Avala Resources Ltd.
TSX VENTURE : AVZ

Avala Resources Ltd.

September 06, 2011 11:32 ET

Avala Resources Commences Resource Definition Drilling at Korkan-Bigar, Serbia and Provides Exploration Update

LONGUEUIL, QUEBEC--(Marketwire - Sept. 6, 2011) - Avala Resources Ltd. (TSX VENTURE:AVZ) (the "Company" or "Avala") is pleased to present an update on progress and drill results from the Korkan-Bigar trend, part of the sediment-hosted gold belt within the Cretaceous magmatic arc bordering the Timok Magmatic Complex ("TMC") in Eastern Serbia.

"With the commencement of resource definition drilling on the Korkan-Bigar trend, the Company has progressed to the next stage of its development very much in line with management's expectations," said James Crombie, President and CEO of Avala. "We look forward to establishing continuity of mineralization within the mineralized 'footprints' outlined by Avala to date and providing regular updates to the market. Additionally, we will continue to aggressively drill test the recently discovered target areas which are located in close proximity to the resource definition drilling areas."

  1. HIGHLIGHTS
  • Resource definition drilling has commenced with a Reverse Circulation (RC) drill rig (GEMEX RC-500) on the Korkan-Bigar trend, initially drilling the Bigar Hill, Korkan and Kraku Pestar target areas.

  • The resource definition program will focus on establishing continuity of mineralization, with a nominal 80 meter by 80 meter grid spacing within the mineralized 'footprints' which have been outlined by Avala during the earlier, wide-spaced, 160 meter by 160 meter diamond drilling programs, which have been ongoing since August, 2010.

  • Wide-spaced 'step out' drilling (nominal 160 meter by 160 meter) on the Korkan-Bigar trend continues to intersect gold mineralization within the target stratigraphy, a sequence of strongly altered and decarbonatized conglomerates and sandstones with interbedded fine grained sandstone and clay-rich siltstones, marls, andesitic volcanics and derivative clastic rocks.

  • Drilling on the Korkan-Bigar trend (Bigar Hill) returned the following strong to moderate gold intercepts (0.4g/t cut-off grade), generally from the edges of the wide-spaced drilling grid:
Hole
ID
From
(m)
To
(m)
Interval
(m)
Au
(g/t)
Gram-
meters
BHDD029 68 105 37 4.05 150
BHDD032 101 118 17 1.24 21
BHDD034 126 176 60 2.08 125
Note: BHDD034 represents a nominal 80 meter by 80 meter infill hole.
Note: 5 meter minimum thickness, 5 meter maximum included waste.
  • Exploration drilling has also begun to test three new target areas, located in close proximity to the Korkan and Bigar Hill mineralized 'footprints'.

  • Exploration drilling on the Bigar East Target Area, located approximately 800 meters east-southeast of the Bigar Hill zone returned the following gold intercept (0.4g/t cut-off grade):
Hole
ID
From
(m)
To
(m)
Interval
(m)
Au
(g/t)
Gram-
meters
BIDD013 233 256 23 2.46 57
Note: 5 meter minimum thickness, 5 meter maximum included waste.
  • Exploration drilling on the Korkan-Bigar trend (Rapture Fault Zone), located approximately 700 meters southwest of the Bigar Hill zone returned the following gold intercepts (0.4g/t cut-off grade):
Hole
ID
From
(m)
To
(m)
Interval
(m)
Au
(g/t)
Gram-
meters
BIDD007 74.9
109.4
83.4
127
8.5
17.6
0.67
1.17
6
21
210 215 5 1.21 6
Note: 5 meter minimum thickness, 5 meter maximum included waste.
  • Exploration trenching on the Korkan-Bigar trend (Vizur Target Area), located approximately 3 kilometers north of Korkan returned the following gold intercept (0.4g/t cut-off grade) from the limestone/'target stratigraphy' contact:
Trench
ID
From
(m)
To
(m)
Interval
(m)
Au
(g/t)
Gram-
meters
KOTR067 - - 10 1.51 15
  • To date, Avala has outlined gold mineralization at Korkan over an area of approximately 1,200 meters by 600 meters surrounding the original discovery hole (KODD001) and an area of 1,000 meters by 1,000 meters on the Bigar Hill target area (open in all directions). Kraku Pestar has been traced over 600 meters by 300 meters and is open to the north and south.

