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Amarillo Gold Receives Further Positive Metallurgical Results at the Mara Rosa Gold Project Achieving 92.9% Gold Recovery

Amarillo Gold Corp. (TSX-V: AGC) (“Amarillo” or the “Company”) is pleased to announce that further positive results have been received from the ongoing metallurgical work being conducted as part of the feasibility study underway on the Posse gold deposit at the Mara Rosa project in Goias State, Brazil.

The Posse gold ore contains a small amount of tellurium which exerts a refractory impact on a subordinate portion of the gold mineralisation unless the telluride is oxidised before cyanidation processing takes place. The Posse deposit was mined in the early 1990’s by Western Mining Ltd. which extracted 380,000t of sulphide ore at an average grade of 2.4 g/t and an average gold recovery of 84%. Western Mining utilised a CIL plant incorporating a pre-cyanide aeration stage using compressed air and an ore grind of 75 microns.

Building on the plant process used by Western Mining, metallurgical test work for the Pre-Feasibility Study (“PFS”, completed Q4 2011 by Coffey International), identified an efficient and cost-effective process route which achieved considerably higher recoveries, (93%), than the circuit used by Western Mining. This significantly higher gold recovery was achieved by using a finer grind, high pH, and oxygen  instead of compressed air in the aeration process.

This most recent testwork, which is being reported in this news release, achieved a gold recovery of 92.9% from a larger scale plant style process which emulates the metallurgical route proposed for the Posse deposit.

The process route developed during the PFS involved grinding to a P80 of 45 microns, pre-oxidation with oxygen for 12 hours at a pH of 12, followed by a standard cyanide leaching cycle of 24 hours, which achieved an average recovery of 93% (92% was used in the PFS). This work was conducted by ALS Ammtec, in Perth, Australia, and comprised bench scale tests whereby the oxygen was delivered into the agitated pulp via a small tube during the pre-oxidation stage.

The current work used a fresh composite sample weighing 36kg which consisted of mineralized intervals from 17 drill holes chosen as best representing the average bulk of the Posse deposit. The sample was pulped and placed in a tank agitated with traditional impellers. Oxygen was injected into the agitated pulp using a Hyperjet which is being considered as one of the more likely methods of introducing the oxygen in the Posse process plant. This process achieved an overall recovery of 92.9% of gold into solution (with a mass balance producing a built-up headgrade of 1.68 g/t) and which compares well with previous PFS work and thus reinforces the confidence of the metallurgical team that an economic and efficient method of extracting the gold has been engineered

Further metallurgical testing continues at Posse as part of the feasibility process including:

  • Dispatching representative samples to other laboratories with specific instructions to follow the chosen process route in order to check for inter-lab variability and ability to replicate the process.
  • Variability testing

This work is being done in conjunction with Coffey International Mining.

Amarillo has also commissioned geotechnical studies, and a new resource estimate from the Posse deposit, with results expected prior to year-end.

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

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. Should this continue to be positive it would be possible to commence mining by 2014.

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 a 0.3 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.

ON BEHALF OF THE BOARD OF DIRECTOR
AMARILLO GOLD CORP.

Buddy Doyle, President

Contacts

Amarillo Gold Corp.
+ 1-604-689-1799 (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. 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. The company has not made any studies towards determining if the gold mineralisation at the Butia prospect can be economically exploited at this stage. The prospect is still in the advance exploration stage.  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.