Amarillo maps two new prospects at Lavras do Sul, Southern Brazil

Surface sampling returns multi-gram assays. Accelerates program by mobilizing 2nd drill rig

Vancouver, B.C., July 22, 2007 – Amarillo Gold Corp. (TSX-V: AGC) (“Amarillo” or the “Company”) would like to introduce two recently mapped prospects at our Lavras do Sul project: the Paradao prospect and the Aurora prospect. Preliminary surface work has been conducted on both prospects and cursory results are discussed. Additionally, an update of current and future activity on the project is provided.

The Lavras do Sul project comprises several structurally controlled gold mineralized alteration zones hosted primarily in a 10km diameter granite/monzonite/syenite intrusive complex. Two separate gold rushes in the 1880’s and 1930’s occurred in the area and this created numerous workings in the intrusive and nearby surrounding rocks. These old workings are in large part confined to the surface-oxidized zones, however in some cases, pits, shafts and tunnels follow quartz vein systems to greater depths. In the 1980’s, two of these workings, Butiá and Cerrito, were drill tested. Amarillo has since followed up with a single rig on site as of November, 2006. Ten holes concentrated on confirming and extending the known mineralization at Cerrito and Butiá have been completed and results for the first eight holes have been reported in previous news releases.

In parallel with this activity, Amarillo’s geological team has been mapping and exploring other prospects contained within the Lavras do Sul project. BLEG and panned concentrate samples have been taken from streams within the project and the results highlighted ten distinct anomalous catchments. Five of these pointed to areas of known workings and alteration and this information is being used to prioritize work. Notably, the other five anomalies do not appear to be related to any known workings and this may direct us towards new mineralized zones with subtle or non-existent surface expressions.

One area the BLEG survey highlighted was the Paradao prospect, situated 1km to the west of the village of Lavras do Sul. The prospect consists of diggings, trenches and pits in altered intrusives spanning an area 1.2km by 1km. Within this area mapping has revealed three parallel zones all trending NW-SE at 120◦. The southern most zone strikes for 800m, and shows a 200 to 250m wide zone of alteration partially obscured by colluvium. There are numerous shallow diggings, particularly to the northwest and mainly within the colluvium. The alteration hosts a number of south dipping siliceous veins. Float and grab samples of the vein material have returned multi-gram per tonne gold fire assay results, the highest of which ran 309g/t. No soil sampling has been attempted here due to the extensive colluvium.

The middle zone at Paradao consists of a quartz vein stockwork that strikes for up to 1km. The stockwork is 10-30m wide at surface and appears to dip to the north. Two areas of diggings occur in the central part of this zone on both sides of the stockwork. Grab samples from the stockwork run between 0.4g/t and 1.75g/t Au. Orientation soil samples over this area show an anomalous 0.1g/t Au over the stockwork and alteration zone. It is possible that some of the colluvium covering the southern zone is derived from this area. An initial eleven drill holes totaling more than 1500m of drilling has been planned to test the three zones at the prospect.

The Aurora prospect also registered in the BLEG survey. This prospect occurs on the west boundary of the intrusive complex. It strikes for at least 600m and is float bounded against country andesites on the north side of the southeastern end. The Aurora prospect has a different character to the other prospects the company has mapped to date in that it is dominated, by quartz, carbonate, actinolite, heamatite alteration, with accessory fluorite and tourmaline. Larger scale excavations, tunnels and chambers dominate its northwestern end. Grab samples from old waste dumps have run up to 55 g/t Au and consistently run in the 10’s of grams. An initial seven drill holes totaling more than 1000m of drilling has been planned to test the prospect.

To further aid exploration, an airborne geophysical survey has been commissioned to fly magnetics and radiometrics. This data should further help define areas of alteration, especially those obscured by cover. The survey commenced on the 15th of July.

A second rig, operated by a rival firm, has been mobilized to the project and is now operational on the Paradao prospect. The first rig has been moved to the Aurora prospect. Mapping has commenced on a fifth prospect, the Canelaria prospect. Target generation across the property is proceeding rapidly.

Amarillo Gold Corp. is a company focused on the acquisition, definition and discovery of gold resources in Brazil. Its principle 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 was found by an independent 43-101 study carried out by CCIC to contain 974,000 ounces inferred at a grade of 1.35g/t (0.5g/t cut-off) and 764,000 ounces inferred at a grade of 1.80g/t (1g/t cut-off). The Company also has a portfolio of earlier stage projects. All properties under Amarillo’s management are located in areas of good infrastructure and robust community support.

This news release was compiled by Buddy Doyle, who is the Qualified person as defined by NI 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