  • Three new target areas have been identified within 3 kilometres of the core Korkan-Bigar Hill area, within the same target stratigraphy.

  • Avala intends to continue the wide-spaced drilling program, in conjunction with the recently commenced resource definition program, in order to test the prospective 'target stratigraphy' within the Korkan-Bigar trend, to effectively outline the size of the newly defined sediment-hosted gold system.

  • The combined Korkan-Bigar trend is over 10 kilometers long and 2.5 kilometers wide and represents part of the northern portion of the sediment-hosted gold belt.

  • Additionally, soil sampling has been extended 5 kilometers to the north of Korkan and 20 kilometers to the south of Umka on a nominal 400 meter by 50 meter grid spacing across the target stratigraphy in an attempt to increase the overall strike length of the sediment-hosted gold belt from its currently defined 20 kilometers to potentially greater than 50 kilometers; results are expected during Q4, 2011. Wide-spaced (nominal 800 meter centers) exploration trenching programs have been planned for these areas during the remainder of 2011.

  • Avala currently has eight diamond drill rigs and one RC drill rig operating on the sediment-hosted gold belt. Two diamond drill rigs have been allocated to the southern portion of the sediment-hosted gold belt on the Umka-Strnjak target area where scout drill holes are being drilled on nominal 320 meter by 320 meter centers within the target stratigraphy. The remainder of the drill rigs are operating on the Korkan-Bigar trend.

  • With the assistance of the Ministry of Environment, Mining and Spatial Planning, Avala has recently consolidated the Korkan-Bigar and Umka-Strnjak trends into one exploration licence (previously two) which retains the name 'Potoj Cuka-Tisnica'. The surrounding 'Breza' exploration licence has also been consolidated into one exploration licence (previously two); both exploration licences are valid until September 15th, 2013 and renewable for additional periods following this date. See Figures 1& 5.
  1. GEOLOGY AND MINERALIZATION STYLE
  • Sediment-hosted gold, located along the western margin of the Timok Magmatic Complex, represents a previously unrecognized style of gold mineralization within the Timok region.

  • Within the Korkan-Bigar trend, stratabound, fault-controlled breccia together with minor karst-infill breccia represent the styles of sediment-hosted gold mineralization recognized to date.

  • Gold mineralization appears to be associated with fine-grained pyrite (sulfidation reaction) and a number of alteration styles including kaolinitization, decarbonatization of calcareous sedimentary rock adjacent to the gold mineralization and occasionally silicification.

  • Gold mineralization is hosted within a favourable sedimentary package – the 'target stratigraphy' – which is underlain by Jurassic and Lower Cretaceous limestones and consists predominantly of calcareous sandstones and conglomerates which include an interbedded fine grained sandstone and clay-rich siltstone unit.

  • The upper portion of the target stratigraphy consists of 'red' sandstones and volcanic-lithic clastics which are in turn overlain by calcareous marls, andesitic volcanics and derivative clastic rocks, which represent the youngest portion of the stratigraphy.

  • To date gold mineralized intervals have been returned from all portions of the target stratigraphy, excluding, to a certain extent, the marl unit and the interbedded fine grained sandstone and clay-rich siltstone unit which have been only weakly mineralized; Avala believes that these units may be locally acting as an aquitard, or capping unit, to hydrothermal fluids.

  • In general the target stratigraphy within the Korkan-Bigar trend appears to be gently dipping towards the east and may have been gently folded with a northwest axial plane.

  • Figure 1 shows the location of the Korkan-Bigar trend and the Kraku Pestar target area within the currently defined 20 kilometer long sediment-hosted gold belt, defined in this image by anomalous gold soil geochemistry, together with their respective total metal contour plots superimposed. The significant potential of the belt can be clearly seen when the surface area of the 'footprints' of the currently drilled target areas are compared to the overall extent of the presently defined gold soil anomalies.
  1. DRILLING & TRENCHING AT KORKAN-BIGAR
  • Resource Definition Drilling: Avala commenced RC drilling on a nominal 80 meter by 80 meter grid spacing at Bigar Hill on the 18th August, 2011. Drilling will continue at Bigar Hill and then move to Korkan later in 2011. A second RC drill rig is expected to be operational in January, 2012 and will commence on the Kraku Pestar target area. Additionally, selected locations within the target areas will be drilled to a nominal 40 meter by 40 meter grid spacing to provide geostatistical support and diamond 'twin' drilling of the RC drill holes will be carried out across the target areas at a nominal rate of 15% of total drilling.

