Amarillo Reports 2017 Fourth Quarter and Annual Results and Provides Corporate Update

TORONTO, April 30, 2018 (GLOBE NEWSWIRE) -- In a release issued under the same headline earlier today by Amarillo Gold Corporation (TSX.V:AGC), we are advised by the company the wrong version of the release was distributed. The completed corrected text follows. 

Amarillo Reports 2017 Fourth Quarter and Annual Results and Provides Corporate Update

Amarillo Gold Corporation (“Amarillo” or the “Company”) (TSX.V:AGC) today announces its financial results for the fourth quarter (“Q4”) and year ended December 31, 2017. This press release should be read in conjunction with the Company’s consolidated financial statements and Management’s Discussion & Analysis (“MD&A”) for the year ended December 31, 2017, available on the Company’s website at and under the Company’s name on SEDAR at All monetary amounts are expressed in Canadian dollars unless otherwise specified.

Mike Mutchler, CEO, remarked; “2017 was a year of reorganization for Amarillo.  The changes at the management and board levels have better positioned the Company to execute on the Mara Rosa project development.  2018 will see an update to the Mara Rosa Pre-Feasibility Study to incorporate the findings from a Whittle Consulting Optimization Study, and a 10K meter exploration drilling program to expand the Mara Rosa Ore Reserve prior to launching a Feasibility Study in early 2019.  This year will also see expanded exploration activities at the prospective Campos Verde and Amaralina properties near Mara Rosa, and at the Matilde, Butia, Caneleira and Zeca Souza exploration properties at the Lavras do Sul Project.  With the completion of our recent financing, we are well positioned to execute on all of these activities.  I would like to thank our shareholders, dedicated employees and local communities and government in Brazil for their continuing support, as we look forward to a very exciting year for the Company.”


  • Completed a corporate management reorganization
  • Completed an Updated Pre-Feasibility Study at Mara Rosa, Brazil¹
    • Post-tax net present value using 5% discount rate of US$178M @ $1,200 per ounce gold
    • Post-tax internal rate of return (IRR) of 35.2%
    • Post-tax project payback of 2.2 years;
    • Average Life of Mine production 112,000 ounces per year over 8 years.

    ¹ NI 43-101 report entitled “2017 Updated Pre-Feasibility Study Posse Mine Project – Mara Rosa GO” prepared by SRK Consulting dated April 2017. The qualified persons of the  report are Gregory Keith Whitehouse and Rubens Jose de Mendonca. Both individuals are independent of the Company.           
  • Engaged Whittle Consulting for an Optimization Study on the Mara Rosa Gold Project.
  • Extended the maturity date of its gold-linked credit facility from July 31, 2019 to June 30, 2022.
  • Closed a private placement for $5.2M.
  • Initiated a drilling program for Mara Rosa with the intent to extend the mine life to over 10 years.

The Company underwent board and management changes during the year and subsequent to the year end. The Board was enhanced through the addition of Rowland Uloth as the Executive Chairman, and Stephen Stow and Colin Sutherland as Independent Directors. Mike Mutchler joined the Company in January 2018 as President & CEO and Hemdat Sawh joined as CFO in November 2017. This team has the necessary background and experience to execute the development of the Mara Rosa Project and realize the potential of Lavras do Sul with increased exploration in 2018 and beyond.

In January 2018 the Company initiated a Whittle Consulting Optimization Study. We expect to incorporate the study findings into a Pre-Feasibility Study update early in Q3 2018.

On April 12, 2018 the Company closed a non-brokered private placement (the “Private Placement”) through the issuance of 18,427,780 units (“Units”) at a subscription price of $0.28 per Unit for aggregate gross proceeds to the Company of $5,159,778. Each Unit is comprised of one common share (each, a “Common Share”) and one-half of one Common Share purchase warrant (each, a “Warrant”). Each whole Warrant entitles the holder to purchase one additional Common Share at an exercise price of $0.38 for a period of 24 months following the date of issue, subject to customary adjustment provisions. The Company intends to use the net proceeds from the Private Placement for advancing the Company’s mineral exploration and development projects, and for general corporate purposes.

