Mr. Mike Mutchler reports

TRENCHING RESULTS SHOW GOLD ANOMALIES UP TO 8 KILOMETRES NORTHEAST OF POSSE

Amarillo Gold Corp. has noted that results from a surface exploration program support the theory that there are additional near-surface gold deposits along the Posse North gold trend. Since February, 2020, surface work at the company's Mara Rosa property in Brazil has focused on trenching and auger drilling to delineate the higher-grade zones of anomalous gold on surface along the trend. The continuing aim is to identify potentially economic gold deposits that could add to existing resources and reserves, which could enhance the production profile of the Posse gold project.

"We are starting to realize the district-scale potential of the Posse trend," said Mike Mutchler, Amarillo's chief executive officer. "These exciting results are consistent with the results of our successful November, 2019, to February, 2020, drill program, which showed the potential for satellite gold deposits at Mara Rosa.

"A new resource would give us the option to extend the planned life of the Posse mine, expand the plant throughput or some combination of both. This would significantly increase the project's expected returns."

The surface exploration program focused on three targets. Pastinho, Lambari and Estrela are located 3.5 kilometres, 4.5 km, and eight km northeast of the Posse gold deposit along the Posse North trend.

Posse North is a northeast-trending potassium-radiometric anomaly with coincident gold-in-soil anomalies greater than 50 parts per billion defined by previous work. Structural features found by airborne magnetics were also useful guides for targeting.

A mechanical backhoe loader dug three-metre-deep trenches generally at every 200 m. Chip channel samples were taken at one m intervals for each trench, which were oriented in a northwest-southeast direction and perpendicular to the main trend of the gold deposits.

The key findings of the surface exploration program are:

• Surface trenching and auger drilling confirm the up-dip extension of the Pastinho gold target;
• The surface soil anomaly at Pastinho has been defined over a strike length of 1.5 km and remains open along strike to the northeast;
• There appear to be subparallel gold structures with up to five mineralized gold zones trending northeast along the Pastinho target;
• Lambari and Estrela have defined gold anomalies that require follow-up work.

The Pastinho target

Pastinho is 3.5 km northeast of the Posse deposit on 6,000 hectares of new exploration tenements that Amarillo gained access to in December, 2019. It is a gold-mineralized structure approximately 800 m to 900 m long oriented in a northeast-southwest direction along the same structural trend as the Posse gold deposit. The apparent thickness varies from 10 m to 20 m and dips about 60 degrees northwest.

Geologically, Pastinho is similar to Posse. It is characterized by a hydrothermally altered thrusted shear zone developed along the contact between a biotite microcline gneiss (granodiorite composition) and metagabbo and/or amphibolite mafic rocks. There are structural fabrics including mylonites together with hydrothermal alteration minerals like silicification (quartz), biotite, sericite and carbonate with associated disseminated sulphides that are typically 1 per cent to 3 per cent pyrite.

The results of Amarillo's most recent diamond drilling are interpreted to have increased the strike extent to 900 m from the 150 m long zone of near-surface gold mineralization defined by a previous operator. Examples from these drill results include:

• Hole LMR007A -- 18.7 m grading 0.84 gram per tonne gold; it was oriented with an azimuth of 109.1 degrees and a dip of minus 50 degrees;
• Hole 20P109 -- 11 m grading 0.74 g/t gold; it was oriented with an azimuth of 125 degrees and a dip of minus 59 degrees.

Nine trenches were dug totalling 791.6 m and 850 samples were tested over a strike length of 1.5 km (see included table). Highlights of the results include:

• Trench 20TCH001 -- 20 m grading 1.034 g/t Au;
• Trench 20TCH002 -- 11 m grading 0.95 g/t Au;
• Trench 20TCH003 -- 10 m grading 1.22 g/t Au;
• Trench 20TCH004 -- 5.1 m grading 3.27 g/t Au;
• Trench 20TCH009 -- 17 m grading 1.46 g/t Au.

Significantly, the surface trench work has extended the strike length of the Pastinho gold target to 1.5 km. The current interpretation is that the surface trenching program has outlined the up-dip extension of Pastinho. There appear to be up to five subparallel gold structures dipping northwest approximately 50 to 60 degrees. Pastinho, which has been drill tested to a depth of approximately 100 m, remains open at depth.

Lambari

Lambari is located approximately one km northeast of Pastinho and 4.5 km north of Posse. The geological setting of Lambari is similar to the Posse gold deposit and Pastinho.

