Amarillo Gold Corp. provided update on the permitting process at the Mara Rosa Project, Goias state. The review was instigated in response to request from the Ministério Público.

The company is now pleased to report that it has delivered the preliminary IPA report, to the respective authorities. The IPA report is the result of eighteen months of monitoring and measuring the quality of the surface and ground waters in the catchment around the Posse deposit, soil sampling, and monitoring the aquatic biota. It is the opinion of the company and it's environmental consultant, that the work in the IPA report shows no lasting environmental effect from the past mining work.

The company now expects the permitting process to move ahead once the authorities have had time to review. The company has applied applied for a preliminary license. In Brazil mine permitting is governed and administered by each state, however the States tend to keep the same standards so the process is very similar throughout Brazil.

The process has three stages, the preliminary license, the installation license, and finally the license to operate. The application for an LP is accompanied by an Environmental base-line report called the EIA (Estudo de Impacto Ambiental which translates to Environmental Impact Statement) and an environmental mitigation report, or RIMA (Relatório de Impacto Ambiental). The department that administers the permitting in Goias state is called SEMARH.

The application is also subject to review by the MP and it is noteworthy that in recent years all large engineering and mining projects in Brazil, have seen the MP play a much more active role. In late 2011 the MP instigated an investigation into possible contamination of waters in the Mara Rosa district by historic mining, based on a public complaint lodged in 1998. The Posse deposit is not the only suspended mine in the district and the area also was the focus of widespread artisanal working in the 1980's. This investigation showed that there were acidic waters in the district, and although and although they were not from the Mara Rosa project the issue concerned the MP enough to ask for suspension of the LP until Amarillo could measure the environmental impact of the historic mining at Posse.

The old mine at Posse was operated by Mineração Genipapo, which shut down operations in 1995, and in 2003 the state authorities issued a certificate that indicated that the area was considered remediated, however the MP considers that the previously filed complaint had not been correctly addressed. In April 2013, Amarillo submitted an initial response to the MP's concern about acid waters by showing several assays of the Pit waters at Posse, which indicate they were not acidic (Ph 7.4) and suitable for aquatic life. The MP did not consider this adequate and requested a larger study.

The preliminary IPA report now submitted by Amarillo is the summary of this study. It includes several sets of water analysis in the two small Open Pits (now filled with water) as well as surface water from surrounding streams. Ground waters were checked from existing underground wells and from auger holes drilled by Amarillo. These analyses (carried out at three monthly intervals) showed that there were no low ph waters and no significant presence of heavy metals with values all below the limits published by CONAMA (National Council for the Environment) in Resolution 357 of 2005.

The two Open Pits are now the home of a quantity of fish with at least four species identified including tilapia (a fish not indigenous to Brazil), lambari (a small fish known as bio-indicator because of its' requirement for high quality water), piaba and caranha (specimens of up to 5 kg. can be found in the larger Open Pit). The report includes analyses of two different types of the fish found in the Open Pits, (tilapia and piaba) and showed that levels of heavy metals in the fish were below the limit of detection though copper values were detected in low quantities (but within the limits allowable according to the World Health Organisation, WHO).

Similar small quantities of copper were also found in six other samples of fish from surrounding rivers and streams and would seem to be the norm for the area. The IPA was of a preliminary investigative nature and concluded that there was no chemical contamination caused by previous mining. The company awaits a response from the MP, but once a satisfactory review is received the LP process will recommence and the permitting process should move forward.

An LP is only granted after a public hearing held in the municipal and the company intends to hold this in April. There is great public support for the implantation of the mine in the area (a traditional mining district). The company expects to obtain the LP before the end of the second quarter 2014.