Amarillo Commissions Metallurgical Testing at Posse

Vancouver, B.C., – Amarillo Gold Corp. (TSX-V: AGC) (“Amarillo” or the “Company”) is pleased to announce that Testwork Desenvolvimento de Processo Ltda (“Testwork”) has been contracted to carry out a comprehensive metallurgical testing program on approximately 200 kilograms of core samples from the Posse gold resource at the Mara Rosa project in  Goias State, central Brazil. The Posse deposit has a 43-101 compliant resource of 643,000 indicated and 538,000 inferred gold ounces *.

Testwork’s facilities are located in Nova Lima about one hour’s drive from Amarillo’s Brazil office in the city of Belo Horizonte. The company’s previous clients include Anglogold Ashanti’s Cuiaba mine, Serra Grande’s (AGA-Kinross JV) Crixas mine and ASX listed Mundo Minerals’ Engenho mine.

The objective of the metallurgical test program is to determine the optimum process design flow for a possible future mining operation at Posse. Processes being investigated include gravity concentration of the free gold and gold bearing sulphides, cyanide leaching, and flotation tests. A milling curve for each process will determine gold recovery rates versus grinding parameters. Crushability tests, Work Index and environmental testing (acid mine drainage, leaching and solubility) will also be carried out.

A particular focus of the Testwork program is to determine gold recovery rates from lower grade material (0.5 to 1.5 g/t) at Posse. The 80% recovery factor used in the Company’s Preliminary Economic Assessment (PEA) in 2008 is based on the reported 84% recovery from previous mining at Posse in the 1990’s, when the average head grade was >2 g/t. However, there is very little operational data on which to estimate recoveries from the lower grade portion of the current 43-101 Posse resource. Nevertheless, results from recently completed preliminary metallurgical tests are encouraging.

Prior to the commissioning of Testwork, Amarillo contracted FUNMINERAL – the Goias State mining entity – to carry out preliminary cyanide leaching tests on several Posse core pulp samples at their metallurgical laboratory and pilot plant located in the city of Goiania. The lab enjoys a solid reputation with companies such as Yamana Resources and Votorintim Metals using its services.
The FUNMINERAL cyanide leaching tests were carried out using drill core obtained from the Company’s two previous diamond drill campaigns at Mara Rosa and applying standard bottle roll testing procedures. Four composite sample batches were prepared from samples taken from 18 drill holes with batch grades of 0.60, 0.76, 1.09 and 1.39 grams/tonne Au. The core had been previously pulped by Acme Labs in Goiania so that >90% of the sample passed through a sieve size of 75 microns, finer than the 105 micron size reported from previous mining at Posse  but not atypical for modern CIL circuits.

The results of the FUNMINERAL tests, detailed in Table 1, indicate an average gold recovery of 83% from 13 samples submitted for cyanidization testing.  These tests are only preliminary and will require confirmation, or be superseded, by the more definitive testing procedures to be executed by Testwork. Notwithstanding these limitations, the Company is pleased that gold recoveries from the individual batches do not appear to vary significantly with grade and are generally similar to overall recoveries from previous mining at Posse.

Testwork expects the metallurgical program to be completed by the first quarter of 2010. The results will form an integral part of a pre-feasibility study on the Posse deposit.

Table 1: Results of bottle cyanidization tests on Posse drill core composites



%  Au Recovery Avg head grade and recoveries
Group 1 higher grade 1.47 78.91 1.39
Group 1 higher grade 1.39 82.01
Group 1 higher grade 1.31 87.02 83%
Group 2 med. Grade 1.17 68.38 1.09
Group 2 med. Grade 1.07 78.50
Group 2 med. Grade 1.12 80.36
Group 2 repeat 0.99 90.91 80%
Group 3 low grade 0.69 86.96 0.76
Group 3 low grade 0.75 88.00
Group 3 low grade 0.83 89.16 88%
Group 4 cut-off grade 0.53 83.02 0.60
Group 4 cut-off grade 0.59 84.75
Group 4 cut-off grade 0.69 86.96 85%

*An independent 43-101 compliant resource calculation delivered by Caracle Creek International Consultants in March 2008 determined that the Posse deposit contains an indicated resource of  13.5MT @ 1.48 g/t Au, or 643,000 ounces plus an inferred resource of 13MT @ 1.36 g/t Au or 538,000 ounces. The deposit 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.

This press release was reviewed by Buddy Doyle (B. App. Sc.), a member of AusIMM and a qualified person in compliance with National Instrument 43-101.

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


Per:        “Buddy Doyle”
Buddy Doyle, President