Amarillo Gold, Makes Another Step Towards Developing Its Mara Rosa Project, Signs Deal With Baribras

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.