Amarillo Gold Provides New Resource Model, increases Measured Resource by 53% @ 2.00 g/t Au. Mara Rosa Project, Brazil

Amarillo Gold Corp. (TSX-V: AGC) (“Amarillo”) is pleased to announce that it has received a new resource model for the Posse deposit, Mara Rosa project, Goias, Brazil. Keith Whitehouse, the principal of Australian Exploration Field Services Ltd, (“AEFS”) calculated the new resource estimate at a 0.5 g/t cutoff as listed below in Table 1. Table 2 lists the previous estimate (2011), also at a 0.5 g/t cutoff. A positive Preliminary Feasibility Study (“PFS”, Jan 2012), was based on the 2011 resource. This gave reasonable expectations the deposit could be economically mined using an open pit based on a $US1100 per ounce gold price. Since this time, the resource has improved (reported here), as has the gold price. Exchange rates are more favorable, and the company has recently obtained the LP (Preliminary License, conditional acceptance of the project by the state environmental authority, see NR dated May 9th).

Highlights include:

  • -    Measured resource has increased by over 50%. 
  • -    The proportion of the (M+I) category which has moved to a Measured resource increases confidence in the model. 
  • -    The Posse deposit remains open to depth and along strike.
  • -    Inferred resource has increased 84% over the 2011 estimate.
  • -    The new resource will be used to update the PFS

Table 1: AEFS July 2016 Resource Estimate*:

Category

Volume m3

Tonnes

Grade g/t

Ounces

Measured

3,162,000

8,568,000

2.00

551,100

Indicated

4,966,000

13,458,000

1.52

659,000

Total M & I

  8,128,000

22,026,000

1.71

1,210,100

Inferred

2,627,000

7,119,000

1.26

287,700

Category

Volume m3

Tonnes

Grade g/t

Ounces

Measured

3,162,000

8,568,000

2.00

551,100

Indicated

4,966,000

13,458,000

1.52

659,000

Total M & I

  8,128,000

22,026,000

1.71

1,210,100

Inferred

2,627,000

7,119,000

1.26

287,700

 

*Note: Reported mineral resources are not reserves and do not have demonstrated economic viability. 

 

Table 2: AEFS September 2011 Resource Estimate* 

Category

Volume

Tonnes

Grade g/t

Ounces

Measured

2,001,000

5,463,000

2.04

358,300

Indicated

5,638,000

15,393,000

1.65

816,600

Total M & I

7,639,000

20,856,000

1.75

1,174,900

Inferred

1,330,000

3,630,000

1.34

156,400

The new resource estimate includes 34 new holes the main source of the changes from the 2011 estimate. Nineteen of these holes were drilled between the north and south parts of the Posse deposit where the previously optimized pit shape (calculated at US$1100 Au) produced a hump in the pit floor. This hump which was predominantly classified as Inferred resource is now largely moved to the Measured or Indicated resource category. As well new drill holes to the north of the deposit have added to the Inferred tonnes and ounces.

Buddy Doyle CEO and President comments, “The new Resource model for the Posse deposit at our flagship Mara Rosa project allows the Company to proceed in updating its Pre-feasibility study. The new block model will form the basis of this study. Tenders have already been received by various independent engineering firms and the Company will award the tender prior to month end. We are particularly pleased with the amount of Measured resource in the new model suggesting a more robust, better defined, lower risk deposit. Potential remains to expand the resource as it remains open at depth and along strike”

Keith Whitehouse reported that together with the new holes, the new model benefited from a reworked wireframe model that for the first time includes a known barren thin basalt dyke that crosses the deposit. The new model is improved by including the corrected trajectories of twenty eight (28) holes, where downhole survey data is now available from post-drilling down-hole geophysical surveys. The same geophysical surveys also provided numerous (>1,000,000) in-situ density measurements which were used to confirm and refine density values. The deposit continues to be divided into three ore domains. These are designated HW (Hanging Wall), Main and FW (Footwall) based on position, grade and geology. Variography to support Kriging was carried out for each domain resulting in a more rigorous resource classification.

The Resource was estimated using Multiple Indicator Kriging (MIK) and Micromine software with 1m composites in each ore domain. MIK is often used in highly skewed populations where the co-efficient of variance is above 0.5, with mixed population distributions. Such conditions are typically found in shear hosted gold ore bodies as is the case at Posse. The MIK method is non-parametric and uses the data itself to condition the high grade tails. The final resource was categorized into Measured, Indicated and Inferred categories based on source data density and distance from data sources. 

Keith Whitehouse is the independent Qualified Person (QP) for this resource statement with over thirty years experience, he is a Member of the AusIMM and Certified Professional (Geology). He has reviewed and approved the content of this News Release. The 43-101 technical report will be delivered and filed on SEDAR within the next 40 days. 

The Qualified person for the Company is Frank Baker, a metallurgist with over 30 years experience, he is a member of the AusIMM and IOM3.

About Amarillo Gold Corp.

Amarillo Gold Corp. is focused on acquisition, discovery, and definition of gold resources in Brazil. It is the Company’s policy to strive to do this in a sustainable, safe way using best practices whilst benefiting our shareholders and the communities we work in. 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 8.568MT @ 2.00 g/t Au Measured, 13.458MT @1.52 g/t Au Indicated and 7.119MT @ 1.26 g/t Au Inferred. (A NI 43-101 resource as independently determined by Australian Exploration Field Services Pty. Keith Whitehouse QP July 2016).  The Mara Rosa Gold Project has received a positive economic assessment from a Pre-Feasibility study and Amarillo has obtained the LP, the first stage of a three stage permitting process. The Posse Deposit was successfully mined by Western Mining Corporation (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 Votorantim’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 of more than 19 prospects centered on historic gold workings, with encouraging gold mineralization discovered and defined by more than 16,000 meters 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 a 0.3 g/t cut-off grade in a NI 43-101 resource as independently determined by Atticus Consulting in 2010, Anthony Amberg, QP. 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.

 

ON BEHALF OF THE BOARD OF DIRECTORS

 

AMARILLO GOLD CORP.

     

Per:        “Buddy Doyle”    

Buddy Doyle, President

 

Investor Inquiries, contact:

Scott Eldridge, CFO

+ 1-604-722-5381 (Canada)

+55-31-3261-5974 (Brazil)

info@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 plans to move ahead with the work required to obtain the LI. Various factors may prevent or delay our plans, including but not limited to, the ability to raise funds, 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. We may not be able to fulfill our obligations under the proposed gold loan and we may be unable to raise sufficient financing to carry out our plans. 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.