Amarillo drills 120m @ 3.52 g/t Au at Butiá, Lavras do Sul, on 2nd step-out section

Vancouver, B.C., July 15th, 2008 – Amarillo Gold Corp. (TSX-V: AGC) (“Amarillo” or the “Company”), is pleased to report on gold assay results from the next four holes from its Butiá prospect at its Lavras do Sul project in southern Brazil. Drill holes LDH-127, 128 and 129 are the first 3 of 6 drill holes from the next step-out cross section, 50 metres to the west of the drill results reported in our May 14th news release. The drill holes are collared 50 metres apart along this section and drilled at an azimuth of 10° and at a dip of -60°. LDH-126 is the last hole drilled along the section that was reported on May 14th.

Highlighted is drill hole LDH-128 which ran 120 metres at 3.52 g/t from 87 metres and includes 57 metres at 6.95 g/t from 123 metres. Drill hole LDH-127 ran 58 metres at 0.93g/t. Details of gold assay results for drill holes LDH-126 through to LDH-129 are summarized in table 1 below.

As drilling progresses the Company’s geologists are refining their understanding of the deposit. In the May 14th news release the Company reported that a syenite zone seemed to be controlling the better gold grades. Petrographic studies, commissioned by the Company, now suggest this “episyenite” is an alteration product, the result of intense alkaline alteration of the perthitic granite host rock such that most of the quartz is removed, leaving feldspathic microbreccia. The company is describing this alteration as Intense Alkali Metasomatism. Later, as these fluids dissolved more and more quartz, they became oversaturated and began re-depositing silica as comb textured quartz veins with abundant fluid inclusions. These textures suggest a low temperature epithermal environment. There is much left to understand; for example, at what stage in the fluid evolution does the gold mineralization occur? It appears the higher grades occur with quartz saturation and sulphide generation, but there may be multiple events and some intense alteration zones have better gold grades than others.

These results show the higher grade zone at Butiá continuing through three sections. The section principally reported on here, BU-05, is the westernmost section drilled to date, and is located in close proximity to the edge of the intrusive. As a result, it was thought that this would be the last section worked in this direction. However, the encouraging results from BU-05 mandate another section be drilled, if only to close the higher grade zones off. To the east, section BUT-02 was tested in the mid-80’s by a former operator with a single drill hole. However, this hole was fairly shallow, drilled to the south and would have missed the projection of the higher grade zones. This area is being tested now and the core is revealing similar rocks as those that carried in the drill intersections reported below.

The drilling at the Butiá deposit had been designed to provide adequate information to commission an independent 43-101 resource assessment of this prospect prior to year end. The recent success on the prospect, however, has resulted in more work than originally planned. The Company now has one rig on the prospect and a second is expected shortly.

Table 1: Assay results from Butiá 2nd round of step-out drilling
From (m) To (m) Width (m) Grade Au (g/t)

  From (m) To (m) Width (m) Grade Au (g/t)
LDH-126 139.5 246 106.5 0.53
         
LDH-127 34 50 16.0 2.16
including 34 35 1.0 30.00
  61 88 27.0 0.41
  104 162 58.0 0.93
         
LDH-128 17.5 30 12.5 1.57
including 26 27 1.0 8.49
  50 71 21.0 2.19
including 52 55 3.0 11.43
  87 207 120.0 3.52
including 123 180 57.0 6.94
         
LDH-129   NSA    

Notes: All drill hole samples shown here consist of split HTW diamond drill core. The samples were sent to Acme Laboratories in Goiania, Brazil, and Vancouver, Canada. Gold is determined using fire assay using 50g aliquots with an ICP finish; if the grade is higher than 10 ppm a gravimetric method is used. All samples are subject to a chain of custody and are submitted with standards and blanks to check the assay results. The laboratories also use internal standards and repeat analysis. For the results reported in this release all the standards, blanks and repeats delivered acceptable results. Intercepts were calculated using a minimum of a 0.3 g/t cut off at the beginning and end of the intercept and allowing for no more than 10 consecutive metres of less than 0.3 g/t Au.. There were 34 gold assays > 5 g/t Au in the reported assays for LDH -128, and these are being repeated by Screen Fire Assay. While this technique may give different results for particular samples, our experience is that the overall intersections will remain little changed.

Please also note that the interval 172.0m to 180.0m in LDH128 contained 2 very high gold assays of 48.9 and 126.0 g/t Au respectively.

The Lavras granite complex hosts numerous areas of historic diggings and small mine workings that were the subject of sporadic gold rushes from the 1870’s through to the 1930’s. Gold mineralization had been drill confirmed in the 1980’s at Cerrito and Butiá, where it was found to be hosted in structurally controlled alteration zones with sericite and pyrite, +/- sheeted quartz veins. None of the other areas of workings and alteration, (which number greater than 12), have ever been drill tested prior to Amarillo optioning the project in 2006. Amarillo’s strategy has been to systematically surface map these areas and follow-up, where warranted, with a drill program.

Amarillo Gold Corp. is a company focused on the acquisition, definition and discovery of gold resources in Brazil. Its principal projects are the Mara Rosa project in the state of Goiás and the Lavras do Sul project in the State of Rio Grande do Sul. The Posse Deposit at Mara Rosa was found by an independent 43-101 compliant preliminary economic assessment study carried out by CCIC to contain 643,000 ounces indicated @ 1.48 g/t Au and 538,000 ounces inferred @ 1.26 g/t Au. The Company also has a portfolio of earlier stage projects. All properties under Amarillo’s management are located in areas of good infrastructure and robust community support.

The Qualified Person for this news release is Buddy Doyle as per the guidelines laid out in the NI 43-101.

This news release contains Forward Looking Statements regarding our intentions and plans. Various factors may prevent or delay our plans, including but not limited to, contractor availability and performance, weather, access, mineral prices and success and failure of the exploration and development carried out at various stages of the program. Readers should review risk factors applicable to junior mining exploration companies generally to understand the variety of risks that can affect the Company.

ON BEHALF OF THE BOARD OF DIRECTORS AMARILLO GOLD CORP.

Buddy Doyle, President

TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.