VANCOUVER, BRITISH COLUMBIA -- (MARKET WIRE) -- 12/18/07 -- Amarillo Gold Corp. (TSX VENTURE: AGC) ("Amarillo" or the "Company"), reports on the discovery of a new gold zone on the Caneleira prospect at its Lavras do Sul Project in the state of Rio Grande do Sul, Brazil. The five holes drilled and assayed to date on Caneleira have uncovered broad, low grade gold mineralization spanning almost 400 m of strike length. Furthermore, the mineralization on the prospect has been continuously mapped as an alteration zone for 1 km and may be apparent as 2.5 km linear zone interpreted from the airborne magnetics. Assays are pending for an additional four holes and the drill remains active on the prospect.

The Lavras granite complex hosts numerous areas of historic diggings and small mine workings that were the subject of gold rushes in the 1880's and 1930's. Gold mineralization had been drill-confirmed in the 1980's at Cerrito and Butia, where it was found to be hosted in structurally controlled alteration zones with sericite and pyrite, +/- sheeted quartz veins. None of the other areas of workings and alteration, (at least 12 identified to date), have ever been drill-tested. Amarillo's approach has been to dilligently surface map these areas and follow-up, where warranted, with a drill program. Since work began on this project, 43 drill holes (6237 m) have tested various prospects and targets associated with the Lavras granite intrusive complex.

Caneleira is one of these areas and the results given here signify the 2nd distinct gold zone discovered during the current exploration phase. The Company has to date drilled nine holes at Caneleira totaling 1673 m. Assays have been returned for the first 5 drill holes, all of which reported significant gold mineralization. Of note, drill hole LDH-110 intersected 36.1 m @ 1.42 g/t Au (from 70.4 m to 106.5 m); drill hole LDH-111 intersected 37.0 m @ 1.17 g/t Au from surface; and drill hole LDH-114 intersected 266 m @ 0.35 g/t from 8.0 m to 276.0 m. This intersection consisted of several higher grade zones, including 12.0 m of 0.49 g/t from 8.0 m to 20 m in the oxides/transition zone, interspersed by more weakly anomoulous (sub- 0.3 g/t) material. A complete summary of results to date from Caneleira are given in Table 1.

Table 1: Summary of Drilling at Caneleira
-----------------------------------------

          Total                                       Dist-
Hole      Depth          Az./  Zone   From      To    ance   Grade      Com-
No.     (metres)         Dip       (metres)(metres)(metres)(g/t Au)   ments


                 190 degrees/
LDH-110   149.1  -60 degrees Centro   70.4   106.5    36.1    1.42
                               incl.  78.5    88.5    10.0    3.13
                                and   98.5   103.5     5.0    2.19
                                     123.0   128.0     5.0    1.01
                                     143.5   144.5     1.0    5.89

                 190 degrees/
LDH-111   130.7  -60 degrees Centro    0.0    37.0    37.0    1.17
                               incl.  25.0    27.0     2.0   15.40  Mineral-
                                      63.5    76.5    13.0    0.32     ised
                                      91.5    94.5     3.0    0.60     over
                                                                     entire
                                                                      drill
                                                                   interval
                                                                   avg 0.43
                                                                     g/t Au
                                                                       from
                                                                  0-130.7 m

                 190 degrees/
LDH-112   201.3  -60 degrees Centro   80.0    83.0     3.0    1.27
                                     100.0   106.0     6.0    0.48
                                     121.0   129.0     8.0    0.30
                                     161.0   164.0     3.0    0.41

                 190 degrees/
LDH-113   195.2  -60 degrees Centro   46.0    72.5    26.5    0.58
                                      93.0   105.0    12.0    0.77

                 190 degrees/
LDH-114   302.9  -60 degrees Centro    8.0   274.0   266.0    0.35

                               incl.   8.0    20.0    12.0    0.49    Oxide/
                                and   53.0    83.0    30.0    0.51    trans-
                                and  127.5   132.0     4.5    1.18    ition
                                and  156.0   166.0    10.0    1.16     zone
                                and  181.3   198.0    16.8    0.83
                                and  213.0   250.0    37.0    0.55
                                and  271.0   272.0     1.0    3.54

Samples sent to Acme Laboratories in Goianna, Brazil, and Vancouver, Canada. Gold is determined using fire assay using 50 g aliquots with an ICP finish; if the grade is higher than 3 ppm a gravimetric method is used. All samples are subject to a chain of custody and are submitted with standards and blanks to check the assay results. The laboratories also use internal standards and repeat analysis. For the results reported in this release all the standards, blanks and repeats delivered acceptable results. The Company has been targeting larger intersections of 0.3 g/t+ gold. Intersections that fall short of this threshold may provide exploration insight and are so given.

The Caneleira prospect lies 4 km to the west of the town of Lavras do Sul on pasture lands. The dip of the structures appears to be sub-vertical. The mineralization appears to be controlled by a SE-NW structure striking at 130 degrees, similar to that which appeared at the Paredao prospect, about 800 m to the NE, where a discovery hole reported 12 m at 4.54 g/t near surface (see NR October 30, 2007.) The holes reported here for Caneleira were drilled on a 50 m+ spacings starting in the west and traversing east. A map of the prospect is available on our website: www.amarillogold.com.

These encouraging results will see a drill kept on the Caneleira prospect. Several drill holes are currently planned to test the entire extent of the altered zone. A second rig continues to drill at the Cerrito prospect to the East of the Village of Lavras do Sul. The Company will provide an update from the Cerrito prospect in the near future.

Amarillo Gold Corp. is a company focused on the acquisition, definition and discovery of gold resources in Brazil. Its principal projects are Mara Rosa in the state of Goias and Lavras do Sul in the state of Rio Grande do Sul. The Posse Deposit at Mara Rosa was determined by an independent 43-101 study to contain 974,000 ounces inferred at a grade of 1.35 g/t (0.5 g/t cut-off) and 764,000 ounces inferred at a grade of 1.80 g/t (1 g/t cut-off). A scoping study on the project has been commisioned and results are expected shortly.

The Company also has a portfolio of earlier stage projects. All properties under Amarillo's management are located in areas of good infrastructure and robust community support.

The Qualified person for this news release is Buddy Doyle as per the guidelines laid out in the NI 43-101. This news release contains Forward Looking Statements regarding our intentions and plans. Various factors may prevent or delay our plans, including but not limited to, contractor availability and performance, weather, access, mineral prices and success and failure of the exploration and development carried out at various stages of the program. Readers should review risk factors applicable to junior mining exploration companies generally to understand the variety of risks that can affect the Company.

ON BEHALF OF THE BOARD OF DIRECTORS

AMARILLO GOLD CORP.

Buddy Doyle, President

TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contacts:
Amarillo Gold Corp.
Buddy Doyle
President
(604) 689-1799
(604) 689-1899 (FAX)
Website: www.amarillogold.com