Amarillo Gold Corp. Corporate Presentation


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Amarillo Gold Corp. is a mineral exploration company committed to building shareholder value by focusing on the acquisition, discovery, and development, of gold resources in Brazil. The Company’s prime asset is the Mara Rosa Gold Project (100% ownership) in central Brazil, which holds 1,174,900 ounces Au at 1.75 g/t (M+I) and 156,400 ounces Au at 1.34 g/t (Inferred) with a Pre-Feasibility Study near completion as Mara Rosa progresses toward development.

Amarillo's advanced exploration stage project is Lavras do Sul, in Southern Brazil. To date Amarillo has tested 5 of the 19 known prospects at Lavras do Sul and 4 of these have returned significant gold values.

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Amarillo Gold Corp. Corporate Presentation

  1. 1. Emerging Gold Producer in BrazilSource: Amarillo Symbol: AGC TSX-V 72A Frankfurt AMARILLO GOLD
  2. 2. Important Notice These presentation materials (“the Presentation Materials”) are being supplied to you for information purposes only on Amarillo Gold. (the “Company”). These Presentation Materials have been prepared by and are the sole responsibility of the Company. The Company have taken all reasonable care to ensure that the facts stated herein are true to the best of their knowledge, information and belief. These Presentation Materials are being distributed only to and are directed at (a) persons who have professional experience in matters relating to investments being investment professionals as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “FPO”), (b) high net worth companies, unincorporated associations and other bodies within the meaning of Article 49 of the FPO or (c) persons to whom it may otherwise lawfully be communicated (together “Relevant Persons”). Any person who is not a Relevant Person or who does not have professional experience in the matters relating to investments should not act or rely on this document or any of its contents. These Presentation Materials do not constitute, or form part of, a prospectus relating to the Company, nor do they constitute or contain any invitation or offer to any person to underwrite, subscribe for, otherwise acquire, or dispose of any shares in the Company or advise persons to do so in any jurisdiction, nor shall it, or any part of it, form the basis of or be relied on in any connection with any contract. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this document or on its completeness and no liability whatsoever is accepted for any loss howsoever arising from any use of this document or its contents otherwise in connection therewith. Prospective investors are encouraged to obtain separate and independent verification of information and opinions contained in the Presentation Materials as part of their own due diligence. By accepting these Presentation Materials, the Recipient agrees that the information contained herein or sent herewith or made available is for information purposes only. Without prejudice to the foregoing, neither the Company, nor its advisers nor its representatives accept liability whatsoever for any loss howsoever arising, directly or indirectly, from use of this document or its contents or otherwise arising in connection therewith. The distribution of these Presentation Materials in certain jurisdictions may be restricted by law and persons into whose possession these Presentation Materials come should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of any such other jurisdictions. Some statements contained in these Presentation Materials or in documents referred to therein are or may be forward-looking statements. Actual results may differ from those expressed in such statements, depending on a variety of factors. Past performance of the Company or its shares cannot be relied on as a guide to future performance. Any forward-looking information contained in these Presentation Materials has been prepared on the basis of a number of assumptions which may prove to be incorrect, and accordingly, actual results may vary.2 AMARILLO GOLD
  3. 3. Amarillo Gold – Committed to Development • Focused on the acquisition and development of gold resources in Brazil • Major Projects: 1. Mara Rosa – moving towards production – 2011 Pre-feasibility Study underway – 623,000 gold ounces, indicated category – 451,000 additional gold ounces, inferred category 2. Lavras do Sul – major gold prospect in southern Brazil – Continuously upgrading our resource estimate (I+I 520K Ounces) every 6 months or so. – Numerous untested ‘garimpo’ gold targets – Drilling ongoing • Seasoned management team with outstanding discovery & acquisition credentials3 AMARILLO GOLD
