Vancouver, BC Amarillo Gold Corp. (TSX-V: AGC) (“Amarillo” or the “Company”), has signed a heads of agreement with Crusader Holdings NL (“Crusader”), an ASX listed company, whereby Amarillo has the right to acquire a 70% interest in 4 exploration permits (“alvaras”) totalling 4,560 hectares which are contiguous with the Company’s current Mara Rosa Project holdings.
The terms of the Crusader agreement are: Amarillo can earn a 70% interest by expending US$300,000 on exploration over the next thirty months and making staged cash payments totalling US$50,000 during the earn-in period. Subsequent to the earn-in a 70:30 joint venture agreement will be implemented. In the event that either party elects not to contribute then a standard dilution clause will be applied down to a 10% equity interest at which point it converts to a 1% NSR.
The Crusader alvaras consist of two discrete blocks. One is NE and directly along strike from the historical Zacharias gold deposit (held by a third party) and contains a number of abandoned garimpeiro workings. Here Crusader completed a first-pass reconnaissance program of geological mapping and soil /rock chip sampling which included 2.7g/t Au in rock chips and 195ppb gold in soils. The second block adjoins the SW corner of Amarillo’s existing land package and has been little explored up to this point however a 2006 BLEG program undertaken by Amarillo highlighted anomalous gold values possibly sourced from this area.
Amarillo plans to commence a follow-up exploration program over the Crusader areas during the first quarter of 2008 with the objective of delineating drill targets by the fourth quarter.
Subsequent to the Crusader agreement and the previously announced option/JV agreement with Horizonte Minerals PLC (Stockwatch Oct 9), Amarillo now has priority exploration rights over 76,000 hectares within the Mara Rosa district.
About Amarillos’ Mara Rosa project: the initial property package which contains the Posse Au deposits was purchased for $US450,000 in October 2003. Posse was previously mined by BHP Billiton and Western Mining Ltd and is estimated to have produced in the region of 80,000 ounces of gold.
From November 2005 until November 2006 Amarillo completed a 24 hole drilling program on the Posse deposit. This provided infill information on the known mineralisation, but more importantly, discovered new gold mineralisation beneath the North and South pits. A 43-101 compliant mineral resource estimate was completed in March 2007 by Caracle Creek International Consulting Inc. This reported an inferred mineral resource of 22,468,000 tonnes grading 1.35 g/t Au for 974,000 ounces of contained gold using a 0.5 g/t Au cut off.
ON BEHALF OF THE BOARD OF DIRECTORS
AMARILLO GOLD CORP.
Per: “Buddy Doyle”
Buddy Doyle, President