Vancouver, B.C., October 9, 2007 – Amarillo Gold Corp. (TSX-V: AGC) (“Amarillo” or the “Company”), has signed heads of agreement with Horizonte Minerals plc regarding a 1,000 hectare block bordered to the east, west and south by Amarillo landholdings at Mara Rosa, Brazil.
The Horizonte ground lies to the south of the Posse gold deposit, along the same structural trend. Initial reconnaissance exploration work performed by Horizonte included stream and soil geochemical sampling, and defined a series of gold anomalies which will now be evaluated by Amarillo.
The Horizonte agreement provides that Amarillo can earn a 60% interest by expending US$400,000 on exploration over the next three years. Subsequent to the earn-in, a 60:40 joint venture agreement would govern the development of any major gold discoveries. In addition, Horizonte will receive a one time cash payment of US$30,000 for data acquisition.
The Horizonte agreement underscores Amarillo’s commitment to the Mara Rosa project. The Company is currently completing a preliminary scoping study on the economics of the Posse deposit, through Caracle Creek International Consulting Inc. (“CCIC”), and has commenced metallurgical testing with Metago, a state run metallurgical laboratory in Gioania. Exploration has been continuing on the Mara Rosa property with the completion of an airborne magnetic and radiometric study and soil sampling in the Lombardi area to the east of the Posse deposit. The soil sampling has revealed a gold-in-soil anomaly 1.5km long, up to 75m wide 0.2g/t, with assays up to 4.1g/t. Trenching is planned in this area in the near future. The main focus of the exploration at present is to generate drill targets that may add resources outside the Posse area.
The Company acquired the Mara Rosa project in October 2003. Previously the Posse deposit had been mined by BHP Billiton and Western Mining Ltd, and is estimated to have produced approximately 80,000 ounces of gold.
Amarillo has been actively exploring the region due to its prospectivity. From November 2005 until November 2006 the Company completed a 24 hole drilling programme on the Posse deposit. This provided infill information on the known mineralisation, and also discovered new gold mineralisation beneath the North pit. A 43-101 compliant mineral resource estimate was completed in March 2007 by CCIC. The CCIC estimate reported an inferred mineral resource of 22,468,000 tonnes grading at 1.35 g/t Au for 974,000 ounces of contained gold with a 0.5 g/t Au cutoff.
This news release was compiled by Buddy Doyle, who is the qualified person as defined by NI 43-101.
ON BEHALF OF THE BOARD OF DIRECTORS
AMARILLO GOLD CORP.
Per: “Buddy Doyle”
Buddy Doyle, President