  4. 4. Proven Management Team Buddy Doyle – President & CEO • 28 years experience; 23 years with Rio Tinto on numerous global assignments including 13 years as North American exploration manager for diamonds. Exposure to numerous commodities with track record of economic discoveries including: • +30M oz Lihir (Au) deposit discovery/definition team; project leader for the Diavik discovery/ pre-feasibility, >$14B in-situ diamonds • Excellence in Diamond Exploration award in 2007 Rick Brown – Business Development, Director • Exploring South America since 1993; focused on management and property acquisitions • Projects include: Peru- El Hilorico /El Galeno (Au-Cu), Argentina- Calcatreu (Au), Navidad (Ag), Brasil- Mara Rosa (Au) Luis Carlos F. da Silva – General Manager Brazil • 20 years exploration experience in Brazil managing several exploration campaigns • Responsible for drilling off several of Jaguar Mining’s Brazilian gold deposits4 AMARILLO GOLD
  5. 5. Proven Management Team Frank Baker – Project Development Manager • Graduate of Sheffield University with Masters in Metallurgy, over thirty years experience • Taken three mines from Feasibility into production on three continents, South America, Australia and Africa • Most recent job was commissioning a 2million tonne per year Gold mine in Western Australia • Brazilian citizen and fluent in Portuguese, he has just joined the company to lead the Mara Rosa Project Waldemar Opalka- CFO Secretary • BA in Quantitative Economics, Tufts University and MBA, University of Massachusetts • former Director of Strategy and Corporate Development at Netia S.A., founder and Managing Director of Polish Broadband LLC, a telecommunications company5 AMARILLO GOLD
  6. 6. Non-Executive Directors Robert Landis, Chairman • Princeton University, Harvard Law School • Independent investor & member of Golden Sextant Advisor LLC • 10 years Merrill Lynch, 8 years corporate & securities attorney Todd Bruce • Extensive international mining and mine development experience • Previously President and CEO of IAMGold (96-03) and Crystallex (03-07) Mike Durose • Mineral Economist (P.Geo.), former mining analyst (BMO Nesbitt etc.) • Nearly 20 years capital market and mineral exploration experience Patrick Power • 20 years of Venture exchange experience, founder of numerous Venture Co. Companies. Practical regulatory experience. • Over $100m in money raised under his tutelage Through this strong team and their contacts, AGC has been able to finance independently.6 AMARILLO GOLD
  7. 7. Brazilian Opportunities Beckon• Politically mature• Economically stable (investment grade)• Mining friendly with a significant mining community• Foreign investment & personnel welcome• Excellent exploration potential (see table below) Canada Australia Brazil Archean shield (km2) 2,200 1,200 2,600 Production through 1990 (tonnes) 7,600 6,800 2,400 Exploration investment (1970-1990) ($M) $4,968 $2,963 $685 Exploration investment per km ($/km2) $2.26 $2.47 $0.26 Production per $ invested in exploration $1.53 $2.29 $3.50 Source: Mineral Economic Group 20057 AMARILLO GOLD
  8. 8. Project Locations - Brazil Our projects are located in areas of EXCELLENT INFRASTRUCTURE MARA ROSA PROJECT • Federal highway, 320km from Brasilia • Hydroelectric grid power • 35km from 4M oz Chapada mine (Yamana) • 62km from the 1.5M oz Pilar Mine (Yamana) • 100km from 1M oz Serra Grande mine (AngloGold / Kinross) LAVRAS DO SUL PROJECT • Tarmac highway, 320km from Porto Alegre • Hydroelectric and thermal grid power • 70km from coal mining8 AMARILLO GOLD
  9. 9. Mara Rosa Project - Moving Towards Production Posse Gold Deposit The Posse deposit is a Shear hosted gold deposit, with a gneiss hanging wall and greenstone foot wall dipping at 47 degrees to the NW. Source: Google Earth Au mineralization coloured, Looking NE hotter colours higher grades. Source: Amarillo9 AMARILLO GOLD
  10. 10. Exploration Potential Posse Posse K-Channel airborne gamma Soil Geochem, red colours Top 5% of the data Chapada 5km Imbricate Thrust model Geology of the Mara Rosa Area: Greens are the Mara Rosa Belt, volcanic and sediments, Neo-Proterozoic in age, pinks represent gneisses. Gold stars are gold occurrences and garimpos. Amarillo Land holdings shown.10 AMARILLO GOLD