The Company plans additional exploration drilling at Mara Rosa starting in May 2018 followed by an updated mineral resource which will be produced prior to launching a Feasibility Study (“FS”) in early 2019.  Following the FS and Basic Engineering (“BE”) in early 2019, Amarillo will make an application for the Installation Permit – (LI or Licença de Instalação) and expects to begin construction of the Mara Rosa Gold Mine in 2020.

At Lavras do Sul, additional exploration work consisting of soil sampling, trench sampling and airborne magnetic surveying will be conducted on properties adjacent to the Butia project in an effort to explore for an extension of the Butia deposit.


Operating Expenses – Three and Twelve Months 2017 and 2016
  Three Months ended December 31   Year ended
December 31
  2017   2016     2017   2016  
Consulting fees 440,733   459,269     893,376   645,419  
General and administrative 75,429   57,030     334,796   237,667  
Stock-based compensation 239,510   -     990,573   641,241  
Professional fees 77,033   30,091     267,560   170,105  
Other expenses 64,558   163,262     216,390   303,338  
Subtotal before other items 897,263   709,652     2,702,695   1,998,490  
Accretion on gold loans 325,987   375,945     1,288,023   1,119,546  
Subtotal of expenses before Fx and FV changes 1,223,250   1,085,597     3,990,718   3,118,036  
Foreign exchange loss/(gain) (844,878 ) (164,626 )   (811,538 ) (131,374 )
Loss/(gain) on FV of derivatives 107,431   (1,276,657 )   1,110,085   557,586  
Loss/(income) before taxes 485,803   (355,686 )   4,289,265   3,544,248  
Deferred tax 486,165   233,330     486,165   233,330  
Net loss/(income) 971,968   (122,356 )   4,775,430   3,777,578  
Loss per share (0.01 ) 0.00     (0.06 ) (0.05 )
Total assets 34,186,492   34,246,927     34,186,492   34,246,927  
Total non-current liabilities 11,050,397   8,798,174     11,050,397   8,798,174  

The Company’s loss is mostly attributable to the items related to the gold-linked loan consisting of accretion, mark to market adjustments for gold price increase and foreign exchange gains due to strengthening of the Canadian dollar to the US dollar from the previous reporting periods. In February 2018, the Company announced that it had amended and extended the maturity date of its existing gold-linked credit facility (the “Facility”) from July 31, 2019 to June 30, 2022.

The technical content of this release has been reviewed and approved by Frank Baker, Project Manager of the Company and a "Qualified Person" as defined in National Instrument 43-101 -Standards of Disclosure for Mineral Projects.


Amarillo is developing a highly economic, open pit gold resource at its Mara Rosa Project in the mining friendly jurisdiction of Goias State in Brazil. An Updated Pre-Feasibility Study (NI 43-101 technical report) for the Mara Rosa Project was filed on SEDAR on May 4, 2017.  In addition, Amarillo has an advanced exploration project with excellent grades at Lavras do Sul, also in Brazil. A Mineral Resource Estimate Study (NI 43-101 technical report) for Lavras do Sul was filed on SEDAR on October 4, 2010.  Both projects have excellent nearby infrastructure. The Mara Rosa Project was awarded the main permit (LP) that gives social and environment permission to mine. This has allowed Amarillo to move forward and work on the installation permit (LI) for the Mara Rosa Project.

For further information, please contact:
Mike Mutchler or Karen Mate  
President & CEO   External Communications  
416-294-0736   416-230-6454  
This email address is being protected from spambots. You need JavaScript enabled to view it.    This email address is being protected from spambots. You need JavaScript enabled to view it.  
32 Richmond St. East       
Suite 201 Toronto, ON      
Canada, M5C 1P1      

Neither the 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.


This news release contains Forward Looking Statements regarding the Company’s current expectations regarding future events, including with respect to the Company’s business, operations and condition, management’s objectives, strategies, beliefs and intentions. Various factors may prevent or delay our plans, including but not limited to, the trading price of the Common Shares, certain lenders not advancing funds as required, 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. Readers should review the Company’s ongoing quarterly and annual filings, as well as any other additional documentation comprising the Company’s public disclosure record, for additional information on risks and uncertainties relating to these forward-looking statements. Readers should also review the risk factors applicable to junior mining exploration companies generally to better 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 me be required by law.


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