Vancouver, B.C. June 15, 2011:Amarillo Gold Corp. (“Amarillo” or the “Company”) (TSX.V: AGC) reports that its Board of Directors (the “Board”) has implemented a Shareholder Rights Plan Agreement (the “Rights Plan”) effective June 6, 2011.
The sole purpose of the Rights plan is to ensure the fair treatment of all Amarillo shareholders in connection with any possible take-over bid for the outstanding common shares of the Company. If a take-over bid should occur the Rights Plan provides a mechanism to ensure that shareholders have adequate time to properly evaluate and assess a take-over bid without facing undue pressure. The Rights Plan also provides the Board with additional time (60 days) from the minimum legal requirements (35 days) to consider any take-over bid and, if applicable, to explore alternative transactions in order to maximize shareholder value. The Rights Plan is not designed to prevent take-over bids that treat the Company’s shareholders fairly.
The Rights Plan has been approved by TSX Venture Exchange and is subject to shareholder approval at the Company’s annual general and special shareholders´ meeting to be held on July 7, 2011. If ratified by the shareholders, the Rights Plan will have a term of 3 years. The Board is not currently aware of any pending or proposed take-over bid for Amarillo. A summary of the Rights Plan is contained in the Company’s information circular, a copy of which is available at www.sedar.comand has been mailed to all Company shareholders.
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 623,000 ounces of gold indicated from 11.9 MT at 1.62 g/t Au, and 451,000 ounces of gold inferred from 10.1 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).Grid power to the site was established during WMC’s open pit mining operation, and the Serra da Mesa (450 MW) hydro-electric dam lies 35 km to the east.
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 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 ((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. Forward looking statements in this news release include that we will have in place a rights plan, and that we have mineral resources that we may be able to mine. Various factors may prevent or delay our plans, including but not limited to, regulatory approval, 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.