Amarillo Releases Drilling and Assaying Update from its Lavras do Sul Project

Amarillo Gold Corporation (AGC:TSX-V) (“Amarillo” or “the Company”)  is pleased to announce results from its Phase 1 drilling program at Butiá in its Lavras do Sul project. Butiá is an area of known gold mineralization 3.8km west of the village of Lavras do Sul, in the state of Rio Grande do Sul, Brazil. The village is centered in a 100 sq kilometer granitiod intrusion that hosts substantial gold mineralization and has been the scene of numerous gold diggings. The Butiá prospect is the most westerly area of known gold mineralization.
The purpose of this drilling was to gain a clearer idea of the geometry of the gold zone at Butiá and obtain better grade control in the upper oxide-transition zone. The drill program totaled 3 core holes for a total of 574 meters. All three holes were drilled in a fence spaced 50m apart at the same azimuth, of 020 degrees and dip of minus 60 degrees. The drilling crossed the centre of the known mineralization at Butiá, however, the azimuth of Amarillo’s drilling was at 180 degrees or in the opposite direction to the historic drilling.  The assay results are summarized in Table 1.

Table 1 – Summary of Drill Results

Table 1 – Summary of Drill Results
Hole No. Total Depth (m) Zone From (m) To (m) Distance   (m) Grade(g/t Au)
LDH-01 187.4 Butiá 0 157 157 1.04
including 0 12.55 12.55 2.18
including 12.55 20.0 7.45 1.24
LDH-02 104.5 Butiá 0 55.5 55.5 0.90
LDH-03 281.9 Butiá 42.5 247 204.5 0.77
including 43.5 54 10.5 2.54










Amarillo is particularly pleased by the oxide/transition intercepts in drill holes LDH-01 and LDH-02. LDH-03 was collared in fresh granite. Future test work will focus on this oxide/transition zone mineralization prior to focusing on the sulphides.

The drilling results from the sulphide zones, reported above, are consistent with the historic drilling that occurred along the same section.  These included drill hole 2005LG001DD (drilled by Rio Tinto PLC in 2005), which returned 181.0 m @ 0.87 g/t Au; drill hole BB-01-85, which returned  184.0 m @ 0.93 g/t Au; and drill hole BB-11-85 (drilled in the 1980’s by CBC), which returned 104.0 m @ 1.03 g/t Au.

The combined drilling at Butiá to date suggests a structurally controlled gold mineralization zone 70m-100m wide, striking for at least 200m at 120 degrees and steeply dipping to SW. The walls bounding this zone appear to be block joint controlled, forming walls that are stepped. The mineralization is open along strike and at depths below 200m. It is associated with coarse grained pyrite and hosted within a clay, sericite alteration zone, ICP analysis shows the gold to silver ratio to be about 1:1 and very few other associated elements, with relatively low arsenic (average 50ppm), low mercury, and antimony, all initially encouraging from the metallurgical point of view.

After completing these three holes at Butiá the drill rig was moved to the second area of historically drill tested mineralization at Lavras do Sul, called Cerrito 1.5km NW of the village. The Company intends to return to the Butiá prospect later in 2007, after mapping, surface sampling and geophysics are completed.

Amarillo plans to drill at least another 5,000 meters at its Lavras do Sul project during the remainder of 2007, and is currently collaring the 10th drill hole in the Cerrito area. All except the first of these holes has been drilled in virgin territory looking for extensions to the Cerrito mineralization to the SW. Assays are awaited for drill holes 4 to 9, the majority of which have intersected alteration. The Company expects to release these results in coherent groupings of 3-4 holes at a time.

To help accelerate the drilling program at Lavras do Sul, the Company is securing a 2nd drill rig. We are in the final stages of contract negotiations and expect the drill to be on site mid-June.

Away from Cerrito and Butia, the company has been mapping other promising areas of old gold diggings that have never been drill tested. The two areas where this work is most advanced are Paradáo (1.5km west of the village) and Aurora (6km to the southeast). It is likely that the 2nd drill rig will be deployed to these areas, starting at Paradáo, when it arrives on site.

Buddy Doyle is the qualified person for this news release as defined by the National Instrument  43-101 guidelines.

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.


Buddy Doyle, President

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.