Amarillo receives initial resource estimate for the Butia prospect: 215,000 oz in 6.39MT @ 1.05g/t Gold indicated, and 308,000 oz in 12.88MT @ 0.74g/t Gold inferred , using 0.3g/t cut-off, Lavras do Sul, Brazil

Amarillo Gold Corp. (TSX-V: AGC) (“Amarillo” or the “Company”) is pleased to announce that it has received the initial  estimate of the gold resource at the Butia prospect, which is part of the Company’s Lavras do Sul project, located approximately 320km WSW of city of Porto Alegre, in the state of Rio Grande do Sul. Tables 1 to 3 list the estimate at different gold grade cut-offs, 0.3 g/t, 0.5 g/t and 1.0 g/t respectively.

 

Table 1.  Butia Prospect resource estimate using 0.3g/t gold cut-off.*

Cut-off Category Tonnes Grade Contained Gold Oz
0.3g/t Indicated 6,390,000 1.05 215,000
  Inferred 12,880,000 0.74 308,000

 

Table 2.  Butia Prospect resource estimate using 0.5g/t gold cut-off.

Cut-off Category Tonnes Grade Contained Gold Oz
0.5g/t Indicated 5,300,000 1.18 201,000
  Inferred 6,840,000 1.07 235,000

Table 3. Butia Prospect resource estimate using a 1.0g/t gold cut-off.

 

Cut-off Category Tonnes Grade Contained Gold Oz
1.0g/t Indicated 2,240,000 1.78 128,000
  Inferred 2,440,000 1.71 134,000

 

The estimate is 43-101 compliant, supplied by Atticus and Associates ("Atticus") of Lima, Peru. The qualified person for the report is Antony Amberg, a consulting geologist with 25 years experience, a Chartered Geologist and a Fellow of the Geological Society of London, and registered as a competent person for the calculation of mineral resources and reserves by the Chilean Mining Commission.

Atticus based the resource modelling on 11,056.37 meters of drilling (45 holes up to LDH 155) completed by Amarillo between 1996 and March 2010 on sections with 50 meter spacing at the Butia prospect and also on 891.5m of historic drilling by Rio Tinto PLC. The current drill spacing is sufficient to delineate the episyenite core of the prospect but is not sufficient to model the high grade structures that extend out into the perthitic granite from the central core. Infill drilling will enable the higher grade structures to be modelled and then included in the resource estimate.

The gold mineralization zone at Butia as defined by the current drilling is associated with intense alkali alteration that forms an episyenite microbreccia. The gold mineralization forms an "L" shape at surface controlled by an E-W structure 250m long and a N-S structure 250m long. The mineralization, which outcrops at surface, attains its greatest extent at a depth of 70m-90m.

Atticus constructed 3D models for lithology with 5 domains, using the Leapfrog software, which was then ported into Surpac. The drill hole data was composited to 2.5 meters. The basic statistics and variograms were created for each domain. Experimental variograms were calculated on Gaussian transformed values and back-transformed as the variograms from ordinary kriging were noisy and not amenable to interpretation. The ordinary kriging search ellipsoid radii and orientations were therefore defined from the back-transformed Guassian variogram analysis.  To prevent smearing of the higher grade by the krig outside the main area of mineralization (episyenite), the high grade samples in the perthitic granite were cut to 10 g/t for the resource estimation. Atticus also commented that if further drilling showed continuity in the high grade zones that the average grade will trend upwards.

Amarillo has completed another 10 holes (totalling 2448m), in the Butia area, since the estimate was made, mainly peripheral to the area where this resource estimate. The results will be reported in the near future when final assays arrive. Amarillo plans to return the drill to the Butia area to target the high grade zones, after drilling at Cerrito and some of the other prospects.

Buddy Doyle, President and CEO of Amarillo said, "We are encouraged by this initial resource estimate on Butia.  The Lavras do Sul project is comprised of a land package measuring approximately 10,000 Ha on which 17 historical diggings, according to government records, are known to exist.  Butia is the first of these areas to be subject to a resource estimation exercise. The drill is currently at the Cerrito prospect, 5km to the east, and it is expected a resource will be defined there as well.  In addition to the areas of known diggings, the intrusive over which the land package extends appears highly prospective, with much of it laying under cover or deep weathered soils and therefore under-explored.  

The addition of this gold resource at Butia increases the resource base of Amarillo by 35% in the indicated category and by 68% in the inferred category."

This press release was authored by Buddy Doyle (B. App. Sc.), a member of the AusIMM, with 28 years experience and a qualified person in compliance with National Instrument 43-101. It was reviewed by Atticus and is released with their input and approval. The technical report describing the resource estimate in detail will be posted on our website and on Sedar within the next 45 days.

ABOUT AMARILLO:
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 contains 623,000 ounces indicated from 11.9MTonnes @ 1.62 g/t Au and 451,000 ounces inferred from 10.1MTonnes @ 1.38 g/t Au at a 0.5g/t cut-off grade, 43-101 compliant resource as independently determined by AEFS.  The project is in the economic evaluation stage.  The Posse deposit was successfully mined by WMC during the 1990’s (mined areas are excluded from the above resource figures) and is located in an area of excellent infrastructure. It is located some 35 km NE of Yamana’s Chapada open pit Cu-Au operation, 105 km NE of Serra Grande’s underground Au mine, 105 km NNW of Anglo American’s nickel laterite project (in construction), 95 km NW of Votarintim’s Niquelandia nickel laterite mine and approximately 60 kms NE of Yamana’s Pilar Au project (in feasibility). Grid power to the site was established during the previous open pit mining operation and the Serra da Mesa hydro-electric dam lies 35 km to the east.  
The Lavras do Sul project is in the advanced exploration stage with over 16,000m of drilling with encouraging gold mineralization being discovered and defined, also in an area of excellent infrastructure.  The company has commissioned an initial resource estimate at the Butia prospect, and it was reported to contain 215,000 ounces of indicated from 6.4MT @ 1.05 g/t Au and 308,000 ounces of inferred from 12.9MT @ 0.74 g/t Au at a 0.3 g/t cut-off. 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.

ON BEHALF OF THE BOARD OF DIRECTORS

AMARILLO GOLD CORP.
    

Per:      “Buddy Doyle”                       

          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. Readers should review risk factors applicable to junior mining exploration companies generally to understand the variety of risks that can affect the Company.