Amarillo Gold Corp (“Amarillo”) (NEX:AGC.H), announces that it has filed with the TSX Venture Exchange its information circular as part of the process of obtaining shareholder approval for the transactions constituting Amarillo’s Reverse Takeover and thereby meeting the minimum requirements to be listed as a Tier 2 company on the TSX Venture Exchange. After review and acceptance by the Exchange, a date will be set for a special shareholders meeting and the information circular will be mailed to the shareholders. At this meeting Amarillo’s shareholders will be asked to approve a resolution to ratify, confirm and approve the purchase of Metallica Brasil Ltda (“Metallica Brasil”) for $US450,000. The shares of Metallica Brasil will be held in trust by an arm’s length party pending receipt of Exchange acceptance and shareholder approval. The main asset of Metallica Brasil is the Mara Rosa Gold Project, located in the Goias State, Brazil. Amarillo will also seek an ordinary resolution approving a private placement financing at that time. The information circular will fully disclose the current status of the company and the proposed Mara Rosa purchase.
As part of the rationalization of the company and its new focus on Brazil, Amarillo has let lapse or has relinquished all its non-Brazilian properties. These lapsed properties include, the Otish Mountain Properties (diamond exploration area play), the Paradise property (rare metals option in British Columbia), the Kelly Property (a platinium exploration option near Sudbury, Ontario), the Pluto Property (a gold exploration property in the Yukon), the Canex Property (near Nelson, British Columbia), and the Sunro Property (an option near Sooke, British Columbia).
The focus of Amarillo is now fully on its Brazilian projects, Mara Rosa and San Antonio, both are subject to exchange and share holder acceptance.
The Mara Rosa project is a greenstone belt shear hosted meso-thermal gold mineralised sytem that contains within it the Posse gold deposit. The mineralised system stretches along the shear for about 10km as evidenced by geological mapping and soil geochemistry. It was previously mined by Western Mining who extracted 30,000 oz of gold. There has been over 234 exploration holes totalling 19,592m in the area around the Posse deposit, with the assay information from this drilling along with assays from 4320 blast holes, 185m of underground sampling and 278m of surface sampling, Metallica Brasil estimated that the Posse deposit contained a resource of 12.75 million tonnes containing 726,500 oz of gold (Measured 51.2%, Indicated 36.6% and Inferred 12.2%, using krieging, based on a 1 g/t cut-off, high grade gold cut to 10g/t). Amarillo would like to be clear that this is not presented as a reserve or resource, the Metallica estimate is given here to illustrate that there is significant gold mineralization on the Mara Rosa project, this being one of the reasons Amarillo management was attracted to the project. It is Amarillo’s intent to bring the deposit description to 43-101 standards as soon as practical. This will be done by check assaying the extensive core library at Posse and independent analysis of assay results mentioned above. Amarillo’s future plans for the Mara Rosa project also includes reviewing the known mineralization for high grade (greater than 5g/t) and growing the resource through exploration on the 28000 hectares of ground held in the project. The most prominent target being the greater than 0.2g/t soil anomaly that continues along strike for many kilometres north of the Posse deposit.
The San Antonio project is an option from Phelps Dodge Do Brasil Mineracoa Ltda, (“Phelps”). It is also in the state of Goias, 146 kilometers from the Mara Rosa project. The property consists of 1931 Ha of exploration permits within which there are gold and copper, stream and rock chips anomalies hosted in carbonates in a promising structural setting. Artisanal mine workings on the property (now abandoned), have returned rock chip analysis which have assayed to a maximum of 22g/t of Au and silver (Ag) up to 115g/t. The mineralization is hosted in steeply dipping silicfied viens within the carbonate host. These veins variously returned assays in the range of, 22m @ 8.8g Au, 5m @ 11.7g/t, 1.4m @ 4.2 g/t, etc. It is Amarillo’s intention to drill test the down dip extensions of this vein/structural mineralization. The option with Phelps requires 400m of drilling to be completed in the first year. This drilling is estimated to cost approximately $130,000. Amarillo earns 50% by completing 1000m of drilling and expending $US250,000. Amarillo can earn up to 100% interest by spending a total of $1,000,000 and presenting a bankable feasibility study by year 6. Phelps can elect to participate anytime after the initial Amarillo earn-in, if they do not participate then they retain a 2% NSR.
Amarillo hopes to build from this project base with the view of becoming a competitive Brazilian gold producer in the future.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the Reverse Takeover may not be accurate or complete and should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.
Canaccord Capital Corporation, subject to completion of satisfactory due diligence, has agreed to act as sponsor to the Company in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.