Amarillo Gold Corporation (TSX-V: AGC) (OTCQB: AGCBF) is pleased to provide encouraging drill results from the ongoing drilling program at its Posse open-pit gold project in Goias State, Brazil

Highlights¹:

• 1.66 Au g/t over 24 m core length in in-fill drill hole 18P067
• 2.40 Au g/t over 15 m core length in in-fill drill hole 18P067
• 1.56 Au g/t over 15 m core length in in-fill drill hole 18P068
• 3.17 Au g/t over 15 m core length in in-fill drill hole 18P081
• 1.78 Au g/t over 22 m core length in step-out exploration drill hole 18P070
  ¹Drill core lengths and true widths are indicated in Table 1a below

In May 2018, the Company commenced a 10,000 m drill program at the Posse deposit which included 7,000 m of core drilling and 3,000 m of RC drilling designed to convert some of the existing 330K ounces of Inferred resources to Indicated resources and to explore for additional resources along the 12 km long Posse trend.

In September 2018 the core drilling program was expanded to 12,000 m of in-fill drilling and 3,000 m of step-out exploration drilling to test the continuity of the Posse deposit along strike to the southwest of the main deposit, while the RC drilling program was reduced to the then completed 1,295 m.

A total of 11,915 m of diamond drilling from 41 holes have been completed to date (see also results from 19 diamond drill holes in our Press Releases dated September 10, 2018 and October 31, 2018). Drilling assay results of 2.40 g/t Au over 15 m core from in-fill drill hole18P067 and 3.17 g/t over 15 m core from in-fill drill hole 18P081 confirm better than average ore grade and good deposit width in the southern section of the ore body.

Encouraging results from exploration drill hole 18P070 were obtained having intersected 1.78 g/t Au over 22 m and suggesting continuity of the Posse deposit over 200 m southwest along strike.

The remaining 700 m of in-fill core drilling will be completed in early January 2019 and a new Resource Update is planned for release in February 2019. The final 2,400 m of step-out exploration core drilling is also expected to be completed in February.

Please click on the attached link to view the drill hole locations:

https://www.amarillogold.com/W0p23B/wp-content/uploads/2019/01/Mara-Rosa-Map-Drilling-Program-Update-Jan-2019.jpg

Mike Mutchler, CEO of Amarillo commented, “We are quite excited with our latest drilling results. The better grades and thicknesses that we are seeing in the southern portion of the planned pit confirm what we expected from our block model and should allow us to convert a significant portion of our Inferred ounces into Measured or Indicated ounces to extend the planned mine life from eight to ten-plus years by pushing further down dip. These drilling results, along with the final results that will be available over the next few weeks, will be used for a Resource Update in February and will be the basis for the mine design for the Feasibility Study which we will be starting later this month.”

Mike Mutchler continued, “Although we only have the first of our step-out drill holes completed, the success of this hole is showing a potential extension of the Posse orebody southwest along strike and could eventually allow for a pit expansion in that direction to further increase the mine life.”

The 2018 RC drilling program completed 1,295 m from 15 holes, including 1 twinned hole in the southeast sector. The results from this shallow overburden drilling are generally sub-economic and the remainder of the planned 2018 RC drilling in the northeast sector was replaced with shallow in-fill diamond drilling due to RC drilling technical issues where sample recovery and dilution are thought to have possibly been a factor in the weaker results.

ABOUT AMARILLO

Amarillo is developing an open pit gold resource at its Mara Rosa Project in the mining friendly jurisdiction of Goias State in Brazil. The Mara Rosa Project was awarded its main (LP) permit which provides the social and environment permission to mine. Amarillo is progressing toward obtaining an installation permit (LI). Based on the NI 43-101 Pre-Feasibility Study 2018 (PFS 2018) update filed on SEDAR on September 13, 2018, the Posse Deposit at the Mara Rosa Project contains estimated 513,000 ounces of gold in the Proven category from 9.6 Mt at 1.65 g/t Au, and 574,000 ounces gold in the Probable category from 14.2 Mt at 1.26 g/t Au, for total estimated Reserves of 1,087,000 ounces from 23.8 Mt at 1.42 g/t Au. In addition to the Mara Rosa Project, Amarillo has an advanced exploration project with excellent grades at Lavras do Sul, Brazil. A Mineral Resource Estimate Study (NI 43-101 technical report) for Lavras do Sul was filed on SEDAR on October 4, 2010. The Lavras do Sul Project is an advanced exploration stage property (190 sq. km.) comprising of more than 22 prospects centered on historic gold workings. The initial resource estimate at the Butia prospect reported 215,000 ounces of gold in the Indicated category from 6.4 Mt at 1.05 g/t Au, and 308,000 ounces of gold in the Inferred category from 12.9 Mt at 0.74 g/t Au using a 0.3 g/t cut-off grade. Both projects have excellent nearby infrastructure.

Mike Mutchler, President and Chief Executive Officer of the Company, is a Qualified Person as defined by NI 43-101 guidelines, and has reviewed and approved the scientific and technical disclosure relating to the PFS 2018 in this section of the news release.