  11. 11. Key Land Position in Competitive Belt Mara Rosa Project • 62,500 ha of exploration permits • 2,600 ha of mining permits • Encompasses the majority of the main trend hosting the Posse • 12 km co-incident K-channel /Au soil anomaly • 5 large mines within 100 km radius • Yamana’s Chapada Cu-Au 35 km • AGC 100% title on all but 4 permits • 2% NSR on Posse trend Town of Mara Rosa • Local community supportive • Environmental certificate from govt.11 AMARILLO GOLD
  12. 12. History Mara Rosa Project 1700’s - Portuguese mining gold 1982 - BHP discovers Posse deposit 1988 - heap leach operation commences 1989 - WMC acquires Mara Rosa project* 1992 - 600 tpd CIL plant commissioned Source: Amarillo 1995 - WMC ceased operations 1998 - WMC sells to Metallica for $1.5 M 2003 - AGC buys Metallica Brasil for $0.45 M *1989-1995 WMC mined 86,000 oz Au oxide and sulphide. Source: Google Earth12 AMARILLO GOLD
  13. 13. Outstanding Infrastructure Mara Rosa Project Sub-Station 4km from Posse Serra Mesa Hydro 450MW Entrance to Mara Rosa Village Turn off to Posse Deposit Chapada mine 32km away BR-153 major N-S Highway Source: Amarillo Source: Yamana website13 AMARILLO GOLD
  14. 14. Posse Deposit Resource Estimate Mara Rosa Project  43-101 compliant based upon 234 drill holes (24,930 metres)  70% of the tonnage lies within 200 metres of surface Cut-off = 0.50 g/t Au Average Ounces Au Tonnes Grade (‘000) Indicated 11,900 1.62 g/t 623,000 Inferred 10,000 1.38 g/t 451,000 Indicated & Inferred Mineral Resource at Posse Deposit Source: AEFS May 2010 – 43-101 accredited14 AMARILLO GOLD
  15. 15. Posse Economic Assessment Mara Rosa Project Pit shell $900 / oz Au • CAPEX (2 mtpa plant) $80 M NPV 5 $154 M • Mining /Milling costs $9.00/tonne IRR +25% • CIL recovery 80% ROI < 2.5 years • Selling costs 4% Cost/oz $543 • Approx. US/Real 1.85 Whittle Pit Shells $1000 $900 $800 $700 ($/oz Au) Colours are gram/m of gold, purple 75 g/m, green 25 g/m Preliminary Economic Assessment completed by CCIC in March 2008 (See slide 3 for NI 43-101 disclosure) 15 AMARILLO GOLD
  16. 16. Metallurgy is the Key Cyanide Leach in GOLD Grinding Milling 45- Pre-Ox PSA unit 75 microns Vat Carbon mat 12 hr 24 hr Conventional Ball Mill residence residence The Company expects the addition of the Pre-Ox to increase the CAPEX by less than $1m compared to a similar circuit without the PSA unit. GOLD The Company’s current estimate on operating costs is $19.3/t (including strip) Dore for the 45 micron circuit which assumes 5% dilution. This equates to $463/ounce. These are in-house estimates and will vastly improve on completion of the PFS. 93% recovery Pre-tax. At 45 microns The Posse Deposit is semi-refractory in nature, due to Further testing underway looking at Telluride. The key is to oxidize the Telluride. This optimum grind size, variations with 88.5% releases the gold. Recent tests have determined at grade and testing different parts of recovery at 75 the right Ph (11) and residence times for the pre-ox, by the mineralized zone. Final report microns altering the grind size >90% recoveries are achieved. due by end of first Quarter 2011. This is much better than the 80% used in the PEA.16 AMARILLO GOLD
  17. 17. Moving Mara Rosa Forward In 2011 Mara Rosa Project • Final Metallurgical report and circuit due in Q1 11. • New Resource estimate Q2 11. • Final PFS report Q3 11, being led by Coffey Mining Pty. • PFS moves to Feasibility and then Decision to Mine Q1-Q2 2012 • Estimated Mine build will be 18 months. • Exploration continues from Q2 11 with one drill rig. Source: Amarillo One of the three rigs currently working at the Posse deposit Mara Rosa Project17 AMARILLO GOLD
  18. 18. Lavras Do Sul Project Left: Cerro Rico gold processing plant, Centre: Drill rig Butia prospect Bottom: main entrance to villageSource: Amarillo18 AMARILLO GOLD
  19. 19. 300 Years of Mining History Lavras do Sul • Several periods of mining from 1700’s through to 1950’s • 1st wave 1780s 2nd wave 1880s alluvials and soils • 2nd wave 1900s hard rock 3 central stamp mills • 3rd wave 1930 Hydraulics • 1980’s – First exploration drilling campaign (CBC & CRM) • 2005 – Rio Tinto drilled ~3,000 m • 2006 – Amarillo acquires initial interest • 2007 – Completes airborne magnetics over Lavras intrusion • 2008 – Drills 232 m @ 1.95 g/t Au at Butiá target 19 garimpos throughout the mining district Source: Diary of a German mercenary in Brazil, painting from gold rush days 1880’s19 AMARILLO GOLD
