Avion Gold Corporation
TSX VENTURE : AVR
OTCQX : AVGCF

Avion Gold Corporation

March 31, 2010 10:36 ET

Avion Increases Tabakoto Area Resources by 25% for Less Than $7/Ounce

AGREES TO PURCHASE 293,000 OZS Au INDICATED AND 368,000 OZS Au INFERRED RESOURCES

TORONTO, ONTARIO--(Marketwire - March 31, 2010) - Avion Gold Corporation (TSX VENTURE:AVR)(OTCQX:AVGCF) ("Avion" or the 'Company') is pleased to announce that it has executed a purchase agreement with AXMIN Inc. ("AXMIN") under which Avion has agreed to acquire AXMIN's interest in the Kofi Group concessions ("Kofi") in Mali for total consideration valued at approximately CDN$3.6 million.

The Kofi property is a large, 472 sq. km, property package situated, at its nearest point, within approximately 5 kilometres to the northwest of Avion's Tabakoto Project. The Kofi property wraps around the north side of Randgold's Loulo Mine (Measured and Indicated resources of 62.69 million tonnes grading 4.55 g/t Au) concessions (see Figure below). Four of the nine known mineralized zones on the Kofi property are located along two linear mineralization trends that are defined by the alignment of deposits within the nearby Randgold Property. These two trends, which intersect on the Kofi property, are associated with a magnetic feature that extends for another five kilometers to the north. Avion believes this magnetic feature represents an interesting exploration target.

The Kofi property contains nine mineralized zones with identified mineral resources. All of the estimated mineral resources lie in the Kofi Nord concession of which Avion's interest would be 81.25% with 12.5% held by African Mining Selection Corporation and 6.25% held by Societe Financiere d'Exploration d'Or au Mali. Accordingly, indicated mineral resources of 238,000 ounces and inferred mineral resources of 299,000 ounces would be credited to Avion upon completion of the acquisition. Total estimated Indicated Mineral Resources are approximately 3.6 million tonnes grading 2.5 g/t Au totaling 293,000 ounces Au (Roberts, 2008 43-101 compliant report). In addition, the Kofi property hosts total Inferred Mineral Resources of approximately 5.26 million tonnes grading 2.2 g/t Au totaling 368,000 ounces (Dec. 11, 2007 AXMIN news release, Roberts, 2008 43-101 compliant report) . Most of the zones are open along strike and to depth with zones only tested from 60 to 150 metres below surface. All of the zones are within 15 to 38 kilometers of Tabakoto's mine infrastructure, potentially placing these zones, including the estimated mineral resources, within trucking distance to Tabakoto. A summary of the main mineralized zones is as follows:

Zone Tonnes* g/t Au Ounces Resource Category Comment
C Zone 873,000 3.5 99,000 Indicated Tested to less than -100 m depth
C Zone 913,000 3.7 109,000 Inferred Tested to less than -100 m depth
A zone 378,000 2.0 25,000 Inferred Tested to 150 m depth
A Zone Linear 675,000 1.7 36,000 Inferred Tested to -60 m depth
B Zone 1,216,000 2.1 83,000 Indicated Tested to -140 m depth
B Zone 160,000 1.7 9,000 Inferred Tested to -140 m depth
Blanaid 510,000 2.4 39,000 Inferred Tested to -85 m depth
Betea Central 1,154,000 2.3 111,000 Indicated Tested to -150 m depth
Betea Central 981,000 1.6 52,000 Inferred Tested to -150 m depth
Betea North 473,000 1.6 25,000 Inferred Tested to -150 m depth
Betea South 1,169,000 2.0 74,000 Inferred Tested to -150 m depth
 * Mineral resources presented by AXMIN on December 11, 2007 and supported by a 43-101 compliant technical report but Roberts, 2008.

John Begeman, Avion's President and CEO, stated, "The acquisition of the Kofi property, Avion's most recent cost-effective and accretive acquisition, allows the Company to take advantage of a resource that can potentially be trucked to our existing milling and processing facility. Randgold, through their exploration success, has demonstrated tremendous value in the area immediately to the south of the Kofi property. Avion believes that the potential exists for similar success on the Kofi property, which has proven stratigraphy that is rich in resources."

In consideration for acquiring AXMIN's interest in the Kofi Property, Avion, will, upon final closing of the definitive agreement and the receipt of any applicable regulatory approvals, have paid to AXMIN CDN$500,000 and issued to AXMIN 4,500,000 Avion common shares. AXMIN will begin to receive the consideration for the Kofi Property as soon as the Kofi Nord concession is transferred to Avion's Mali subsidiary and according to a payment schedule established in the definitive agreement. AXMIN's direct interest in the concessions that comprise the Kofi property varies from 81.25% to 100%. Completion of the proposed acquisition is subject to the receipt of standard closing documents, including a title opinion, approval of the TSX Venture Exchange and Government approval in Mali for the license transfers.

Upon completing the acquisition, Avion's intends to first re-log the core in order to update and validate the interpretation of the mineralized zones. Once completed, Avion plans to conduct a drill program commencing in late 2010 to test targets, developed through the re-interpretation, and existing targets that were developed by AXMIN.

Don Dudek, Senior Vice President, Exploration, commented "The Kofi C zone, which lies along the same trend as four of the Randgold deposits, is the highest grade zone on the Kofi property. We believe that it is a compelling near-term potentially open-pittable resource that appears to be open for expansion. Work by AXMIN and Randgold has demonstrated the prospective nature of this trend, which we believe bodes well for future discovery potential."

Don Dudek, P.Geo., the Senior Vice President, Exploration 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 company focused in West Africa. The Company holds 80% of the Tabakoto and Segala gold projects in Mali. Gold production commenced at these projects in 2009 with just over 51,000 ounces produced last year. Avion continues to progress towards reaching its previously stated goal to achieve a production rate of 200,000 ounces of gold per year from its Tabakoto/ Segala operations with an aggressive exploration program, underground mine planning for the Segala and Tabakoto deposits and finalization of production upgrade studies in progress. Avion's 2010 production goal was initially estimated at 100,000 ounces of gold. Anticipated 2010 gold production of approximately 100,000 ounces is under review. Avion has a highly skilled management team, with a focus on growth and consolidation within West Africa.

About AXMIN

AXMIN is a Canadian exploration and development company with a strong focus on central and west Africa. AXMIN has projects in Central African Republic, Mali, Sierra Leone and Senegal. For more information regarding AXMIN visit our website at www.axmininc.com.

Cautionary Notes

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements regarding the impact of the results on the Company; statements with respect to the development potential and timetable of the Mali projects; the future price of gold; the estimation of mineral resources; conclusions of economic evaluation (including scoping studies); the realization of mineral resource estimates; the timing and amount of estimated future production, development and exploration; costs of future activities; capital and operating expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks. 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; ability to successfully integrate the purchased properties; foreign operations risks; other risks inherent in the mining industry and other risks described in the annual information form of the Company which is available under the profile of the Company on SEDAR at www.sedar.com. 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.

To view the Tabakoto & Kofi Projects, please visit the following link: http://media3.marketwire.com/docs/kofiprojects331.pdf

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE

Contact Information

  • Avion Gold Corporation
    Rene Bharti
    Vice President Business Development
    (416) 861-5913
    rene@aviongoldcorp.com