Avala Resources Ltd.
TSX VENTURE : AVZ

Avala Resources Ltd.

August 07, 2012 08:01 ET

Avala Resources Completes the Initial Korkan Resource Definition Drilling Program, Serbia

LONGUEUIL, QUEBEC--(Marketwire - Aug. 7, 2012) - Avala Resources Ltd. (TSX VENTURE:AVZ) (the "Company" or "Avala") is pleased to present an update on progress and drill results from the Korkan project area, part of the Timok Gold Project, a new gold discovery in an emerging sediment-hosted gold belt located in Eastern Serbia.

1. HIGHLIGHTS

  • The recently completed Korkan resource definition program was focused on establishing continuity of mineralization. The drilling program has used a nominal 80 meter by 80 meter grid spacing, together with a subset of the target area at a nominal 40 meter by 40 meter grid spacing. The drill holes are located within the Korkan mineralized 'footprint' that was outlined by Avala during the earlier, 160 meter by 160 meter diamond drilling program, which started in November, 2010.
  • Recently completed resource definition reverse circulation (RC) and diamond (DD) drilling at Korkan has returned the following strong to moderate gold intercepts (0.4g/t Au cut-off grade):
Hole ID From (m) To (m) Interval (m) Au (g/t) Gram-meters
KORC080* 2 35 33 1.49 49
KORC085 18 52 34 1.17 40
KORC090 126 210 84 2.08 175
KORC097 3 28 25 0.91 23
KORC097 36 58 22 1.32 29
KORC097 65 70 5 2.06 10
KORC099 52 68 16 2.85 46
KORC099 76 116 40 1.28 51
KORC099 146 161 15 1.10 17
KORC100 8 66 58 3.41 198
KORC102 52 116 64 1.24 79
KORC104 3 44 41 0.84 34
KORC104 79 86 7 2.23 16
KORC109* 41 118 77 1.27 98
KORC120* 3 13 10 1.70 17
KORC120* 20 80 60 1.76 106
KORC123* 35 65 30 1.11 33
KORC123* 72 94 22 1.07 24
KORC126* 43 105 62 1.46 91
KORC131* 5 36 31 1.10 34
KORC140* 63 126 63 1.06 67
KORC140* 219 274 55 1.04 57
KODD114 148 166 18 2.6 47
KODD140* 29 48 19 3.93 75
KODD144 296 305 9 6.83 61
KODD144 372 387 15 1.81 27
KODD145* 12.8 49 36.2 0.97 35
KODT075 179 240 61 4.16 254
Note: Intersections calculated using 5 meter minimum thickness, 5 meter maximum included waste.
Note: The listing does not include 'twin' diamond drill hole intersections of drilled RC holes.
The prefix 'KODTxxx' represents a diamond tail of the corresponding RC drill hole number for drill hole completion.
(*) Denotes a nominal 40 meter by 40 meter infill drill hole.
  • The Timok Gold Project comprises several targets including Bigar Hill, Korkan and Kraku Pestar. Avala controls 100% of this newly identified sediment-hosted gold belt which totals approximately 250 square kilometres (Figure 1).
  • The Bigar Hill resource estimate was the first of three scheduled resource estimates, with Korkan and Kraku Pestar to follow. The initial Korkan resource definition drilling program was recently completed and the database has been closed off, with the data forwarded to AMC Consultants Limited (UK) ("AMC"). The Kraku Pestar drilling database is due to follow as soon as selected 40 meter by 40 meter drilling is completed.
  • The Company reported an initial resource estimate for Bigar Hill on July 6, 2012. The Bigar Hill mineral resource prepared by AMC has been estimated at 38,000,000 tonnes grading an average of 1.3 g/t gold in the inferred resource category for 1,500,000 ounces of gold, using a 0.4 g/t gold cut-off.
  • Infill drilling at 40 meter by 40 meter spacing has re-started at Bigar Hill.
  • Exploration diamond drilling continues to test new targets within the Project area.
  • Avala currently has five diamond drill rigs and two RC drill rigs operating on the Timok Gold Project.

