's criteria, shareholders will be entitled to purchase additional shares of the company at a discounted price.

The shareholder rights plan has already been approved by the TSX Venture Exchange, and is awaiting shareholder approval at the next annual general meeting, slated for September 15.

The plan is not in response to any formal take-over proposal, the company said.

The Vancouver, B.C.-based company is developing its gold-copper projects in the Yukon, Canada and in Peru, while building a portfolio of pipeline projects in North and South America.

In other news, AMĀ  announced late last week that it has contracted Yukon-based Kluane Drilling to provide two diamond drill core rigs for the company's 2011 drill program at its Red Mountain property in the Yukon.

The first drill rig began drilling hole ICE11040 on the eastern portion of the resource at the begining of June. To date, approximately 6,000 metres of core have been drilled in 17 holes. Am Gold said it expects to complete a total of 7,500 metres to 8,000 metres by September.

The company also entered into an agreement with Geotech to conduct a helicopter-borne VTEM geophysical survey of the entire Red Mountain property.

A total of 679 line kiolometres are planned to be flown in the late-August early-September time frame, AM Gold said.