  • Bigar Hill: Avala is continuing the 'step out' drilling program at the Bigar Hill target area to the immediate east from current drilling, on a nominal 160 meter by 160 meter spacing. See Table 1 for a summary of all intersections at various cut-off grades for the results of diamond drill holes BHDD024 to BHDD034. Figure 2 shows a gram-meter (intervals greater than 0.4g/t Au x thickness), total metal contour plot of all Bigar Hill drilling to date superimposed on mapped geology, together with the locations of the Rapture Fault Zone and Bigar East target areas.

  • Strong gold mineralization is hosted within polymict conglomerate and sandstone intervals which have been strongly decarbonatized with intense, sooty, fine grained pyrite matrix infill. Recent drilling continues to confirm gold mineralization (BHDD032: 17m @ 1.24g/t Au (from 101m)) within the andesitic volcanics and derivative clastic rocks which were previously thought to be a poor host to gold. To date gold mineralization within the footwall Jurassic massive limestone of the Korkan-Bigar trend has been of an overall low to moderate tenor and is generally associated with brecciation, either karst or brittle deformation.

  • Additional drilling, generally peripheral in nature, has been completed within the Korkan target area and results have been returned for the following ten drill holes: KODD045 to KODD054. See Table 2 & Figure 4.

  • Multiple gold mineralized intercepts per hole are a common feature of the gold mineralization outlined to date in the Korkan, Bigar Hill, Kraku Pestar and Rapture Fault Zone target areas.

  • Bigar East: Initial wide-spaced drilling (nominal 320 meter by 160 meter) has commenced targeting the Jurassic limestone/'target stratigraphy' contact area which appears to be a faulted contact which dips steeply (~70°) towards the east and strikes north; it is defined by a moderate gold soil anomaly and variously gold anomalous trenches. Recent drilling (BIDD013: 23m @ 2.46g/t Au (from 233m)) has intersected a previously unrecognized style of mineralization to date; fault-controlled breccia mineralization within limestone located at a depth significantly below the limestone/'target stratigraphy' contact. Avala will continue to drill test the Bigar East target area northwards towards the Bigar Hill target area. See Figure 2.

  • Rapture Fault Zone: Initial wide-spaced drilling (nominal 160 meter by 160 meter) has commenced targeting the meta-sediment (phyllite)/Jurassic limestone contact area which appears to be a faulted contact which dips steeply (~70°) towards the east and strikes north-northwest and is defined by a strong gold-arsenic-thallium soil anomaly (>0.1g/t Au), together with moderately gold anomalous trenches. Avala is targeting an approximately 1,000 meter long portion of the Rapture Fault Zone, which may contain gold mineralization within a 50-80 meter wide corridor. Mineralization is associated with breccia within the fault zone and stratabound mineralization within the footwall meta-sediments. See Figure 2.

  • See Tables 4 & 5 for a summary of all intersections in diamond drill holes BIDD003 to BIDD013 from the Bigar East and the Rapture Fault Zone areas, at various cut-off grades.

  • Vizur: Recent exploration trenching has intersected moderate gold mineralization (KOTR067: 10m @ 1.51g/t) at the Jurassic limestone/'target stratigraphy' contact located approximately 3 kilometers north from Korkan discovery hole (KODD001). Exposed sediments within the area (marls and andesite volcanics/volcaniclastics) represent the upper portion of the target stratigraphy (i.e. youngest) and drilling has recently commenced targeting the calcareous sandstones and conglomerates that should lie stratigraphically beneath these units. See Figure 1 for Vizur target area location.
  1. DISCUSSION
  • A major sediment-hosted gold belt bordering the western boundary of the Timok Magmatic Complex, identified by soil and trench samples, extends over 20 kilometers along strike and is up to 8 kilometers wide. Soil sampling is being completed to the north and south of the currently defined 20 kilometer strike in order to attempt to determine the overall extent of the sediment-hosted gold belt.