2. DRILLING AT KORKAN

Resource Definition Drilling:

  • Avala commenced RC drilling at Korkan on the 9th January, 2012. Drilling was completed in July, 2012 for a total of 77,115.1 meters (47,634.1 meters of diamond drilling and 29,481 meters of reverse circulation drilling). 'Twin' diamond drilling of reverse circulation drill holes represented approximately 10% of total RC drilling.
  • The Korkan project, covering an area of approximately 0.5 square kilometers, has been drilled on a nominal 80 meter by 80 meter grid spacing. In addition, a portion of the target area has been drilled on a nominal 40 meter by 40 meter grid spacing to provide geostatistical support for resource estimation purposes.
  • Refer to Table 1 for a summary of all intersections at a 0.4g/t Au cut-off grade for all Korkan reverse circulation and diamond drill holes. Figure 2 shows a gram-meter total metal contour plot (intervals greater than 0.4g/t Au x thickness), of all Korkan drilling to date, superimposed on topographic contours. Figure 3 shows representative cross-sections through Korkan.
  • The routine reverse circulation-diamond 'twin' drilling program continues to confirm that the majority of mineralized intercepts and hence the deposit style, are dominated by layer-parallel, lithology/fault-controlled gold mineralization.
  • The reverse circulation-diamond 'twin' drill holes suggest that there can be close spaced variation in gold grade, as is typical for gold deposits.

Korkan East:

  • Additional multi-element assays have now been received for diamond drill holes within the Korkan East area within the Korkan project. Results have confirmed that the higher gold grade intersections in Korkan East are associated with elevated levels of lead, zinc, silver and arsenic, as supported by the geological logging of galena, sphalerite and arsenopyrite in the core. Selected intersections are tabulated below (0.4g/t Au cut-off grade):
Hole ID From (m) To (m) Interval (m) Au (g/t) Pb (%) Zn (%) Ag (g/t) As (%)
KODD037* 96 103 7 1.17 0.26 0.34 29 0.21
KODD037* 121 130 9 0.68 0.12 0.17 15.7 0.03
KODD058* 210 222 12 5.43 0.41 0.43 95.7 0.27
KODD061* 189.2 196 6.8 0.87 0.05 0.48 4.4 0.03
KODD061* 207 219 12 0.41 0.01 0.01 1.7 0.01
KODD061* 276 311 35 0.62 0.10 0.10 6 0.15
KODD084* 258 283 25 0.42 0.04 0.07 2 0.01
KODD084* 303 311 8 0.67 0.01 0.01 1.2 0.01
KODD084* 399 414 15 1.46 0.22 0.10 4.4 0.40
KODD084* 421 447 26 10.01 4.12 3.64 92.2 0.85
KODD100 265 271 6 0.79 0.09 0.09 6 0.33
KODD100 279 286 7 0.67 - 0.01 1.9 0.08
KODD100 297 346 49 4.23 2.41 2.55 137.8 3.38
Note: Intersections calculated using 5 meter minimum thickness, 5 meter maximum included waste.
(*) Previously released drill hole.
  • The gold and base metal mineralized rocks at Korkan East show characteristic features of carbonate replacement deposits; the link with the nearby lower temperature sediment-hosted gold is unclear at this time.
  • Multiple gold mineralized intercepts per hole are a common feature of the gold mineralization outlined to date in the Bigar Hill and Korkan target areas.

