VANCOUVER, BRITISH COLUMBIA–(Marketwired – June 6, 2016) – Amarillo Gold Corp. (TSX VENTURE:AGC) (“Amarillo” or the “Company”) is pleased to announce that it has signed a contract of purchase and sale with Baribras Mining Ltd, (“Baribras”). Baribras is Brazilian registered private company that owns the mineral rights at the dormant Zacarias mine 13 km to the west of the proposed Posse mine development at the Mara Rosa Project. Zacarias material was toll processed at the old Posse mine when it was operated by Western Mining 1992-1995. Approximately 360,000 tonnes of tails from processing minerals from Zacarias mine remain on the Posse mining site. These tails are still the property of Baribras.
The federal, National Department of Mineral Production (DNPM) has facilitated both parties to completed this agreement so as to simplify the title and encourage the development of the Mara Rosa project.
The agreement signed is a purchase agreement for these tails. Amarillo will gain ownership by passing this material through the proposed processing plant. Amarillo will charge an agreed operating cost per tonne for processing this material. The profit from any gold or silver recovered from processing these tails will be shared 50% by Amarillo, 50% by Baribras. Baribras will also pay the cost of removing certain structures from the site as part of the deal.
Buddy Doyle, President and CEO, commented: “Amarillo is systematically moving the Mara Rosa Project forward and this is another necessary step. Another box ticked! Having the ability to move these historic tails that sit in the blast radius of the proposed pit is a significant step towards our plans to build a mine at Mara Rosa.”
Baribras have taken a number of samples from the tails and have reported an average grade of 0.48 g/t Au and 31.7 g/t Ag, (from 36 surface and auger samples). More samples and metallurgical testing will be required to obtain a better understanding of the potential recoverable precious metals content. There is also a second historic tailings pile 100% owned by Amarillo that could be reprocessed. The cost and potential revenue from reprocessing both historic tailings piles will be factored into the planned feasibility study.
The Qualified person for this report is Frank Baker, a metallurgist with over 30 years experience, a member of the AUSIMM and IOM3.
About Amarillo Gold Corp.
Amarillo Gold Corp. is focused on acquisition, discovery, and definition of gold resources in Brazil. It is the Company’s policy to strive to do this in a sustainable, safe way using best practices whilst benefiting our shareholders and the communities we work in. The Company’s principal projects are the Mara Rosa Project in the state of Goias, and the Lavras do Sul Project in the state of Rio Grande do Sul. The Posse Deposit at Mara Rosa contains 5.462MT @ 2.04 g/t Au Measured, 15.393MT @ 1.65 g/t Au indicated and 3.269MT @ 1.34 g/t Au inferred. (A NI 43-101 resource as independently determined by Australian Exploration Field Services Pty. AEFS, Keith Whitehouse QP). The Mara Rosa Gold Project has received a positive economic assessment from a Pre-Feasibility study and Amarillo is proceeding to get the project permitted. The Posse Deposit was successfully mined by Western Mining Corporation (WMC) during the 1990s (mined areas are excluded from the above-stated resource figures), and is located in an area of excellent infrastructure: approximately 35 km NE of Yamana’s Chapada open pit Cu-Au operation, some 80 km NE of Yamana’s Pilar Au project (in feasibility), 95 km NW of Votorantim’s Niquelandia Ni laterite mine, 105 km from NE of Serra Grande’s underground Au mine, and 105 km NNW of Anglo American’s Ni laterite project at Barro Alto.
The Lavras do Sul Project is an advanced exploration stage property (190 sq. km.) comprising of more than 19 prospects centered on historic gold workings, with encouraging gold mineralization discovered and defined by more than 16,000 meters of drilling. The initial resource estimate at the Butia prospect reported 215,000 ounces of gold indicated from 6.4 MT at 1.05 g/t Au, and 308,000 ounces of gold inferred from 12.9 MT at 0.74 g/t Au using a 0.3 g/t cut-off grade in a NI 43-101 resource as independently determined by Atticus Consulting 2010, Anthony Amberg, QP. Lavras do Sul is also located near excellent infrastructure. The Company also has a portfolio of earlier stage projects and all properties under Amarillo’s management are located in areas of good infrastructure and mining-friendly communities.
ON BEHALF OF THE BOARD OF DIRECTORS
AMARILLO GOLD CORP.
Per: “Buddy Doyle”
Buddy Doyle, President
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. Forward looking statements in this news release include plans to move ahead with the work required to obtain the LI. Various factors may prevent or delay our plans, including but not limited to, the ability to raise funds, 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. Permission from the Government and community is also required to proceed with future mining production. We may not be able to fulfill our obligations under the proposed gold loan and we may be unable to raise sufficient financing to carry out our plans. Readers should review risk factors applicable to junior mining exploration companies generally to understand the variety of risks that can affect the Company. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements whether as a result of new information or future events or otherwise, except as may be required by law.