Amarillo Gold Announces Brokered Financing to Raise $2,000,000

Amarillo Gold Corp. (TSX-V: AGC) (“Amarillo” or the “Company”) is pleased to announce it has appointed Pollitt & Co. Inc. (the “Agent”) to act as agent, on a best-efforts basis, for a private placement (the “Private Placement”) to raise gross proceeds of up to $2 million by issuing 6,250,000 common shares of the Company at a price of $0.32 per share.

The Company intends to use the net proceeds of the Private Placement for general working capital purposes and further development of the Mara Rosa Project, including: 

  • Update pre-feasibility study (the “PFS”)
  • Tailings engineering
  • Related activities in preparation for a bankable feasibility study (the “BFS”)

The securities issued pursuant to the Private Placement will be subject to a four-month hold period under applicable Canadian securities laws.

In consideration for their services, the Agent will receive a cash commission equal to 6% of the gross proceeds from the sale of the common shares. Pollitt & Co. Inc will also receive Broker Warrants that equal 6% of the number of shares issued in this financing. The broker Warrants will be exercisable at the same price of the financing for a period of 24 months starting from the date of the closing.

This news release is intended for distribution in Canada only and is not intended for distribution to United States newswire services or dissemination in the United States. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the Units, Common Shares or Warrants (the “Securities”) in the United States or to, or for the account or benefit of, any U.S. person.  The Securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any securities laws of any state of the United States and may not be offered or sold within the United States or to, or for the account or benefit of, any U.S. person unless an exemption from such registration requirements is available. “United States” and “U.S. person” are as defined in Regulation S under the U.S. Securities Act.

About Amarillo Gold Corp.

Amarillo Gold Corp. is focused on acquisition, discovery, and definition of gold resources in Brazil.  The Company’s principal projects are the Mara Rosa Project in the state of Goias, and the Lavras do Sul Project in the state of Rio Grande do Sul.  The Posse Deposit at Mara Rosa contains 1,174,900 ounces of measured and indicated gold contained in 20.85 MT at 1.75 g/t Au, and 156,400 ounces of gold inferred from 3.63 MT at 1.38 g/t Au (0.5 g/t cut-off grade) (NI 43-101 compliant resource as independently determined by Australian Exploration Field Services Pty. AEFS).  The Mara Rosa Gold Project has received a positive economic assessment from a Pre-feasibility study and is preparing to proceed to a bankable feasibility study. 
The Posse Deposit was successfully mined by Western Mining Company (WMC) during the 1990s (mined areas are excluded from the above-stated resource figures), and is located in an area of excellent infrastructure: approximately 35 km NE of Yamana’s Chapada open pit Cu-Au operation, some 80 km NE of Yamana’s Pilar Au project (in Feasibility), 95 km NW of Votarintim’s Niquelandia Ni laterite mine, 105 km from NE of Serra Grande’s underground Au mine, and 105 km NNW of Anglo American’s Ni laterite project at Barro Alto.

The Lavras do Sul Project is an advanced exploration stage property (190 sq. km.) comprising more than 19 prospects centred on historic gold workings, with encouraging gold mineralization discovered and defined by more than 16,000 metres of drilling.  The initial resource estimate at the Butia prospect reported 215,000 ounces of gold indicated from 6.4 MT at 1.05 g/t Au, and 308,000 ounces of gold inferred from 12.9 MT at 0.74 g/t Au using a0.3 g/t cut-off grade in a NI 43-101 compliant resource as independently determined by Atticus Consulting 2010.  Lavras do Sul is also located near excellent infrastructure.  The Company also has a portfolio of earlier stage projects and all properties under Amarillo’s management are located in areas of good infrastructure and mining-friendly communities.

Frank Baker, a metallurgist with over 30 years’ experience and also a member of the AUSIMM and IOM3 is the qualified person for this news release as per the guidelines of the NI-43-101. 

ON BEHALF OF THE BOARD OF DIRECTORS

AMARILLO GOLD CORP.
     
Buddy Doyle, President & CEO

Contacts:
Amarillo Gold Corp.
+1-604-760-0325 (Canada)
+55-31-3261-5974 (Brazil)
Or Scott Eldridge
+1-604-722-5381
scott@amarillogold.com

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. 

FORWARD LOOKING STATEMENTS: -

This news release contains Forward Looking Statements regarding our intentions and plans. Forward looking statements in this news release include that we will raise proceeds of up to $2,000,000 in a private placement, that we will receive regulatory approval, and that our projects have potential for commercialization. Various factors may prevent or delay our plans, including but not limited to, the company being unable to raise funds from investors, our being unable to obtain the consent of the TSX Venture Exchange to the private placement, 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. Permission from the Government and community is also required to proceed with future mining production. Readers should review risk factors applicable to junior mining exploration companies generally to understand the variety of risks that can affect the Company. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements whether as a result of new information or future events or otherwise, except as may be required by law.