Amarillo Gold Corporation has made a significant step toward
building its Posse Gold Mine in Brazil. It has signed a commitment
agreement with Enel Brasil, the state electric power utility, to
build a dedicated power line to the Company’s Mara Rosa Property in
the State of Goiás.
“Once complete, this power line will be a
much-needed lasting legacy, enhancing the power grid infrastructure
of the communities in and around Mara Rosa,” said Arão Portugal,
Amarillo’s Country Manager for Brazil. “It also represents our
commitment to operational excellence and building strong local
infrastructure.”
The 67 kilometre long 138 kilovolt power line will
connect Posse with the Porangatu substation and supply all of the
electricity needed for the project. Amarillo is overseeing the
engineering and permitting process, assisted by Enel. Construction
can start once the permit for the power line is received. It will
cost about BRL$36 million (CDN$9 million) to build and is expected
to take approximately 12 months.
“We have achieved another important milestone in
Posse’s development, even as we wait for the License to Install
(LI) from the state regulators,” said Mike Mutchler, Amarillo’s
Chief Executive Officer.
The governor of the State of Goiás signaled that
work was progressing on finalizing LIs for 14 mining projects in
Goiás during a meeting announcing mining investment in the state on
Monday, January 25, 2021.
Governor Ronaldo Caiado, Secretary for Industry,
Commerce and Services Adionidio Neto, and Secretary of Environment
Andreia Vulcanis signed a Protocol of Intent with other state
officials authorizing the companies to proceed with their proposed
developments in Goiás.
The meeting included state government officials and
other government officials that support mining activities in the
state, representatives of the mining companies, and diplomatic
representatives of the nine countries represented by the
companies.
Amarillo’s Posse Project is one of two new mining
projects set for construction in the state, and the only gold
project. The other 12 projects are expansion projects at existing
operations. The 14 projects represent a mining investment of
approximately BRL$9 billion in the state over two years.
The Company is evaluating its construction timeline
in anticipation of receiving the LI.
“Despite the ongoing Covid-19 pandemic,
we have made significant progress over the last several
months bydiligently advancing the project in a way that minimizes
risk for all stakeholders involved,” said Mutchler. “This is a
strategy that will maximize returns for our shareholders as
we develop an operating mine that we can all be proud of.”
Financing work ongoingThe Company
continues to work on securing a financing package for Posse
including progress towards the completion of an independent
technical engineering review. Amarillo’s current cash balance is
CDN$52.4 million, which is enough capital for the Company to meet
its short-term obligations, place long lead time orders, and
complete a CDN$3.5 million exploration program at its two
properties in 2021.
Construction preparations
continuingLQ Consulting and Management Inc. has been hired
as Amarillo’s project management team for Posse, and has begun work
on a project execution plan that will help management re-evaluate
the construction timeline.
Based in Oakville, Ontario, LQ’s team has
significant experience overseeing projects of all sizes in mining,
power, infrastructure, and other industries. The team was worked
all over the world with projects at all stages of development.
Detailed engineering is progressing, and deposits
have also been made on certain long lead time equipment items to
secure drawings to advance the engineering. In addition, staffing
levels have been increased incrementally in Brazil in anticipation
of breaking ground.
Exploring to expandAn induced
polarization survey is currently underway at Mara Rosa, and an
8,500 metre drilling program is planned in the first quarter to
follow up and test exploration targets along the Posse North Trend.
Gold anomalies have been found up to 8.0 kilometres northeast of
the Posse Gold Deposit and support the theory that there are
additional near-surface gold deposits along the Posse North Gold
Trend. The planned drilling is being done with the aim of expanding
the Company’s reserves and mine life.
Posse: low costs and a strong financial
returnThe Posse Gold Project is located on the Company’s
Mara Rosa Property in the Goiás State of Brazil. It will be built
into an open pit mine and carbon-in-leach operation with dry stack
tailings. A definitive positive feasibility study released in June
showed that Posse will produce gold at an all-in sustaining cost of
$656 per ounce, based on a gold price per ounce of US$1,730 and a
foreign exchange rate of 5.3 BRL to 1 USD. Posse has an initial
mine life of 10 years, initial gold production of 104,000 ounces
per year, and an after-tax net present value 5% of $360
million.
Amarillo Gold Corporation: on track to
becoming a Brazilian gold producerAmarillo is advancing
two gold projects located near excellent infrastructure in
mining-friendly states in Brazil.
The development stage Posse Gold Project is on its
Mara Rosa Property in Goiás State. It has a positive definitive
feasibility study that shows it can be built into a profitable
operation with low costs and a strong financial return. Mara Rosa
also shows the potential for discovering additional near-surface
deposits that will extend Posse’s mine life beyond its initial 10
years.
The exploration stage Lavras do Sul Project in Rio
Grande do Sul State has more than 22 prospects centered on historic
gold workings.
Amarillo trades on the TSXV under the symbol AGC
and the OTCQB under the symbol AGCBF. Visit www.amarillogold.com to
learn more.
Qualified PersonMichael Durose,
P.Geo., Consulting Geologist for Amarillo Gold Corp. 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.
For further information, please
contact |
Mike
Mutchler |
Annemarie Brissenden |
President & CEO |
Investor Relations |
416-294-0736 |
416-844-6284 |
mike.mutchler@amarillogold.com |
annemarie.brissenden@amarillogold.com |
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
the content of this news release.
Forward-looking statementsThis
news release contains forward-looking statements regarding the
Company’s current expectations regarding future events, including
its business, operations and condition, and management’s
objectives, strategies, beliefs and intentions. Various factors may
prevent or delay our plans, including but not limited to, the
trading price of the common shares of the Company, capital market
conditions, impacts from the coronavirus or other epidemics,
counterparty risk, TSXV approval(s), contractor availability and
performance, weather, access, mineral and gold prices, and success
and failure of the exploration and development carried out at
various stages of the program.
Permission from the government and community is
also required to proceed with future mining production. Readers
should review the Company’s ongoing quarterly and annual filings,
as well as any other additional documentation comprising the
Company’s public disclosure record, for additional information on
risks and uncertainties relating to these forward-looking
statements.
Readers should also review the risk factors
applicable to junior mining exploration companies generally to
better understand the variety of risks that can affect the Company.
The Company undertakes no obligation to update publicly or
otherwise revise any Forward-looking statements whether as a result
of new information or future events or otherwise, except as may be
required by law.
PDF
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