  • The geology, geochemistry and available drill intersections suggest a strong similarity to the style of gold mineralization typified by the North Carlin Trend, Nevada, USA.

  • The recognition that the majority of the significant trench and diamond drill intercepts returned to date occur within the same flat lying or shallow dipping sedimentary package has significant implications for the gold potential of the Korkan-Bigar trend and the entire sediment-hosted gold belt.

  • The mineralized intersections detailed in Tables 1, 2 and 3 (for Bigar Hill, Korkan and Kraku Pestar respectively) have been compiled using a minimum 5 meter thickness and a maximum of 5 meters of included waste and a variety of lower cut off grades. Weighted mean gold grades and intersection thicknesses have been compiled for each area and are displayed in Table 6. Very encouraging grades and thicknesses have been returned. Multiple intercepts per hole are commonly encountered, particularly at Korkan and Bigar Hill.

Table 6: Weighted average intersection grades and intersection thickness per hole for the three target areas drilled to date in the 160 meter by 160 meter diamond drilling program.

0.4g/t Au Cut Off 0.8g/t Au Cut Off 1.0 g/t Au Cut Off
Target Area No. of Holes Weighted Average Grade
(Au g/t)
Weighted Average Grade
(S %)
Weighted Intersection Thickness Per Hole
(meters)
No. of Holes Weighted Average Grade
(Au g/t)
Weighted Average Grade
(S %)
Weighted Intersection Thickness Per Hole
(meters)
No. of Holes Weighted Average Grade
(Au g/t)
Weighted Average Grade
(S %)
Weighted Intersection Thickness Per Hole
(meters)
BIGAR HILL 23 1.53 1.38 32 18 2.11 1.55 26 17 2.40 1.58 22
KORKAN 19 1.69 1.27 21 13 2.61 1.38 17 10 2.89 1.49 19
KRAKU PESTAR 10 1.16 3.51 39 8 1.87 4.19 22 6 2.30 4.10 21
(Note: Down hole intersections do not necessarily represent true thickness)
  • Bulk density data is also routinely collected from diamond drill core as part of the standard set of procedures employed by Avala. To date some 329 density samples have been collected and measured from samples returning greater than 0.1g/t Au and 122 density measurements from samples grading over 0.4g/t Au within the sediment-hosted gold belt. Density data from the three target areas return very similar average bulk densities at 2.62 tonnes per cubic meter, as summarised in Table 7 (note that there is currently a backlog of density samples from the Bigar Hill drilling).

Table 7: Bulk density data from the Sediment-Hosted Gold project.

0.1g/t Au Cut Off 0.4g/t Au Cut Off
Target
Area
Average
Bulk Density
(t/cm)
Number of
Measurements
Average
Bulk Density
(t/cm)
Number of
Measurements
BIGAR HILL 2.62 86 2.62 40
KORKAN 2.63 148 2.62 52
KRAKU PESTAR 2.63 95 2.59 30
Average/Total 2.63 329 2.61 122
(Note: Densities determined using the wax coating immersion method by SGS Bor)
  • Diamond drill core recovery statistics are routinely monitored as part of the standard set of procedures employed by Avala. Diamond core recovery data from the three target areas return very similar and consistent values, as summarised in Table 8.

Table 8: Diamond drill core recovery statistics from the Sediment-Hosted Gold project.

0.1g/t Au Cut Off 0.4g/t Au Cut Off
Target
Area
Average Sample Recovery
(Diamond Drilling)
Average Sample Recovery
(Diamond Drilling)
BIGAR HILL 95.0 % 92.7 %
KORKAN 95.6 % 95.7 %
KRAKU PESTAR 91.9 % 92.0 %
Average 94.2 % 93.5 %
  • Exploration drill testing of the Korkan-Bigar trend will continue with wide spaced (nominal 160 meter by 160 meter) diamond drill holes, in conjunction with the ongoing resource definition drilling program, to allow Avala to outline the potential size of the sediment-hosted gold system.

  • In addition, the Jurassic limestone package has strongly anomalous gold in soil geochemistry where it is exposed in the Korkan-Bigar & Umka-Strnjak trends and numerous gold mineralized trench intercepts have been returned to date, hosted in limestone, which require drill follow-up in due course.

