Amarillo Gold Corp. (TSX-V: AGC)(“Amarillo” or the “Company”) is pleased to announce that it has received an updated estimate for the Posse deposit, part of the Mara Rosa project, approximately 360km NNW of Brasilia the capital of Brazil, in Goias State.
The estimate is 43-101 compliant, and has been supplied by Australian Exploration Field Services Pty Ltd. (“AEFS”) of Bendigo, Australia. The qualified person for the report is Hugo Hoogvliet, a consulting geologist with 25 years experience and a member of the AusIMM. The resource calculation was conducted by Keith Whitehouse, a principal of AEFS with 30 years experience, using Micromine software. Mr. Whitehouse is a member of the AusIMM and a CP (Geo).
The estimate is an update of the previous resource estimate made as part of a Preliminary Economic Assessment, authored by Ian Kelso of Caracle Creek Consulting Inc. (“CCIC”) and released in March 2008.
The AEFS model differs from the CCIC estimate in that it contains 15 new holes drilled by Amarillo, targeting gaps in the data underlying the CCIC model. Results for these holes were released in March 2009.
The AEFS model also contains 19 historic holes drilled from surface, and 11 underground holes and channel samples that were added to the electronic database after a review of the historic work carried out by Amarillo staff under the supervision of Mr. Hoogvliet. The estimate is also the first to use geology based wireframes to constrain the kriging. A review of historic and new density measurements lead AEFS to use a density of 2.73 g/cc for the Posse orebody, replacing the 2.85 g/cc value used by CCIC. Mr. Whitehouse employed the Median Indicator Kriging method, constrained by the geological wireframe to make the estimate. The results are given below at various cut-off levels.
Table 1. Posse Deposit resource estimate using 0.5g/t gold cut-off.
Table 2. Posse Deposit resource estimate using 1.0g/t gold cut-off.
Table 3. Posse Deposit resource estimate using a 1.5g/t gold cut-off.
The Company is pleased with these results. The full report from AEFS is expected within 45 days, and will also contain optimized pit estimates based on economics updated from the PEA. When compared with the last resource estimate in the PEA, the gold grade is consistently higher due to the addition of the extra holes and reduced dilution. The tonnage has decreased, due to the use of a constrained model, and the use of a lower density value in the new estimate.
Buddy Doyle, CEO and President of Amarillo said, “The Mara Rosa project remains the foundation project of the Company. With the current gold prices and with this new resource estimate in hand, it is time to move this project ahead. The Company will use a tender process to select an independent engineering consulting firm to conduct a pre-feasibility study, with a view toward bringing this project into production as soon as possible.”
This press release was authored by Buddy Doyle (B. App. Sc.), a member of the AusIMM, with 28 years experience and a qualified person in compliance with National Instrument 43-101. It was reviewed by AEFS and is released with their input and approval.
Amarillo Gold Corp. is a company focused on the acquisition, definition and discovery of gold resources in Brazil. Its principal projects are the Mara Rosa project in the state of Goiás and the Lavras do Sul project in the state of Rio Grande do Sul. The Posse Deposit at Mara Rosa contains 623,000 ounces indicated from 11.9MTonnes @ 1.62 g/t Au and 451,000 ounces inferred from 10.1MTonnes @ 1.38 g/t Au at a 0.5g/t cut-off grade, 43-101 compliant resource as independently determined by AEFS. The project is in the economic evaluation stage. The Posse deposit was successfully mined by WMC during the 1990’s (mined areas are excluded from the above resource figures) and is located in an area of excellent infrastructure. It is located some 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 nickel laterite project (in construction), 95 km NW of Votarintim’s Niquelandia nickel laterite mine and approximately 60 kms NE of Yamana’s Pilar Au project (in feasibility). Grid power to the site was established during the previous open pit mining operation and the Serra da Mesa hydro-electric dam lies 35 km to the east.
The Lavras do Sul project is in the advanced exploration stage with over 16,000m of drilling with encouraging gold mineralization being discovered and defined, also in an area of excellent infrastructure. 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.
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.