Surface work consisted primarily of shallow auger drilling, which defined two gold-in-soil anomalies. The first anomaly is located along strike and parallel to Pastinho, and has a strike length of approximately one km. The second gold-in-soil anomaly occurs to the northeast and is parallel to the first anomaly. It has been defined over a distance 1.5 km.

Estrela

Estrela is located about 3.5 km northeast and along trend from Pastinho, and approximately eight km northeast of Posse. Estrela is interpreted to occur along the same structural corridor as Posse and Lambari, and shares similar geology. Work consisted primarily of shallow surface auger drilling and defined a northeast-trending gold-in-soil anomaly over a strike length of 900 m.

Future exploration program

The surface exploration work at Mara Rosa has been successful in better defining the Pastinho, Lombari and Estrela gold exploration targets.

In addition to continuing surface trenching and auger drilling of selected targets, next steps will also include completing a detailed induced polarization ground geophysical survey over each of the targets and a diamond drill program.

Ground geophysics is expected to begin in late September or early October, with a diamond drilling program planned to begin in late 2020 or early 2021. Approximately $1.75-million has been budgeted for exploration at Mara Rosa to the end of 2021.

                                   TRENCHING RESULTS
 
Trench No.  Number of samples  Gold structure  From (m)  To (m)  Length (m)  Gold grade (g/t)

20TCH001                   96               1     23.00   43.00       20.00             1.034      
                                            2     55.00   59.00        4.00             0.320      
20TCH002                   92               1     23.00   34.00       11.00             0.950      
                                            2     54.00   58.00        4.00             0.222      
20TCH003                   98               1     31.00   41.00       10.00             1.220      
                                            2     44.00   55.00       11.00             0.341      
                                            3     72.00   80.00        8.00             0.196      
                                            4     83.00   84.00        1.00             0.705      
                                            5     94.00   95.00        1.00             0.246      
20TCH004                   89               1     20.90   26.00        5.10             3.265      
                                            2     39.00   43.00        4.00             0.271      
                                            3     52.00   53.00        1.00             0.491      
                                            4     55.00   56.00        1.00             5.435      
                                            5     65.00   66.00        1.00             7.275      
20TCH005                   99               1     31.20   39.10        7.90             1.524      
                                            2     50.00   52.00        2.00             0.242      
                                            3     60.00   63.00        3.00             0.544      
                                            4     68.00   71.00        3.00             0.388      
                                            5     80.00   82.00        2.00             1.070      
20TCH006                   76               1     53.30   56.00        2.70             0.919      
20TCH007                   66               1     58.00   59.80        1.80             0.393      
20TCH007A                  32               1      0.00   19.00       19.00             1.431      
20TCH008                   62               1     47.00   55.65        8.65             0.918      
20TCH008A                  30               1     22.00   23.00        1.00             1.642      
20TCH009                  110               1      7.00   24.00       17.00             1.461      
                                            2     29.00   31.00        2.00             0.280      
                                            3     43.10   43.90        0.80             0.686      

Qualified person

Michael Durose, PGeo, consulting geologist for Amarillo and a qualified person as defined by Canadian National Instrument 43-101, has reviewed and approved the scientific and technical information contained in this release.

Quality assurance and quality control

Sample handling, preparation and analysis are monitored through the implementation of formal chain-of-custody procedures and quality assurance/quality control programs designed to follow industry best practices.

Trench channel samples were taken at one m intervals, and placed in a secure sample bag and submitted to ALS Laboratories Inc. in Goiania, Goias, Brazil, for preparation by crushing to 70 per cent passing two millimetres, riffle splitting to obtain 500-gram aliquots and pulverizing to 85 per cent passing 75 microns.

Pulps are shipped to ALS Laboratories in Lima, Peru, and analyzed by a 30-gram fire assay and AAS finish. For assays above 10 parts per million Au, a cut of the original pulp was reassayed with a gravimetric finish.

Certified standards, non-certified blanks and field duplicates are inserted into the sample stream at regular intervals, so that QA/QC accounted for about 10 per cent of the total samples. Results are routinely evaluated for accuracy, precision and contamination.

About Amarillo Gold Corporation

Amarillo is advancing two gold projects in Brazil. Both are in mining-friendly states and have excellent nearby infrastructure. The development-stage Posse gold project on its Mara Rosa property in Goias has received the main permit that provides social and environmental permission for mining. Work is under way on receiving the installation permit. The exploration-stage Lavras do Sul project in Rio Grande do Sul has more than 22 prospects centred on historic gold workings.

We seek Safe Harbor.