  20. 20. Exploring the Lavras Intrusion Lavras do Sul • Over 19,000 ha in the state of Rio Grande do Sul • 10 x 10 km (rock-type) intrusive • Abundant gold targets (abandoned garimpos) • New gold occurrences being discovered • First systematic exploration approach to Lavras • Two primary deals, Rio Tinto and IAMGOLD. These are detailed in the appendix • Amarillo has pathways 100% but there are back-in rights and Royalties Images from Lavras do Sul Top: Process plant from 1900’s gold rush Middle: Drill core logging on farm Bottom: View from company office village of Lavras do Sul Source: Amarillo20 AMARILLO GOLD
  21. 21. LAND DISPOSITION Lavras do Sul Yellow is CBC ground part of Rio Tinto deal. Magenta is Lucia ground part of the Rio Tinto deal. Grey is the IAMGOLD deal.21 AMARILLO GOLD
  22. 22. Numerous Targets – 19 Garimpos Lavras do Sul ADVANCED TARGETS (with highlighted Au drill results) Old Gold Workings CERRITO 135.5m @ 0.85 g/t CANELEIRA 37m @ 1.17 g/t PARADAO 12m @ 4.54 g/t BUTIA 120 m @ 3.23 g/t Digital Elevation in grey, roads in black. Colour image: airborne magnetics showing geology and structure.22 AMARILLO GOLD
  23. 23. Butiá prospect initial resource estimate Lavras do Sul 0.3g/t cut Tonnes Grade (g/t) Ounces (mt) Indicated 6.4 1.05 215,000 Inferred 12.9 0.74 308,000 Total 22.1 0.88 523,00043-101 compliant interim resource estimate for the Butia prospect 0.3g/t cut-off• This is the first Resource Estimate from one of theProspects at Lavras Do Sul, the Butia Prospect, 1 of 3D Model of19. Butia Zone• Bulk tonnage near surface• High grade zones cut to 10g/t need to go back and Source: Amarillodrill to determine continuity, statistically expected toincrease grade and ounces, but not change thetonnes....2011.• Drill now at Cerrito Prospect, 4 more holes A 50% increase in• The plan is to put an updated resource estimate our resource basewith Butia and Cerrito in early 2011• Next drill target is on IAMgold ground23 AMARILLO GOLD
  24. 24. Cerrito Prospect: Current Drill Project. Lavras do Sul• Bulk tonnage, low grade, near surface gold deposit• Drilling underway with over 15 holes completed; approx. 5,000 m of drilling completed to date• Gold results incl. 71m @ 1.08 g/t, 143.4m @ 0.75 g/t, 56m @ 1.42 g/t • + 300m strike • up to 80m wide • + 120m depth Source: Amarillo24 AMARILLO GOLD
  25. 25. Matilde Prospect: Current Drill Project. Lavras do Sul • Image shows new soil anomaly developed 2.5 km south of Lavras do Sul, 0.3ppm contours. • Named the Matilde Prospect. • It is partially on the IAMgold ground and the CBC ground. 25 AMARILLO GOLD
  26. 26. Aggressive 2011 Program Lavras do Sul • Continue drill program at Butiá & Cerrito • Complete the next NI 43-101 compliant resource estimates for Butiá & Cerrito • Metallurgical testing of ore-grade samples • Drill high-grade Valdo Teixeira & Cerro Rico, Soil anomalies prospects; the plan is to upgrade resource every 8 months. • Continue exploring “garimpo” targets Power Transmission lines nearby Source: Amarillo Nearby mines (coal – 70 km away) Butia prospect looking to Lavras Source: CRM Website26 AMARILLO GOLD
  27. 27. Why Invest in Amarillo Key project milestones in 2011 • Pre-Feasibility Study at Mara Rosa • Continuing 43-101 resource estimates at Lavras do Sul • Vectoring towards a >2 million oz resource base • Generating new exploration 100%-owned projects • Extensive infrastructure in place • Results driven and proven management • Exemplary capital management record • Low market cap compared to Peers, which should change once recognition occurs.27 AMARILLO GOLD
  28. 28. Amarillo Gold Timeline Amarillo Gold Timeline Q4 Q2 Q4 Q2 Q4 Q1 Q1 Q3 Q1 Q3 2010 2011 2011 2012 2012 2013 2014 2014 2015 2015 2 0 5 3 4 11 -1 4 -1 11 12 -1 15 -1 -1 -1 - ay ep eb un an pr - - p- ul ov ec -M -S -A Se -F -J -J -J N D 29 17 21 25 11 30 15 3- 7- 3- MR* Posse Infill Drilling MR Exploration Drilling MR Pre Feasibility Study MR Feasibility Study MR Decision to Mine MR Mine Construction MR Mine Production LDS** Exploration Drilling LDS Resource Drilling MR* (Mara Rosa) LDS** (Lavras do Sul) • Metallurgical work on each project every 6 months. • PEA to commence (Lavras) when resource stops growing or @ 2million ounces, whichever comes first. • Other Properties: General Exploration28 AMARILLO GOLD
