Avala Resources Ltd.
TSX VENTURE : AVZ

Avala Resources Ltd.

April 11, 2011 08:30 ET

Avala Resources Confirms Strong Gold Mineralization Over Two Kilometers on the Korkan-Bigar Target Area: Intersects 26 Meters at 2.26g/t, 15 Meters at 2.82g/t Gold With Drilling and 148 Meters...

...at 1.74g/t Gold in Surface Trench

LONGUEUIL, QUEBEC--(Marketwire - April 11, 2011) -Avala Resources Ltd. (TSX VENTURE:AVZ) (the "Company" or "Avala") is pleased to present an update on drill results from the Korkan-Bigar target area, part of the sediment-hosted gold belt within the Cretaceous magmatic arc bordering the Timok Magmatic Complex ("TMC") in Eastern Serbia.

  1. HIGHLIGHTS
  • Wide-spaced 'step out' drilling on the Korkan-Bigar target area 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.
  • Drilling of the Korkan-Bigar target area (Bigar Hill) returned the following wide gold intercepts (0.4g/t cut-off grade):
    • BHDD005:
      • 5m @ 2.40g/t (from 118m)
      • 26m @ 2.26g/t (from 133m)
        • Including: 20m @ 2.82g/t (from 134m)
      • 8m @ 1.37g/t (from 178m)
      • 20m @ 0.76g/t (from 258m)
    • BHDD007:
      • 11m @ 0.69g/t (from 180m)
      • 15m @ 2.82g/t (from 227m)
        • Including: 9m @ 4.44g/t (from 233m)
  • Trenching of the Korkan-Bigar target area (Bigar Hill) returned the following wide, gold intercept (0.4g/t cut-off grade):
    • BITR064
      • 148m @ 1.74g/t
        • Including: 38m @ 3.75g/t & 30m @ 2.35g/t (from 270m & 320m)
  • To date Avala has outlined gold mineralization at Korkan over an area of approximately 700 meters by 300 meters surrounding the original discovery hole (KODD001) and an area of 500 meters by 300 meters in the Bigar Hill area (open in all directions) . Avala intends to continue the wide-spaced drilling program to test the prospective 'target stratigraphy' within an initial area of over 3.5 square kilometers in the Korkan-Bigar target area, in order to outline the size of the newly defined sediment-hosted gold system.
  • The combined Korkan-Bigar target area is over 10 kilometres long and 2.5 kilometers wide and represents the northern portion of the sediment-hosted gold belt.
  • Avala currently has six diamond drill rigs operating on the Korkan-Bigar target area. One diamond drill rig has 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 1,000 meter centers within the target stratigraphy.
  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.
  • In the Korkan-Bigar target area, stratabound and fault-controlled sediment-hosted gold mineralization is hosted within a favourable sedimentary unit; a polymict conglomerate and sandstone with a carbonate matrix component which is the host to the strongly mineralized interval intersected by the initial drill hole KODD001 that returned 52 meters at 4.30g/t gold (previously reported in a news release dated Nov. 10, 2010). This target unit is underlain by massive Jurassic limestone.
  • Overlying the 'target' sequence is a barren interbedded fine grained sandstone and clay-rich siltstone unit which is considered to have acted as a 'capping' unit to the gold mineralization. This unit outcrops in the Korkan-Bigar target area and, along with overlying unmineralized marls and andesitic volcanics and volcaniclastics, is responsible for the lack of a gold geochemical response from soil sampling over the target area.
  • The 'target stratigraphy' appears to have been very gently folded under the cover sequence and 'daylights' again at the northern part of the Bigar target area.
  • Figure 1 shows the location of the Korkan-Bigar target area within the 20 kilometer long sediment-hosted gold belt, defined in this image by anomalous gold soil geochemistry together with drill hole collar locations.
  1. DRILLING & TRENCHING AT KORKAN-BIGAR
  • Bigar Hill: Avala is continuing the 'step out' drilling program at the Korkan-Bigar target area, on a nominal 160 meter by 160 meter spacing. The results of diamond drill holes BHDD001 to BHDD007 are discussed below. See Tables 1 for a summary of all intersections at various cut-off grades.
  • Figure 2 shows a plan view of the current drilling program annotated with significant intervals. Figure 3 shows a gram-meter (intervals greater than 0.4g/t Au) x thickness metal contour plot of all Korkan-Bigar drilling to date superimposed on mapped geology.
  • Strong gold mineralization is hosted within polymict conglomerate and sandstone intervals which have been strongly decarbonatized with intense, sooty, fine grained pyrite matrix infill. To date gold mineralization within the footwall Jurassic massive limestone at Korkan-Bigar has been of an overall low tenor and is generally associated with brittle deformation i.e. brecciation.
  • Additional drilling was completed within the Korkan target area and results have been returned for the following eight drill holes: KODD017, KODD019 to KODD021 and KODD023 to KODD026; no significant intervals were returned from these holes using a 0.4g/t cut-off. Generally, the 'target stratigraphy' was intersected but was only sporadically mineralized. See Figure 2 & Table 2.
Hole IDTarget AreaFrom (m)To (m)Interval (m)Au
(g/t)
Comments
BHDD001Bigar Hill758050.44Intersected minor volume of clastic sediments prior to the footwall limestone.
BHDD002Bigar Hill4868200.57Intersected minor volume of clastic sediments prior to the footwall limestone.
BHDD003Bigar HillNSRIntersected unmineralized target stratigraphy.
BHDD004

Including

Including
Bigar Hill



49
52
121
125
195
92
63
145
139
200
43
11
24
14
5
0.67
1.28
1.05
1.47
0.90
Multiple mineralized horizons within calcareous sandstones.


BHDD005

Including


Including
Bigar Hill




118
133
134
178
258
265
123
159
154
186
278
271
5
26
20
8
20
6
2.40
2.26
2.82
1.37
0.76
1.41
Multiple mineralized horizons within calcareous sandstones.



BHDD006Bigar Hill8698121.32Mineralized calcareous sandstones.
including869591.51
BHDD007

Including
Bigar Hill180
227
233
191
242
242
11
15
9
0.69
2.82
4.44
Strongly mineralized calcareous sandstones immediately above the footwall limestone.
BITR064
Including
and
Bigar Hill
(Trench)
270
270
320
418
308
350
148
38
30
1.74
3.75
2.35
Mineralized coarse calcareous sandstones.

  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.
  • 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 lithological and stratigraphic unit has significant implications for the gold potential of the Korkan-Bigar target area and the entire sediment-hosted gold belt.
  • Drill testing of the Korkan-Bigar sediment-hosted gold target area will continue with wide spaced (nominal 160 meter by 160 meter) diamond drill holes to allow Avala to outline the potential size of the sediment-hosted gold system within an initial area of approximately 3.5 square kilometers.
  • In addition, the Jurassic limestone package has strongly anomalous gold in soil geochemistry where it is exposed in the Korkan-Bigar target area 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.
  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 Belt diamond 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 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 $47 million in its treasury at March 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).

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.

Maps and tables associated with this release are available at the following address: http://file.marketwire.com/release/avz.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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