3. CANADIAN NATIONAL INSTRUMENT 43-101 COMPLIANT RESOURCE ESTIMATION

  • Following site visits by international consultants AMC Consultants (UK), the Korkan exploration database has been delivered to AMC in order to undertake independent resource estimation.
  • It is planned to complete the initial Canadian National Instrument 43-101 compliant resource estimate on Korkan by the end of Q3, 2012.
  • The current Korkan database is based on 29,481 meters of RC drilling and 47,634.1 meters of diamond drilling for a total of 77,115.1 meters in 315 drill holes. The database includes over 190,000 analyses (gold, silver and sulfur) including 104,559 gold assays, of which approximately 26% are internationally accredited standards, blanks and routine QAQC duplicate and replicate check assays. All drill holes have been down-hole surveyed at regular intervals; with drill collars surveyed using DGPS or total station surveying methods. The topographic surface is based on detailed DGPS and total station surveying methods, with an average survey station spacing of approximately 15 meters by 15 meters. Over 6,385 bulk density measurements have been collected, using standard wax-sealed immersion methods. Over 18 diamond/RC drill pairs have been completed to date.
  • All drill hole assaying and bulk density measurements have been carried out independently by SGS.

4. GEOLOGY, MINERALIZATION STYLE AND DISCUSSION

  • 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 Timok Gold Project, 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 predominantly 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. Mineralization is also hosted in the underlying carbonate sequence, dominantly within tectonized structures.
  • The upper portion of the target stratigraphy consists of 'red' sandstones and volcanic-lithic clastic sediments, which are in turn, overlain by calcareous marls, andesitic volcanic and volcaniclastic rocks, representing the youngest portion of the target stratigraphy.
  • Figure 1 shows the location of the Korkan-Bigar trend and the Kraku Pestar target area within the greater sediment-hosted gold belt, as defined in this image by mapped 'target stratigraphy'. Figure 1 also shows anomalous gold soil geochemistry, on which the total metal contour plots, based on drill intersections, are superimposed. The significant potential of the belt can be clearly seen when the surface area of the mineralized 'footprints' of the currently drilled target areas within the Korkan-Bigar trend are compared to the overall extent of the presently defined gold soil anomalies.
  • A major sediment-hosted gold belt bordering the western boundary of the Timok Magmatic Complex, identified by soil and trench samples, extends over 30 kilometers along strike and is up to 8 kilometers wide.
  • Soil sampling has been completed to the south of the currently defined 30 kilometer strike in order to attempt to determine the overall extent of the belt which, based on the extent of mapped 'target stratigraphy', has the potential to be approximately 70 kilometers in length.
  • 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.
  • Avala intends to systematically explore all currently defined priority target areas on the belt.
  • 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/timok-gold-project

5. 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. Reverse circulation drill samples have been prepared at the laboratory facility at Bor and assayed at the laboratory at Bor. A one metre sampling interval has been used for the Sediment-Hosted Gold project reverse circulation drilling program. 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 Resources is a mineral exploration company focused on the exploration and development of the Timok Gold Project in Eastern Serbia. The Timok Gold Project comprises several targets, including Bigar Hill, Korkan, and Kraku Pestar. Avala controls 100% of this newly identified sediment-hosted gold belt which totals approximately 250 square kilometers. The common shares of Avala trade on the TSX Venture Exchange under the symbol AVZ.

Avala is well-capitalized, with approximately $16 million in its treasury at June 30, 2012, 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

This press release contains 'forward-looking information' within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "anticipate", "believe", "plan", "expect", "intend", "estimate", "forecast", "project", "budget", "schedule", "may", "will", "could", "might", "should" or variations of such words or similar words or expressions. Forward-looking information is based on reasonable assumptions that have been made by the Company as at the date of the information and is subject to known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated in the forward-looking information.

Forward looking information in this news release includes information with respect to the Bigar Hill mineral resource estimate and its potential expansion, the Company's plans to complete resource estimates on the Korkan and Kraku Pestar project areas, the timing and location of future work programs, the results and interpretation of studies and exploration activities, the nature of the mineralization of the project, the potential size of the sediment-hosted gold system, the possibility that the Timok Gold Project will prove to be economic, and the suggested similarity to the style of gold mineralization of the North Carlin Trend project.

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 factors that cause results to be other than as anticipated, estimated or intended. There can be no assurance that the forward looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information contained herein, except in accordance with applicable securities laws.

Figures 1, 2 and 3 and Table 1 are available at the following address: http://media3.marketwire.com/docs/avala0807.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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