Vancouver, B.C., May 23, 2008- Amarillo Gold Corp. (TSX-V AGC) (“Amarillo” or the “Company”) has signed a Heads of Agreement with IAMGOLD Corporation (TSX:IMG and NYSE:IAG) (“IAMGOLD” ), whereby Amarillo has the right to acquire a 70-per-cent interest in eight licence areas which have a cumulative net area of approximate 7,000 hectares (the “Property”) and which are contiguous with the Company’s current Lavras do Sul project (19,000 hectares) in the southern Brazil state of Rio Grande do Sul.

The terms of the agreement are:

Amarillo can earn a 51-per-cent interest by expending $800,000 (U.S.) on exploration over 3 years which will include a minimum of 2,000 metres drilling and of which $200,000 (U.S.) must be spent within the first 12 month period. In the event that IAMGOLD elects not to contribute pro-rata funding after the first earn-in period then Amarillo may earn a further 29% interest (for a total of 80%) by funding any mineral resource discovered on the Property through to feasibility study.

At the completion of a feasibility study on the Property, and up to a period of 60 days from this date, IAMGOLD may either
• elect to contribute its pro-rata share to future funding OR
• dilute its interest to a 2.0% Net Smelter Royalty (NSR), of which 1.0% may be bought back by Amarillo for US$1,000,000 at any time up to the commencement of production OR
• exercise a one-time back-in right to increase its participating interest to 60% – if Amarillo has established a total mineral reserve in excess of 2.5 million ounces of gold on the Property – and become operator by paying three times Amarillo’s exploration costs up to the date of IAMGOLD exercising its back-in right.

Buddy Doyle, President and CEO of Amarillo, commented: “This agreement is a big step forward for Amarillo’s exploration program at its Lavras do Sul gold project. Amarillo now has the control of 26,000 hectares of mineral exploration rights, representing the vast majority of the Lavras intrusion, and therefore has the freedom to systematically follow-up a number of additional gold showings and leads occurring throughout this prospective district.”
An updated tenement map over the Lavras intrusive will be posted in the near future on the Company’s website.

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. An independent 43-101 compliant preliminary economic assessment (“PEA”), dated February 28, 2008, made a resource estimate on the Posse deposit at Mara Rosa. The PEA placed 13.5 million tonnes @ 1.48 g/t Au (643,000 ounces) in the indicated category and 23.0 million tonnes @ 1.26 g/t Au (538,000 ounces) in the inferred category. The PEA was authored by Ian Kelso of CCIC, Sudbury, Ontario and may be found on SEDAR or downloaded from the Company’s website. 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. Current share issue equals 40,583,133.



Per: “Buddy Doyle”

Buddy Doyle, President