Amarillo's Exploration Strategy On The Mara Rosa Gold Property, Goias State Brazil

TORONTO, ONTARIO--(CCNMatthews - Aug. 25, 2005) - Amarillo Gold Corporation ("Amarillo") (NEX BOARD:AGC.H) is pleased to announce that it is commencing work on the Mara Rosa property. To this effect Amarillo has obtained the services of the consulting group, South American Management ("SAMSA"), to review the historic resource on the Mara Rosa property, and has let a minimum 1000m drilling contract to Blackhawk Drilling to drill test the priority targets generated by this work.

The Mara Rosa property (area 24,600ha) is located near the village of Mara Rosa, in the Goias state of Brazil, about 3 hrs by vehicle north of Goiania, the state capital. Contained within this property is the Posse deposit where previous workers defined a historic gold resource. Exploration potential on the surrounding ground held by Amarillo is also considered good, containing previously uninvestigated artesianal workings and untested geochemical and geophysical anomalies.

SAMSA is a multinational independent geological and mining consulting group based in Santiago, Chile. Their task is to review the upper 100m of the Posse deposit with regard to a possible economic, open pit opportunity. Amarillo management have also instructed SAMSA to look at the potential extensions of any higher grade zones and then recommend optimum drill hole locations for testing the continuity of these zones.

Once this "high grade" open pittable review is completed SAMSA will review the historic resource at the Posse deposit and bring it to 43-101 standards.

The Mara Rosa Project, is the subject of an independent technical report (the "Technical Report") prepared by B. Terrence Hennessey, of Micon International Limited, in December, 2003. The Technical Report was prepared in accordance with National Instrument 43-101 and can be viewed on the SEDAR website (www.sedar.com). The report reviews the property and mineralization, but review the historic resource was outside its scope.

In 1997, Metallica Brazil estimated a mineral resource for the Posse south lode within the Mara Rosa Project which was not compliant with National Instrument 43-101, section 2.4 since it was prepared prior to the implementation of this National Instrument. This historical estimate was made after re-logging approximately 8,100m of core and remapping exposures in the pit. Shallow reverse circulation and blast holes from the pit were also used. The estimate was preformed using ordinary krieging and a 10.0 g/t top cut and was reported at a 1.0g/t Au cut off grade, down to 300m below surface. The resulting Posse mineral resource estimation is presented in the table below. Metallica Brazil did not state which reporting code they used, but they did say that it followed "industry standards" at the time.

Category
(Non 43-101 Compliant)

Tonnes
(Thousands)

Grade
(Au,g/t)

Contained Gold
(ounces)

Measured

6,385

1.81

372,300

Indicated

4,948

1.67

265,700

Inferred

1,417

1.94

88,500

TOTALS

12,750

1.77

725,643

The above estimates, while prepared prior to the implementation of NI 43-101, are considered worthy of mention since they were compiled by an independent consultant, Pedro Gusman of PGV Consultores in Chile, who was also contracted by Barrick Minerals in 1996-97 while carrying out their due diligence on the property. In this instance a similar resource estimate of 15.47 million tonnes @ 1.47 g/t containing 730,342 ozs of gold using a 1 g/t cutoff was reported. The similarity of Barrick's due diligence estimate and the estimate by Metallica Brasil suggests that there is a noteworthy gold accumulation on the Property.

The Barrick and Metallica Brazil historic resource estimates were to 400m depth. Amarillo has requested a study of the top 100m as the upper part of the deposit will be key if any economic exploitation is to occur. SAMSA have been instructed not to cut the assays to 10g/t in the upper zone and to review the possibility of continuous zones of relatively higher grades than the globe grade estimate of the historic reserve at shallow depths. SAMSA will recommend drill holes to check for continuity and improve the confidence of resource estimates if this work determines it is warranted.

One example of a continuous zone of higher grade gold values occurs along sections 100,100m to 100,350m (local grid, 250m in length) at about 40 to 70m below surface in a relatively flat zone about 50m wide as shown by the selected assays from drill holes in this zone in the historic database.

Table 2 Examples of Higher grade historic assays

Section

Drill Hole

From

To

Assay

10,100m

W-012

50m

58m

8m @ 2.7g/t
MRD-002 54m 60m 6m @ 4.15g/t
MRD-004 47.3m 51.87m 5.14m @ 9.15g/t
10,150m MRD-001 56m 73m 17m @ 5.73 g/t
W-22 59m 79m 20m @ 4.02 g/t
MRC-039+ 61.95m 73m 11m @ 7.29 g/t
10,250m F008 63m 74.8m 11.8m @ 3.42 g/t
MRD-345+ 67.77m 80.82m 13.91m @ 15.79 g/t
MRD-028 37.5m 55.05m 17.55m @ 5.05 g/t
W-003 43m 54m 11m @ 7.29 g/t
10,350m MRD-005 39.4m 46m 6.6m @ 4.52 g/t
W-006 31m 36m 5m @ 2.56 g/t

As well as defining and enhancing by drill testing possible open pittable zones within the known mineralization, Amarillo would also like to grow the project by exploration success.

The main focus of the exploration work will be to enhance the economics of the property by:

1. Testing a greater than 0.2g/t soil anomaly that extends 10km north of the Posse deposit. This anomaly is coincides with the trace of the same geological structure as the Posse deposit and has only been previously tested with four drill holes. Amarillo considers that there is good potential for further gold mineralisation along this structure/anomaly.

2. Approximately 150 to 200m to the South East of the Posse Gold deposit there is an untested gold in soil anomaly. The cause of this anomaly has never been satisfactorily explained. Previous drilling targeting the Posse mineralization where angled from the Northwest and drill towards the SE to best intersect the Northwesterly dipping structure hosting the deposit. Some of this drilling targeted this soil anomaly by drilling further past the Posse structure assuming that it represented a parallel structure to that hosting the gold anomaly. However, this drill was unsuccessful. If this postulated structure had a steeper, or opposite plunge then this drilling would have missed the target. Amarillo proposes to test this concept by deploying geophysics and drilling.