  29. 29. Corporate Information Capital Structure View from the Butia prospect Shares outstanding 62.8 million Options (average 81c) 1.8 million Market cap. @ $1.53 $98.6 million Major shareholders Board & Management 15% Institutions 40% Mid-tier Producers 7% Source: Amarillo Recent Financings Closing No. Shares Issue Price Warrants Amount May-11 6.7M $1.50 3.3M $10M Jul-10 8.0M $0.75 None $6M Jul-09 3.0 M $0.70 None $2.1M Oct-08 2.1M $0.80 None $1.68M May-07 6.0 M $1.25 None $7.5M TOTAL $27.2829 AMARILLO GOLD
  30. 30. Further Information Canada: Brazil: Buddy Doyle Rick Brown President and CEO Business Development Suite 1818 701 W. Georgia St. Rua Pernambuco 353, sala 409 PO BOX 10144 Bairro Funcionarios, Belo Horizonte, MG Vancouver BC Canada V7Y 1C6 Brasil CEP 30130-151 Tel: 1-604-689-1799 Tel: +55 31 3261 5974 Fax: 1-604-689-8199 Lawyers: Auditors: Clark Wilson LLP MSCM LLP (Moore Stephens) 800 – 885 West Georgia Street 8th Floor, 701 Evans Avenue Vancouver, BC V6C 3H1 Canada Toronto, Ontario M9C 1A3 Canada Source: Amarillo30 AMARILLO GOLD
  31. 31. Rio Tinto Agreement Lavras do Sul Summary of Acquisition terms: - Amarillo must make total payments of US$ 2.07 million through various installments up to April 1(st) 2008 in order to acquire an initial 60% interest in the Property. Completed - Amarillo is required to spend US$ 750,000 on exploration prior to Feb. 1st, 2008. Completed - Upon completing the above payments Amarillo will form a Joint Venture with the underlying owners. If the other parties elect not to contribute then Amarillo will earn a 100% interest in the Property and be required to pay a 1.5% Net Smelter Royalty on production. Letter of intent signed, full formal document in progress. - Amarillo will make a US$ 1,000,000 payment to Rio Tinto within 90 days of a bankable feasibility study being delivered and, - Amarillo will make a US$ 6,500,000 payment for every one million ounces of recoverable gold reserves that is covered by the 60% equity in the Property over which Rio Tinto have an option. - Rio Tinto will have a back-in-right to acquire 70% of Amarillo interest in the project by paying Amarillo three times (3 x) their exploration expenditure in the event that Amarillos equity interest in the Property contains in excess of 7 million ounces of recoverable gold. - Amarillo will issue 2,000,000 warrants - exercisable at 50c - to Rio Tinto within 60 days of signing the final agreement. Expired without exercise31 AMARILLO GOLD
  32. 32. IAMGOLD Agreement Lavras do SulAmarillo can earn a 51-per-cent interest by expending $800,000 (U.S.) on exploration over 3 years which willinclude a minimum of 2,000 metres drilling and of which $200,000 (U.S.) must be spent within the first 12 monthperiod. Amarillo has made the $200K milestone and is currently drilling on the IAMGOLD ground. In the event that IAMGOLD elects not to contribute pro-rata funding after the first earn-in period then Amarillomay earn a further 29% interest (for a total of 80%) by funding any mineral resource discovered on the Propertythrough to feasibility study.At the completion of a feasibility study on the Property, and up to a period of 60 days from this date, IAMGOLDmay either• elect to contribute its pro-rata share to future funding OR• dilute its interest to a 2.0% Net Smelter Royalty (NSR), of which 1.0% may be bought back by Amarillo forUS$1,000,000 at any time up to the commencement of production OR• exercise a one-time back-in right to increase its participating interest to 60% - if Amarillo has established a totalmineral reserve in excess of 2.5 million ounces of gold on the Property – and become operator by paying threetimes Amarillo’s exploration costs up to the date of IAMGOLD exercising its back-in right.Border Zone: Brazil has a border defense zone (like most South Am, countries), that extends 150km from the borderwhere more than 50% foreign ownership in any property or business is not permitted. Many foreign companiesoperate in this zone, including Aura (former Yamana assests) and in the recent past Rio Tintos Iron mines as well asmany Foreign owned factories, forestry and agricultural interests. Lavras lies approx. 120km from the border.There is a push to change this law, from 150k to 50km, (it has been altered in the past from 300km to 150km), andthis proposal has already past the senate, and awaits hearing in the lower house. In the meantime Amarillo willpursue the same solutions that other companies have used, which include a combination loans to a Brazilianpartner and contract mining.32 AMARILLO GOLD