Amarillo drills 88 m @ 1.83 g/t Au at Butiá, and 162m @ 0.70 g/t Au at Cerrito, Lavras do Sul

Vancouver, B.C., August 16, 2008 – Amarillo Gold Corp. (TSX-V: AGC) (“Amarillo” or the “Company”), is pleased to provide the following exploration update based on gold assay results from the Butiá, Cerrito and Caneleira prospects at its Lavras do Sul project in southern Brazil. The results from Butiá demonstrate a further extension of the higher grade intense alkali alteration highlighted in the two most recent new releases. The Company also wishes to summarize recent work at Cerrito, where the known mineralization was confirmed and expanded, and at Caneleira, the site of a recently discovered gold zone.

The drilling at Butiá has been focused on expanding the known mineralization as described in the news releases dated July 15th and May 14th of this year. LDH-132 was drilled on Section 5, 100 m to the south of the last reported hole on this section (LDH-129) and highlights a new area of gold mineralization south of the main Butiá zone, reporting 18m @ 3.91g/t Au. Drill holes LDH-36 and LDH-37 are located on Section 2, 150m to the east of Section 5. Both these holes encountered gold mineralization, with drill hole LDH-37 intersecting 1.84g/t Au over 88m. Intense alkaline alteration (episyenite) was noted in both holes and has now been intersected on four contiguous sections spaced 50m apart. The mineralization remains open in several directions. The company continues to drill the Butiá prospect with 2 drill rigs along 50m spaced cross section with 50m spaced holes. A summary of recent results for the Butiá prospect is given in Table 1 below; maps and sections will be posted to the Company’s website.

The results for an additional 10 drill holes from Cerrito are reported in Table 2 below. Cerrito is located approximately 7 km to the east of Butiá. Some of the better results from the 2nd round of drilling include 21 m of 1.09 g/t Au in drill hole LDH-27 and 162.35 m of 0.70 g/t Au in drill hole LDH-31. In total 3,808 metres have been drilled by Amarillo at Cerrito to date.

Drill holes LDH-26 and LDH-31 were drilled within the main Cerrito area, the orientation of some of the drill holes were changed from an azimuth of 10 degrees to 340 degrees so as to intercept perpendicular to a structure interpreted from airborne geophysics recently flown by Amarillo. The orientation of this structure is aligned with the long axis of the mapped alteration in the area and appears to be one of the main controls of mineralization. The drilling by Amarillo has revealed a gold mineralized E-W zone extending 600 m in length and up to 70 m wide and 150 m depth greater than 0.3 g/t gold, with zones greater than 1 g/t, still open mainly at depth. There are also a number of parallel gold mineralized zones that are yet to be adequately drill tested.

Drill holes LDH-32 to LDH-35 tested the NE extension of this structure as interpreted from airborne geophysics. All 4 holes hit significant widths of alteration but only one, LDH-35, returned sporadic gold mineralization.

Table 1: Recent results from Butia:

Hole No.

Total
Depth (metres)

Azimuth Dip TD

 

From
(metres)

To
(metres)

Distance
(metres)

Grade
(g/t Au)

 

 

 

 

 

 

 

 

LDH-36

125.80

16°/-60°

 

0.0

42.8

42.8

0.82

 

 

 

 

 

 

 

 

LDH-37

150.00

16°/-60°

 

32.0

120.0

88.0

1.83

 

 

 

incl.

34.0

40.0

6.0

4.94

 

 

 

 

 

 

 

 

LDH-130

210.50

12°/-60°

 

2.6

13.0

10.4

0.97

 

 

 

incl.

11.0

12.0

1.0

7.65

 

 

 

 

 

 

 

 

LDH-131

210.05

20°/-60°

 

51.5

62.5

11

1.18

 

 

 

 

 

 

 

 

LDH-132

210.82

16°/-60°

 

85

90

5

1.04

 

 

 

 

115

133

18

3.91

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. The style of mineralization appears to be disseminated with zones of higher grade which are probably somewhat structurally controlled. The drilling is exploratory and designed to cut a fence perpendicular to the most elongated direction in the alteration hosting the mineralization. The true width of the mineralization is not yet known.

Following completion of the Cerrito program the rig was moved to the Butiá prospect, 7 km to the West, to follow up on the recent success there. Based on what we are learning at Butiá and from the gold assays now received in full the Company plans to return to Cerrito where it will drill some deeper holes, especially where significant quartz veining has been noted. Our current mineralizationmodel based on petrographic analysis carried out on core from Butiá suggests that this quartz veining will signify quartz dissolution and a similar style of advanced alkali alteration to that associated with the higher grades at Butiá.

Table 2: Summary of results from the Cerrito Prospect:

Hole No.

Total
Depth
(metres)

Azimuth Dip

Zone

From
(
metres)

To
(metres)

Distance
(metres)

Grade
(g/t Au)

 

 

 

 

 

 

 

 

LDH-26

130.0

14°/-60°

 

43.0

63.0

20.0

0.33

 

 

 

 

83.0

130.0

47.0

0.57

 

 

 

incl.

102.0

120.0

18.0

1.01

 

 

 

 

 

 

 

 

LDH-27

153.15

5°/-60°

 

53.5

153.2

99.7

0.58

 

 

 

incl.

75.0

96.0

21.0

1.09

 

 

 

 

 

 

 

 

LDH-28

120.20

330°/-60°

 

6.2

13.0

6.8

0.31

 

 

 

 

39.5

42.0

2.5

1.26

 

 

 

 

53.0

66.0

13.0

0.35

 

 

 

 

79.0

85.0

6.0

0.50

 

 

 

 

 

 

 

 

LDH-29

101.1

330°/-60°

 

47.0

101.0

54.0

0.40

 

 

 

 

 

 

 

 

LDH-30

73.55

340°/-60°

 

 

0.0

12.5

12.5

0.36

 

 

 

 

40.0

71.5

31.5

0.78

 

 

 

incl.

51.0

58.0

7.0

1.42

 

 

 

 

 

 

 

 

LDH-31

184.15

321°/-60°

 

11.6

174.0

162.4

0.70

 

 

 

incl.

38.0

45.0

7.0

1.51

 

 

 

 

 

 

 

 

LDH-32

34.05

330°/-60°

 

No significant intercepts

 

 

 

 

 

 

 

 

LDH-33

192.4

330°/-60°

 

No significant intercepts

 

 

 

 

 

 

 

 

LDH-34

262.5

330°/-60°

 

No significant intercepts

 

 

 

 

 

 

 

 

LDH-35

117.55

150°/-60°

 

4.0

8.0

4.0

0.35

 

 

 

 

12.0

14.0

2.0

0.58

 

 

 

 

 

 

 

 

 

Notes: As per table 1.

The reader is referred to the Company website www.amarillogold.com for plans and sections further detailing Lavras results.

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.

You may view maps and other information at the Lavras do Sul project page.

ON BEHALF OF THE BOARD OF DIRECTORS

AMARILLO GOLD CORP.

Per:
Buddy Doyle, President

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