Amarillo News I like it! This stock will outdo AQI. It is in a more mining friendly climate IMHO, as far as I know no litigation, lot of ounces there.
2005-06-07 16:46 ET - News Release
Mr. Buddy Doyle reports
AMARILLO MAILS INFORMATION CIRCULAR, SETS DATE FOR AGM.
Amarillo Gold Corp. has now mailed to its shareholders the management proxy materials for its 2005 annual general and special meeting. The meeting is set to take place on June 30, 2005, at 10 a.m. at Suite 950, 1055 West Georgia St., Vancouver, B.C.
At the meeting, management will ask shareholders to pass an ordinary resolution, ratifying, confirming and approving the purchase of all the issued and outstanding shares of Metallica Brasil Ltda. from De Re Holdings Inc., a wholly owned subsidiary of Metallica Resources Inc. (the vendor), the primary asset of which is the Mara Rosa gold project, located in Goias state, Brazil, in consideration of the payment of $450,000 (U.S.). The transaction is subject to TSX Venture Exchange approval.
To recap, on Oct. 21, 2003, Amarillo entered into an agreement with the vendor, an arm's-length party to the company, for the purchase of all of the issued and outstanding shares of Metallica Brasil, a wholly owed subsidiary of the vendor. The primary asset of Metallica Brasil was the Mara Rosa gold project, located in Goias state, in central Brazil. The acquisition of the Mara Rosa project triggered a classification of reverse takeover (under new Toronto Stock Exchange rules introduced in 2004), and the company's main focus during 2004, and early 2005, has been to diligently work through the RTO process to which end an information circular was submitted to the TSX.
Under the terms of the acquisition agreement, the company was to pay the vendor $450,000 (U.S.) for 100 per cent of the shares of Metallica Brasil. Underlying interests on the Mara Rosa project include two separate 1-per-cent net smelter return royalties to Newmont Mining Corp. and BHP/Billiton, respectively. Amarillo arranged for the finalization of the purchase and will own the project 100 per cent at the completion of the RTO process, given exchange and shareholder approval.
The Mara Rosa project, which includes the historic Posse gold resource, is the subject of an independent technical report prepared by B. Terrence Hennessey, of Micon International Ltd., in December, 2003. The technical report was prepared in accordance with National Instrument 43-101 and can be viewed on SEDAR.
In 1997, Metallica Brasil estimated a mineral resource for the Posse south lode within the Mara Rosa project which was not compliant with National Instrument 43-101, Section 2.4, since it was prepared prior to the implementation of this National Instrument. This historical estimate was made after relogging approximately 8,100 metres of core and remapping exposures in the pit. Shallow reverse circulation and blast holes from the pit were also used. The estimate was performed using ordinary krieging and a 10-gram-per-tonne top cut, and was reported at a one-gram-per-tonne cut-off grade, down to 300 metres below surface. The resulting Posse mineral resource estimation is presented in the table below. Metallica Brasil did not state which reporting code it used, but it did say that it followed "industry standards" at the time.
Category* Tonnes Au Contained Au
(thousands) g/t ounces
Measured 6,385 1.81 372,300
Indicated 4,948 1.67 265,700
Inferred 1,417 1.94 88,500
Totals 12,750 1.77 725,643
*not compliant with National Instrument 43-101
The above estimates, while prepared prior to the implementation of National Instrument 43-101, are considered worthy of mention since they were compiled by an independent consultant, Pedro Gusman, of PGV Consultores in Chile, who was also contracted by Barrick Minerals in 1996 and 1997, while Barrick carried out due diligence on the property. In this instance, a similar resource estimate of 15.47 million tonnes at 1.47 grams per tonne, containing 730,342 ounces of gold using a one-gram-per-tonne cut-off was reported. The similarity of Barrick's due diligence estimate and the estimate by Metallica Brasil suggests that there is a significant gold accumulation on the property. It also demonstrates why the management of Amarillo remains convinced of the potential of the Mara Rosa project.
Amarillo intends to implement an independent review of this historic Posse resource in the near future with the view of restating this resource in the 43-101 framework. At the same time, the company intends to re-evaluate the economic potential of the deposit, which will take into account the significant increase in the gold price and a major devaluation of the Brazilian Real since the 1996 to 1997 period, when Metallica Brasil and Barrick carried out their evaluations.
At the annual general meeting, shareholders will also be asked to approve a private placement, subject to TSX Venture Exchange approval. The placement, originally announced on Nov. 3, 2004, has now been increased to six million units, at a price of 25 cents per unit, each unit consisting of one common share and one-half of one share purchase warrant, with each whole warrant entitling the holder to purchase one additional common share of the company, for a period of 18 months, at a price of 35 cents per share.
Management will also table the standard annual general meeting resolutions for shareholder approval.
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