Amarillo Gold Commences Pre-Feasibility Update at Mara Rosa Project

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 9, 2017) - Amarillo Gold Corp. (TSX VENTURE:AGC) ("Amarillo") is pleased to announce that it has commenced an update of the 2011 Pre-Feasibility Study (PFS) on the Posse deposit at its Mara Rosa Project in central Brazil.

The PFS update will be done NI 43-101 in accordance to NI 43-101 guidelines and based on the recent resource estimate (News Release July 21, 2016). SRK Consulting ("SRK") has been selected to carry out the study, using their Belo Horizonte based team. ONIX Engineering & Consulting also base in the Belo Horizonte area have been retained to provide cost estimations on the equipment and plant.

Since the PFS on Posse by Coffey Mining (News Release Nov 28, 2011) a number of criteria have changed which the Company considers warrant an updated economic model. In addition to renewing external inputs SRK will include a recalculation of the reserve figure given that the resource update increased the combined measured and indicated ounces and the Pit shape will differ due to changes of the pit slope based on the 2013 geotechnical study and other factors. Optimization studies will also be carried out, using various equipment types, scheduling and stockpiling scenarios.

Table one summarizes some of the key factors that need to be considered for the new study and how they compare to 2011. Some will be positive like the USD:BRL exchange rate and steeper footwall slopes in the planned pit, other factors such as the need to line the tailings dam and higher energy prices will increase costs, whereas the gold price has remained fairly neutral. We await the results of this study to see how all these factors effect the overall economic model.

Table 1: 2011 PFS criteria compared with the current update in progress ^(1):

Category	2011 PFS by Coffey		2017 PFS (provisional)
Exchange Rate USD:BRL	1.9		3.2(2)
Pit Slope (inter-ramp slope)	67 deg HW 40 deg FW		65 deg HW 48 Deg FW (3)
Resource M & I combined 0.5g/t cut-off	1,174,900 ozs Au