Amarillo Gold Corp. (TSX-V: AGC) (“Amarillo” or the “Company”) is pleased to announce the following drill results from infill drilling of the saddle zone within, and immediately beneath, the proposed Posse pit at the Company’s wholly-owned, development-stage Mara Rosa Project in Brazil.
The current Posse deposit optimized pit design is based on an $1100/ounce gold price (see corporate presentation, or the PFS report on Amarillo’s website at www.amarillogold.com). The proposed pit has a notable saddle zone between the deeper southern and northern parts of the pit. A review of the block model showed this saddle zone contained gold mineralization in the Inferred resource category. An infill drilling program was initiated with the intent to convert these Inferred ounces into the Indicated category. This 19 hole drilling program has been completed and the summary assay results are listed in Table One below.
Table One: Infill Drill Hole Gold Assay Results At Saddle Zone, Posse Deposit.
|Hole No.||Total Depth (metres)||Azimuth /Dip||From (metres)||To (metres)||Width (metres)||
|Grade (g/t Au)|
Notes: All drill hole samples shown here consist of split HTW and NTW diamond drill core. The samples are sent to Acme Laboratories in Goiania, Brazil, for preparation and then to Vancouver, Canada where, samples are first subjected to a multi-element ICP assay that includes Au and then sent to fire assay for Au using 30g aliquots. If the grade is higher than 5 g/t, a gravimetric method is used. All samples are subject to a chain of custody and are submitted with standards and blanks to check the assay results. The laboratories also use internal standards and repeat analysis. For the results reported in this release all the standards, blanks and repeats delivered acceptable results. Intercepts were calculated using a minimum of a 0.5 g/t cut off at the beginning and end of the intercept and allowing for no more than 10 consecutive metres of less than 0.5 g/t Au. The true width is calculated based on a dip 45 degrees +/- 2 degrees for the Posse deposit and are rounded to the nearest decimeter. Holes were drilled perpendicular to strike.
The location of the drill holes reported here can be viewed in three dimensions and by section in relation to all previous drilling on the Company’s website at www.amarillogold.com or at http://www.corebox.net/properties/mara-rosa
None of the gold mineralization from the Saddle Zone area is currently incorporated into the reserves and resources used in determining the economics of the Posse deposit. Any gold mineralization that is upgraded into the Indicated category as a consequence of this drilling program, will be additive to the total potentially economic ounces available to the Mara Rosa project.
Amarillo has therefore contracted Mr. Keith Whitehouse of Australia Exploration Field Services to carry out an updated resource estimate that will incorporate the new drilling program results. Mr. Whitehouse is a qualified independent geologist as per NI 43-101 guidelines and was responsible for the last resource estimate conducted at the Posse deposit, which was the basis of the resource used in the PFS. Mr. Whitehouse will also update the current block model and this updated model will be used in the ongoing feasibility study at the Posse deposit.
Several drill holes in this current program also intersected silver mineralization separate to the gold mineralization hosted in the hanging wall above the main gold zone. Table 2 below summarizes these drill assay results. A similar silver mineralization intercept was also reported 500 metres to the north of the drill results reported here. (See Amarillo’s News Release dated October 17th 2012). The geological significance of this silver mineralization is still being assessed as it presents an interesting newly recognized mode of mineralization at Posse.
Table 2. Drill Hole Silver Assay Results at Posse Deposit
|Drill Hole||From||To||Interval||Ag g/t|
The author of this News Release is Buddy Doyle, a member of the AUSIMM, and a geologist of 30 years experience. The NI 43-101 compliant Qualified Person for this news release is Kevin Kivi, P.Geo.
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 Votorantim’s Niquelandia Ni laterite mine, 105 km from NE of Anglogold-Ashanti’s Serra Grande 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 DIRECTORS
AMARILLO GOLD CORP.
Per: “Buddy Doyle”
Buddy Doyle, President
Amarillo Gold Corp.
+ 1-604-689-1799 (Canada)
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, financing, access, mineral prices and success and failure of the exploration and development carried out at various stages of the program.. 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.