Avion Gold Corporation

Avion Gold Corporation

January 28, 2010 09:51 ET

Avion Gold Provides Update on Operations and Expansion Plans



TORONTO, ONTARIO--(Marketwire - Jan. 28, 2010) - Avion Gold Corporation (TSX VENTURE:AVR) ("Avion" or the "Company") is pleased to provide an update on its operations and progress towards achieving a production rate of 200,000 ounces of gold per year from its Tabakoto/ Ségala operations in Mali, West Africa. The ability of Avion to increase production to 200,000 ounces of gold per year has not been the subject of a feasibility study and there is no certainty that the proposed expansion will be economically viable.

Avion considers its current mineral resource at the Tabakoto, Ségala and Djambaye 2 Zone properties of Measured and Indicated mineral resources of 11.38 million tonnes grading 3.71 g/t Au or some 1.43 million ounces of gold, and Inferred mineral resources of 9.88 million tonnes grading 3.78 g/t Au or some 1.2 million ounces of gold, supports this goal (please see Avion press release dated January 6, 2010). Avion plans to spend up to $10 million on exploration during 2010, with a mandate to increase the mineral resource base, and convert some of the Inferred mineral resources to Measured and Indicated mineral resources.

A development schedule is presented in the table below.

Project milestones 2010 2011 2012
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
60,000 metre exploration program          
Future exploration programs        
Update plant expansion study                
Gravity gold vs leach study                
Order plant long lead time equipment                
Construct gravity gold recovery plant            
Tabakoto underground development      
Fast-track two Tabakoto u/g devel. areas            
Update mineral resource statement                
Issue NI43-101 report with mine plan                
Plant expansion construction          
Segala underground development        
200,000 oz/year gold production                

Technical Details

Avion's progress to date towards expansion is summarized below:

  •  2010 Exploration Program – 60,000 metres planned
    • Exploration planning completed. Will focus on the development of additional, and further definition of, mineral resources in Q1 and Q2. 
    • Current highest priority targets include:
      1. Tabakoto
      2. Djambaye I, Djambaye II and Fougala 1 zones
      3. Dioulafoundou
      4. Dar Salam
      5. Segala Far NW
  • Leach and grinding/gravity gold test studies
    • First two rounds of leach and gravity studies - completed. Up to 85% leach recovery from oxide material achieved. Potential to recover significant gold from sub-grade material (below the current economic cut-off grade) by grinding and gravity separation alone.
    • Third round of leach studies – underway. Results expected Q1 2010.
    • Gravity test work on fresh low grade material – underway. Will determine gravity recovery by grind size. Results expected Q1 2010.
    • Stand-alone gravity separation plant for sub-grade and low grade material - being studied. Objective is to increase gold production by 10,000 oz Au to 20,000 oz Au per year.
  • Mill studies – Ball mill versus SAG (semi-autogenous grinding)
    • Grinding studies support the use of a SAG mill for Tabakoto and Segala ores to achieve 4,000 tonnes per day production.
    • SAG mill is expected to increase plant availability during the rainy season.
    • Capital and operating cost estimate for expanding plant to 4,000 tonnes per day – completed by engineering firm. Study compares SAG versus ball mill requirements to achieve 4,000 tonnes per day plant throughput. Study is being revised based on Avion's internal review. Expected Q1 2010.
    • Avion currently sourcing new and used SAG and ball mills to firm up capital costs and lead time estimates. Mill order expected to be placed Q2 2010.
  • ILR (inline leach reactor) studies
    • Test work on gravity gold concentrates – completed. ILR considered suitable for the process. 
    • ILR expected to increase gravity Au recovery and reduce handling of physical gold.
  • Underground mining at Tabakoto
    • Initial development and mining plans for Tabakoto and Segala – completed, with optimization in progress.
    • Infrastructure equipment ordered to date includes dewatering system, ventilation fans and mobile equipment. Maintenance shop, change house, offices – detailed engineering/drafting underway.
    • Generators for power plant - purchased.
    • Camp construction for additional employees - underway.
    • Construction of Tabakoto pit water diversion ditch - underway.
    • Backfill test work on tailings - underway.
    • Contract negotiations with mining contractor - advancing.
    • $8 million in purchases committed to the project to date.

Avion's future plans include:

  • Updated mineral resource models scheduled to be completed Q4 2010.
  • Proposed construction and development timeline
    • Develop additional open pittable resources in 2010 via accelerated exploration in priority target areas
    • Order plant expansion long lead time equipment in Q2 2010
    • Commence construction of stand-alone gravity gold facility Q2 2010
    • Tabakoto underground development to commence Q3 2010
    • Underground development of areas behind the existing Tabakoto open pit walls to the north and south scheduled to be fast-tracked for production in Q4 2010
    • Underground mineral resources below the existing Tabakoto pit bottom to be developed starting in Q4 2010
    • Segala underground development to commence Q1 2011
    • Plant expansion construction to be completed during 2011
  • Project studies
    • Based on in-house estimates, Avion projects the production of 100,000 ounces gold in 2010. Based on the production rate achieved in 2009 with Q4 gold production of 21,300 ounces and 8,100 ounces in December alone, Avion projects gold production of approximately 23,000 ounces per quarter for the first three quarters, increasing to 32,000 ounces in the fourth quarter as the amount of development ore from Tabakoto underground increases.
    • Avion continues to analyze a 200,000 ounce per year production scenario. Significant progress has been made towards this target, with a goal to update the production plan in Q4 2010 with the support of a compliant technical report once new mineral resource models are completed based on the 2010 exploration program, and Tabakoto underground mine development is advanced.

Andrew Bradfield, P.Eng., the Chief Operating Officer of the Company, and a qualified person under National Instrument 43-101, has reviewed the scientific and technical information in this press release.

About Avion Gold Corporation

Avion is a Canadian-based gold mining company focused in West Africa. The Company holds 80% of the Tabakoto and Ségala gold projects in Mali. Gold production is planned at approximately 100,000 ounces for 2010, with a longer term goal of achieving 200,000 ounces per year. Avion has a highly skilled management team, with a focus on growth and consolidation within West Africa.

Cautionary Notes

This press release contains "forward looking information" within the meaning of applicable Canadian securities legislation. Forward looking information includes, but is not limited to, statements with respect to the likelihood of achieving production targets, the effect of the results on the future financial or operating performance of the Company, the prospective mineralization of the properties, planned exploration programs, anticipated production schedule and terms. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; the actual results of current exploration activities; acquisition risks; and other risks of the mining industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.


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