Amarillo Gold Corp. (TSX-V: AGC) (“Amarillo” or the “Company”) is pleased to announce the filing on SEDAR of a National Instrument (“NI”) 43-101 technical report representing the qualifying report for the recently announced Pre-feasibility Study at the Mara Rosa Project located in the state of Goias, Brazil. The report was compiled by Coffey Mining International; the lead engineering firm in the study. Highlights of the Pre-feasibility Study, previously reported by Amarillo on November 27th, 2011, are as follows:
Highlights of the economic model, and a summary description of the project follow (all currency $US unless otherwise stated):
• Proven and Probable reserves of 17.1MT @ 1.72 g/t yielding 945,200 ounces of contained gold. Recovery after processing will be 869,600 ounces of gold.
• Initial 7 year mine life with 2.5MT per year throughput. Processing comprised of a 12 hour pre-oxidation stage feeding a conventional CIL gold recovery circuit.
• Average gold production of 124,000 ounces per year.
• Average total cash operating cost of $524/ounce (on-mine costs $464/ounce with the balance comprising refining, royalties, insurance, transport, security costs, etc).
• Total gross revenue of $1.044 billion assuming a gold price of $1200/ounce.
• Pre-Tax Net Present Value at a 5% discount rate (“NPV5”) of $283M and an IRR of 37.9% based on a gold price of $1200/ounce.
• After Tax NPV5 of $178M and an IRR of 26.6% based on a gold price of $1200/ounce
• Estimated start-up capital of $184M which includes $5.4M working capital.
• Recommendation to proceed to Feasibility Study (“FS”).
Several aspects of the Feasibility Study are already underway.
• Coffey Mining International is conducting geo-technical and metallurgical studies.
• Hydrovia is completing ground water studies.
• Neotropical is continuing with the environmental work.
Amarillo has sent out tenders for a lead engineering firm to complete the Feasibility study.
The supervising Qualified Person for Coffey Mining International is Norman Lock C.Geol FGS, PrSciNat. The Qualified Person for Amarillo is Frank Baker, M. IOM3 and MAusIMM.
A copy of the complete report is available at www.sedar.com
About Amarillo Gold Corp.
Amarillo Gold Corp. is focused on the 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 gold measured and indicated from 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 is in the Pre-feasibility stage.
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, 105 km NE of Serra Grande’s underground Au mine, 105 km NNW of Anglo American’s Ni laterite project (in construction), 95 km NW of Votarintim’s Niquelandia Ni laterite mine, and some 60 km NE of Yamana’s Pilar Au project (in Feasibility).
The Lavras do Sul Project is an advanced exploration stage property (190 sq km) comprised of more than 19 prospects centered on historic gold workings, with encouraging gold mineralization discovered and defined by more than 25,000 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 (0.3 g/t cut-off grade)(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)
+55-31-3261 5974 (Brazil)
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.