Avala Resources Ltd.
TSX VENTURE : AVZ

Avala Resources Ltd.

February 21, 2012 08:00 ET

Avala Resources Announces 2012 Exploration Program; Focus on the Timok Gold Project With 180,000 Meter Drill Program

LONGUEUIL, QUEBEC--(Marketwire - Feb. 21, 2012) - Avala Resources Ltd. (TSX VENTURE:AVZ) (the "Company" or "Avala") is pleased to outline the objectives of the Company's 2012 exploration program and budget for its Timok Gold Project, a new gold discovery in an emerging sediment-hosted gold belt located in a proven and prolific copper-gold mining district, the Timok Magmatic Complex ("TMC") in Eastern Serbia. The Timok Gold Project (formerly referred to by the Company as the sediment hosted gold project or the Potoj Cuka gold project) is comprised of several target areas including Bigar Hill, Korkan and Kraku Pestar. Avala controls 100% of this newly identified sediment-hosted gold belt which totals approximately 250 square kilometres.

"We are very pleased with the results of the recently completed resource definition drilling program at Bigar Hill. Infill drilling has continued to confirm the continuity and near surface nature of gold mineralization across a substantial area," said James Crombie, President and CEO of Avala. "We are now very much focused on completing initial resource definition drilling programs on our other two high priority target areas, Korkan and Kraku Pestar, which we expect to finalize towards mid-year. Avala has once more committed to a large exploration program during 2012 which strongly reflects our belief that the Timok Gold Project has the potential to develop into a substantial gold mining operation. We look forward to working closely with the Republic of Serbia as we continue to progress the Timok Gold Project."

HIGHLIGHTS

  • Avala has commenced 2012 with a solid cash position of $30.9 million in its treasury. The Company plans to spend $25 million on its resource definition and exploration programs during 2012.
  • The majority of Avala's budget will be directed toward the development of the Timok Gold Project, where several significant gold discoveries have been made in an emerging sediment-hosted gold belt. At least 180,000 drill meters have been planned for 2012.
  • An approximate breakdown for the planned allocation of drill meters on the Timok Gold Project follows (current allocations are subject to change):
    • Korkan Resource Definition Drilling : 35,000m
    • Kraku Pestar Resource Definition Drilling: 10,000m
    • Additional Infill Resource Definition Drilling (Bigar Hill and Korkan): 100,000m
    • Exploration Drilling on other Target Areas 35,000m
  • As previously announced, the initial resource definition drilling program on the Bigar Hill target area was completed in December 2011. The Company has delivered the exploration database to international consultants AMC Consultants (UK) in order to begin independent resource estimation.
  • Initial Resource Definition Drilling programs have now commenced on the Korkan and Kraku Pestar target areas. The drilling program will use a nominal 80 meter by 80 meter grid spacing, together with a subset of the target areas at a nominal 40 meter by 40 meter grid spacing. The Company expects to complete these programs during Q2, 2012, following which, the exploration databases will be delivered to AMC Consultants (UK) in order to complete independent resource estimation.
  • Preliminary Economic Analysis (PEA): Upon receipt of the initial Canadian National Instrument 43-101 compliant mineral resource estimates, the Company expects to commence a PEA on the combined Bigar Hill, Korkan and Kraku Pestar target areas during the latter half of 2012.
  • Additional Infill Resource Definition Drilling programs have also been budgeted for 2012. The drilling will commence on the Bigar Hill target area during Q3, 2012 and Q4, 2012 on the Korkan target area. The drilling program will use a nominal 40 meter by 40 meter grid spacing, together with a subset of the target areas at a nominal 20 meter by 20 meter grid spacing. This drilling program is expected to carry over into calendar year 2013.
  • Exploration Drilling: Approximately 20% of the total drilling program has been allocated to wide-spaced 'framework' drilling of more recently defined target areas, located within a close proximity (less than 3 kilometers) of the current areas of resource definition drilling (e.g. Rapture Fault, Korkan-Vizur Trend, Kraku Pestar South and Bigar Hill East). Furthermore, additional drilling is to be allocated to potential new target areas within the sediment-hosted gold belt that may be generated through soil geochemical and exploration trenching programs which were completed during 2011 for which assay results are awaited. Additional soil geochemical and exploration trenching programs have also been budgeted for 2012 in order to expand the overall footprint of the sediment-hosted gold belt from its currently identified 20 kilometer strike length to potentially greater than 70 kilometers.
  • See Figure 1 for the location of Avala's Timok Gold Project licenses within the mapped sediment-hosted gold belt.
  • See the following link to view all Korkan-Bigar and Kraku Pestar drill holes located spatially in three dimensions: http://www.corebox.net/properties/timok-gold-project.

Dr. Julian F. H. Barnes, a qualified person under National Instrument 43-101, a Director and the Company's special consultant, has supervised the preparation of the technical data in this press release.

About Avala Resources Ltd.: Avala is a recently-formed company focused on the exploration and development of gold and copper projects in Serbia. The common shares of Avala trade on the TSX Venture Exchange under the symbol AVZ. Avala's issued and outstanding share capital totals 214,492,223 common shares, of which approximately 51.4% is held by Dundee Precious Metals Inc. (TSX:DPM).

Cautionary Statement

This press release contains forward-looking information. Although the Company believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. Forward looking information in this news release includes statements regarding the planned exploration program and expenditures for 2012, the completion resource estimates, the commencement of a preliminary economic analysis, the nature of the mineralization of the project, the results of the exploration activities and interpretation of such results, the potential size of the sediment-hosted gold system, and the timing and location of 2012 work programs. Forward-looking information involves known and unknown risks, uncertainties, assumptions and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Figure 1 is available at the following address: http://media3.marketwire.com/docs/avz_fig.1_0221.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 press release.

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