Amarillo files technical report for Posse Gold feasibility study

TORONTO, June 16, 2020 (GLOBE NEWSWIRE) -- The technical report for the definitive feasibility study on Amarillo Gold Corporation’s (Amarillo or the Company) (TSXV: AGC, OTCQB: AGCBF) Posse Gold Project has been filed on SEDAR (www.sedar.com).

The report has been prepared according to the standards set out in NI 43-101: Standards of Disclosure for Mineral Projects. It is also available on the Company’s website under the Mara Rosa section of the Projects tab. The report is called NI 43-101 Technical Report Definitive Feasibility Study Posse Gold Project, Brazil, and its effective date is June 15, 2020.

As previously announced on June 2, 2020, the positive feasibility study on the Posse Gold Project in Goiás State, Brazil supports an open pit mine and carbon-in-leach (CIL) operation with dry stack tailings that has low capital and operating costs and a strong financial return.

Highlights
Base case assumes a gold price of $1,400 per ounce and foreign exchange rate of Brazilian Reais (R$)4.2 to U.S. dollars (US$)1. Current market rates assume a gold price of $1,730 per ounce and foreign exchange rate of R$5.3 to US$1. All dollar figures are in US$ unless otherwise noted.

• Mine life of 10 years.
• Gold production of 102,000 per year in the first four years, average annual gold production of 84,000 ounces.
• After-tax net present value 5% (NPV 5%) of $183 million, increasing to $360 million using current market rates.
• After-tax internal rate of return (IRR) of 25%, increasing to 50% using current market rates.
• Cash cost of $706 per ounce, decreasing to $631 per ounce using current market rates.
• All-in sustaining cost (AISC) of $738 per ounce, decreasing to $656 per ounce using current market rates.
• After-tax payback of 2.6 years, decreasing to 1.5 years using current market rates.
• Initial capital cost of $145 million, decreasing to $125 million using current market rates.
• Gold resources of 1.2 million contained ounces, based on 32 million tonnes grading 1.1 grams per tonne (g/t).
• Gold reserves of 902,000 contained ounces, based on 24 million tonnes grading 1.18 g/t.
• The Company has a strong social license to operate. It has received the Preliminary License and a Protocol of Intent to build the Posse Gold Project was signed with the governor of the State of Goiás on May 25, 2020.

SRK Consultores do Brasil Ltda (SRK) compiled the definitive feasibility study with input from other engineering companies and consultants. These include Australian Exploration Field Services, Aurifex Pty Ltd, and Ausenco do Brasil Engenharia Ltda., among others.