  • Avala controls 100% of the newly identified sediment-hosted gold belt which totals approximately 250 square kilometers and intends to systematically drill test all currently defined priority target areas.

  • Please see the following link to view all Korkan-Bigar and Kraku Pestar drill holes located spatially in three dimensions: http://www.corebox.net/properties/potoj-cuka-gold-belt
  1. SAMPLING AND ANALYSIS

The majority of soil samples have been assayed at the ALS Chemex laboratory, Perth, Australia. More recent programs have been assayed at the SGS managed laboratory at Chelopech in Bulgaria using a combination of ICP-OES and ICP-MS whereas gold has been assayed by low level detection fire assay method with an AAS finish. The Company has established a laboratory facility at Bor, Eastern Serbia which is independently managed by SGS. Trench samples were prepared at the laboratory facility at Bor and the samples have been assayed at the SGS managed laboratory at Chelopech in Bulgaria or the laboratory facility at Bor. Diamond drill core has been prepared at the laboratory facility at Bor and assayed at either the SGS managed laboratory at Chelopech in Bulgaria or the assay laboratory at Bor. A one metre sampling interval has been used where possible for the Sediment-Hosted Gold project diamond drilling program. Half core is routinely submitted to the laboratory for analysis. Following Avala standard quality assurance procedures, a full suite of field and laboratory duplicates and replicates along with internationally accredited standards and blanks, have been submitted with each batch of samples.

Trench sampling was carried out as channels in the wall just above the trench floor on 2m intervals. Except where extensive soil cover is encountered, trenches were sampled in their entirety. The samples were routinely weighed prior to final bagging to maintain an even sample size and to avoid sampling bias in harder rock types. An average channel sample weight was maintained at 3kg/m, which produces a consistent sample weight approximating half HQ core samples. Field duplicate samples were taken every 20 samples and known standards were inserted into the sample stream after every 20th sample. A geological and structural log was completed as for diamond drilling. All data collected in the field was routinely entered into geology and structural geology spread sheets using Field Marshal software for subsequent entry to an acQuire database and validation.

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.

Previously released data refers to data included in the "Potoj Cuka Gold Project, Serbia National Instrument 43-101 Technical Report" by Paul Mazzoni dated March 10, 2010 (the "Technical Report"), filed on SEDAR at www.sedar.com. Further information in respect of results, investigations, interpretations, quality assurance and quality control measures, along with geology, mineralogy, sampling, and analytical procedures is included in the Technical Report.

About Avala Resources Ltd.: Avala is a recently-formed company focused on the exploration and development of the Potoj Cuka sediment-hosted gold project and the Timok gold-copper project in Serbia. The common shares of Avala trade on the TSX Venture Exchange under the symbol AVZ.

Avala is well-capitalized, with approximately $37 million in its treasury at August 31, 2011, which it plans to use for the exploration and development of its mineral projects in Serbia. 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

The potential quantity and grade described in this press release are conceptual in nature. There has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the Korkan-Bigar target area being delineated as a mineral resource.

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 nature of the mineralization of the project, the results of the exploration activities and interpretation of such results, the gold potential of the project, the potential size of the sediment-hosted gold system, the suggested similarity to the style of gold mineralization of the North Carlin Trend project and the similarities suggested and with timing and location of future 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.

To view Figure 1, please click on the following link: http://media3.marketwire.com/docs/avalafigure1.pdf

To view Figure 2, please click on the following link: http://media3.marketwire.com/docs/avalafigure2.pdf

To view Figure 3, please click on the following link: http://media3.marketwire.com/docs/avalafigure3.pdf

To view Figure 4, please click on the following link: http://media3.marketwire.com/docs/avalafigure4.pdf

To view Figure 5, please click on the following link: http://media3.marketwire.com/docs/avalafigure5.pdf

To view Table 1, please click on the following link: http://media3.marketwire.com/docs/avalatable1.pdf

To view Table 2, please click on the following link: http://media3.marketwire.com/docs/avalatable2.pdf

To view Table 3, please click on the following link: http://media3.marketwire.com/docs/avalatable3.pdf

To view Table 4, please click on the following link: http://media3.marketwire.com/docs/avalatable4.pdf

To view Table 5, please click on the following link: http://media3.marketwire.com/docs/avalatable5.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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