Amarillo Gold Drills New Gold Mineralisation North and Adjacent to the Posse Deposit, Mara Rosa Project, Brazil. Highlights Include 22m @ 1.14 g/t Au

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 4, 2012) - Amarillo Gold Corp. (TSX VENTURE:AGC) ("Amarillo" or the "Company") is pleased to announce the following drill results from exploration drilling immediately to the north of the Posse deposit. Near surface gold mineralization has been encountered, partially in the planned pit wall, which is still open to the north and at depth.

Results from eight holes are shown in Table 1. Notable results included 2011-MRP 0007 which intercepted 13m @ 1.83 g/t Au from 6m depth, 2011-MRP 0008 which returned 22m @ 1.14 g/t Au from surface and 2012-MRP 0019 that intersected 13m @ 1.28 g/t from 58m down hole depth. These holes are up to 150m from the current pit wall and are spaced 50m apart.

Buddy Doyle, CEO of Amarillo said, "Finding new, near surface gold mineralization at the Mara Rosa project is our main exploration priority. The goal is to search for near surface ounces in the vicinity of the Posse deposit that could be processed in the plant while the pre-strip occurs. This could provide a significant boost to the project's economics. It is encouraging that we have encountered gold mineralization in the first stage of this exploration strategy."

Also noteworthy is the silver mineralization encountered in drill hole 2012 MRP0021 at surface, which is separate and distinct to the known gold mineralization. This result presents a new target for exploration. It is not yet evident if this separate silver zone will have economic significance.

Table 1 Summary of drill hole results.
Hole No.	Total Depth (metres)	Azimuth/ Dip	From (metres)	To (metres)	Width (metres)	Grade (g/t Au)	Grade (g/t Ag)
2011-MRP0005	170.23	140°/-60°	55	57	2.0	1.28
			100	112	12.0	0.64
2011-MRP0007	90.35	140°/-60°	6	19	13.0	1.83
		including	17	18	1	7.60
2011-MRP0008	99.89	140°/-60°	0	22	22.0	1.14
2011-MRP0009	90.40	140°/-60°	No significant intersections
2011-MRP0011	130.47	140°/-60°	No significant intersections
2012-MRP0016	89.38	140°/-50°	3	7	4.0	0.93
2012-MRP0019	130.67	140°/-60°	58	71	13.0	1.28
		including	59	60	1	5.71
2012-MRP0021	176.13	140°/-60°	0	5	5.0		41.7
			110	111	1.0	1.04
			120	121	1.0	0.52
			132	134	2.0	0.55
			141	148	7	0.56

Notes: All drill hole samples shown here consist of split HTW and NTW diamond drill core. The samples are sent to Acme Laboratories in Goiania, Brazil, for preparation and then to Vancouver, Canada where, samples are first subjected to a multi-element ICP assay that includes Au and then sent to fire assay for Au using 30g aliquots. If the grade is higher than 5 g/t, a gravimetric method is used. All samples are subject to a chain of custody and are submitted with standards and blanks to check the assay results. The laboratories also use internal standards and repeat analysis. For the results reported in this release all the standards, blanks and repeats delivered acceptable results. Intercepts were calculated using a minimum of a 0.5 g/t cut off at the beginning and end of the intercept and allowing for no more than 10 consecutive metres of less than 0.5 g/t Au. The true width of these intercepts will be 10% of the widths encountered in the drill holes, if the dip of the mineralization is the same as the Posse deposit at 45 degrees.

The location drill holes reported here, in relation to the holes drilled at the Posse deposit can be viewed in three dimensions and by section on the Company's website at www.amarillogold.com or at http://www.corebox.ca.

The Company currently has one drill rig conducting exploration in the Posse deposit area. The drilling is focused on testing the "Posse" structural trend, a large regional structure that hosts the Posse deposit. The structure has been defined by mapping, geophysics and soil geochemistry and it has a strike of over 20km. The current Posse drilling also represents condemnation drilling as it addresses geochemistry and structural targets within the area of the planned mine layout. Approximately 8,000 metres of drilling are contemplated as part of this exploration/condemnation program.

The author of this news release is Buddy Doyle, a member of the AUSIMM, and a geologist of 30 years experience. The NI 43-101 compliant qualified person for this news release is Kevin Kivi, P.Geo.

About Amarillo Gold Corp.

Amarillo Gold Corp. is focused on acquisition, discovery, and definition of gold resources in Brazil. The Company's principal projects are the Mara Rosa Project in the state of Goias, and the Lavras do Sul Project in the state of Rio Grande do Sul. The Posse Deposit at Mara Rosa contains 1,174,900 ounces of measured and indicated gold contained in 20.85 MT at 1.75 g/t Au, and 156,400 ounces of gold inferred from 3.63 MT at 1.38 g/t Au (0.5 g/t cut-off grade) (NI 43-101 compliant resource as independently determined by Australian Exploration Field Services Pty. AEFS). The Mara Rosa Gold Project has received a positive economic assessment from a Pre-feasibility study and is preparing to proceed to a bankable feasibility study. Should this continue to be positive it would be possible to commence mining by 2014.

The Posse Deposit was successfully mined by Western Mining Company (WMC) during the 1990s (mined areas are excluded from the above-stated resource figures), and is located in an area of excellent infrastructure: approximately 35 km NE of Yamana's Chapada open pit Cu-Au operation, some 80 km NE of Yamana's Pilar Au project (in Feasibility), 95 km NW of Votorantim's Niquelandia Ni laterite mine, 105 km from NE of Anglogold-Ashanti's Serra Grande underground Au mine, and 105 km NNW of Anglo American's Ni laterite project at Barro Alto.

The Lavras do Sul Project is an advanced exploration stage property (190 sq. km.) comprising more than 19 prospects centred on historic gold workings, with encouraging gold mineralization discovered and defined by more than 16,000 metres of drilling. The initial resource estimate at the Butia prospect reported 215,000 ounces of gold indicated from 6.4 MT at 1.05 g/t Au, and 308,000 ounces of gold inferred from 12.9 MT at 0.74 g/t Au using a 0.3 g/t cut-off grade in a NI 43-101 compliant resource as independently determined by Atticus Consulting 2010. Lavras do Sul is also located near excellent infrastructure. The Company also has a portfolio of earlier stage projects and all properties under Amarillo's management are located in areas of good infrastructure and mining-friendly communities.

ON BEHALF OF THE BOARD OF DIRECTORS

AMARILLO GOLD CORP.

Buddy Doyle, President

FORWARD LOOKING STATEMENTS:

This news release contains Forward Looking Statements regarding our intentions and plans. Various factors may prevent or delay our plans, including but not limited to, 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. The company has not made any studies towards determining if the gold mineralisation mentioned in the news release north of the Posse deposit, can be economically exploited at this stage. This work is still in the exploration stage. The company plans to drill 8000m in exploration drilling but this will be dependent on financing and contractor availability. Permission from the government and community is also required to proceed with future mining production. Readers should review risk factors applicable to junior mining exploration companies generally to understand the variety of risks that can affect the Company.