Amarillo Gold Corporation (TSX-V:AGC, OTCQB:AGCBF) posted third-quarter results that showed it was exercising great financial discipline, while remaining on track in advancing its gold projects in mining-friendly states in Brazil.
For the period ended September 30, 2021, the company had cash on hand of C$32.3 million. Amarillo said C$2 million was spent during the quarter on engineering and consulting for the Posse Gold project as it prepared to make a construction decision once the financing is secured.
“Other major expenses in the quarter included $2.3 million for land acquisition, increased salaries due to additional staff hires, and increased professional fees due to financial advisory services,” said the company.
READ: Amarillo Gold receives regulatory approval for Posse power line in Brazil’s Goiás State
Amarillo increased its investor outreach after launching a new website and social media channels last quarter. “The company plans to participate in three resource conferences in the fourth quarter, all part of a strategy to raise awareness among a broader base of potential shareholders,” said Amarillo.
The Toronto-based company’s development stage Posse Gold project on its Mara Rosa property in Goiás state in central Brazil has a positive definitive feasibility study that shows it can be built into a profitable operation with low costs.
“We expect the deposit to develop into another source of future ore feed for the Posse mill,” Amarillo CEO Mike Mutchler said in a statement. “We believe Pastinho will extend Posse’s overall mine life and significantly increase the mine’s average annual gold production, thus enhancing the economics shown by the positive feasibility study.”
As announced in September, Pastinho is a new primary gold deposit located 3.5 kilometers (km) northeast of the Posse gold deposit. It is a near-surface tabular shaped deposit striking 1,700 metres (m) that dips 60 degrees northwest. In October, Amarillo received assay results that confirmed continuity and down dip extensions of Pastinho, which is at least 200m deep.
Amarillo said the focus during the quarter was on evaluating the options for raising the balance of the construction financing to build the Posse Gold Mine. “The goal is to find the best financing option for the company and its shareholders and taking advantage of the flexibility of Amarillo’s cash position,” said the company.
In the meantime, Amarillo said it is “still on track at Posse, where the company is spending what it needs to spend to stay on schedule for Posse while minimizing its financial exposure until it has obtained full construction financing.”
In advancements, the firm said over 95% of the land for the project area has been acquired, while the final parcel is being acquired. Similarly, nearly 50% of the overall project detailed engineering, including 99% of the early works detailed engineering has been completed. The rest of the engineering will be based on major equipment acquisitions that will be purchased after the firm gets project financing.
In addition, vendor drawings for the ball mill have been purchased, and equipment engineering for the filtration circuit is complete. Significant progress was also made on the 67-kilometer, 138-kilovolt power line that will connect the Posse mine to a substation in Porangatu.
“Over 2,200 people have registered at the training center in the town of Mara Rosa since it opened in February, and over 766 people have been trained through 51 courses since January,” said the company.
Meanwhile, at Amarillo’s exploration stage Lavras do Sul project in Rio Grande do Sul, drilling continued at a significant gold-hosting structural zone at Matilde, one of 23 highly prospective gold targets on the property.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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