Avala Resources Ltd.
TSX VENTURE : AVZ

Avala Resources Ltd.

February 10, 2011 08:30 ET

Avala Resources Continues to Expand the Korkan-Bigar Target Area with Wide-Spaced Diamond Drilling: Intersects 21 Meters at 1.68g/t, 24 Meters at 1.56g/t and 16.8 Meters at 2.07g/t Gold

LONGUEUIL, QUEBEC--(Marketwire - Feb. 10, 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 intensely altered and decarbonatized conglomerates and sandstones with interbedded fine grained sandstone and clay-rich siltstones.
  • Drilling of the Korkan-Bigar target area returned the following wide, near surface, gold intercepts (0.4g/t cut-off grade):
    • KODD009 (located 80 meters east from discovery drill hole KODD001):

      • 21m @ 1.68g/t (from 34m)

        • Including: 18m @ 1.88g/t (from 34m)

      • 24m @ 1.56g/t (from 63m)

        • Including: 22m @ 1.65g/t (from 63m)

    • KODD016 (located 650 meters southeast from discovery drill hole KODD001):

      • 16.8m @ 2.07g/t (from 20.2m)

        • Including: 10m @ 3.22g/t (from 27m)

  • To date Avala has outlined gold mineralization over an approximate area of 700 meters by 300 meters surrounding the original discovery hole (KODD001). Avala intends to continue the wide-spaced drilling program to test the prospective 'target stratigraphy' which covers an area of approximately 3.5 square kilometers within the Korkan-Bigar target area so as to effectively scale the size of the newly defined sediment-hosted gold system.
  • Avala currently has six diamond drill rigs allocated to 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.
  • 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.
  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.
  • The Korkan-Bigar target area is underlain by massive Jurassic limestone, unconformably overlain by a polymict conglomerate and sandstone sequence with a carbonate matrix component which is the host to the strongly mineralized interval intersected by the initial drill hole KODD001 which returned 52 meters at 4.30g/t gold (previously reported in a news release dated Nov. 10, 2010).
  • Drilling has defined an interbedded fine grained sandstone and clay-rich siltstone unit which Avala believes represents an aquitard unit within the larger sedimentary package that defines the 'target stratigraphy'. This unit effectively outcrops in the Korkan-Bigar target area and is responsible for the lack of a gold geochemical response from soil sampling over the target area. The aquitard unit has also been outlined within the overall sedimentary package where it is generally not mineralized.
  • The 'target stratigraphy' is overlain by an unmineralized marl unit which in turn appears to be conformably overlain by andesitic volcanics and volcaniclastics. Avala believes that these overlying volcano-sedimentary units represent a barren 'cover' or 'capping' sequence. The polymict conglomerate and sandstone unit together with the aquitard unit, constitute the 'target stratigraphy'; which hosts the gold mineralization intersected to date and appears to have been very gently folded under the cover sequence and 'daylights' again at the northern part of the Bigar target area.
  • The Korkan-Bigar target area represents possible stratabound and fault-controlled sediment-hosted gold mineralization within a favourable sedimentary unit; the polymict conglomerate and sandstone.
  • 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.
  1. DRILLING AT KORKAN
  • Avala continues the 'step out' drilling at the Korkan-Bigar target area, on a nominal 160 meter by 160 meter spacing. The results of diamond drill holes KODD008 to KODD018 are discussed in this release. See Table 1 for a summary of all intersections at various cut-off grades.
Hole ID Target Area   From (m) To (m) Interval (m) Au
(g/t)
    Comments
KODD008 Korkan West   - - - -     Intersected aquitard unit from surface to limestone contact; up to 100ppb Au at the sediment-limestone contact.
KODD009 Korkan   34 55 21 1.68     Located 80m east from KODD001; confirms wide interval of gold mineralization within conglomerates and sandstones.
including     34 52 18 1.88    
and     63 87 24 1.56    
including      63 85 22 1.65    
and     105 110 5 0.84    
KODD010 Korkan   235 256 21 0.54     Wide low-grade intercept at the sediment-limestone contact.
KODD011 Korkan West   - - - -     Intersected aquitard unit from surface to limestone contact; up to 100ppb Au at the sediment-limestone contact.
KODD012 Korkan   232 237 5 0.58     Wide low-grade intercept at the sediment-limestone contact when employing a 0.1g/t cut-off.
KODD013 Korkan   54 66 12 1.26     Located 220m southwest from KODD001; mineralization remains open in this direction.
including     55 66 11 1.32    
KODD014 Korkan   - - - -     Intersected marls and aquitard unit from surface to limestone contact.
KODD015 Korkan   305 319 14 0.70     Multiple low grade intervals returned from the 'target stratigraphy' when employing a 0.1g/t cut-off; demonstrates the potential for stacked mineralization.
KODD016 Korkan   20.2 37 16.8 2.07     Demonstrates the potential for stacked mineralization.
including     27 37 10 3.22    
and     223 232 9 0.78    
KODD017 Korkan   Results pending
KODD018 Korkan   109 118 9 0.47     Multiple low grade intervals returned from the 'target stratigraphy' when employing a 0.1g/t cut-off; demonstrates the potential for stacked mineralization.
      200 208 8 1.60    
  • Figure 2 shows a plan view of the current drilling program annotated with significant intervals. Figure 3 shows a gram-meter (intervals >0.4g/t Au) x thickness, total metal contour plot of all Korkan-Bigar drilling to date superimposed on a revised target area geology map.
  • Strong gold mineralization is hosted within polymict conglomerate and sandstone intervals which have been strongly decarbonatized with intense, sooty, fine grained pyrite matrix infill. The target stratigraphy unconformably overlies massive Jurassic limestone. To date gold mineralization within the footwall massive limestone has been of an overall low tenor and is generally associated with brittle deformation i.e. brecciation.
  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.
  • At Korkan, initial diamond drilling and at Bigar, trenching, have outlined significant gold mineralization over a north-south length in excess of 4 kilometers, associated with polymict conglomerate and sandstone which have been variably decarbonatized and mineralized with sooty, fine grained pyrite which contains significant gold values.
  • 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 effectively scale the potential size of the sediment-hosted gold system which appears to cover an 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. Trench samples were prepared at the SGS managed laboratory facility at Bor, Eastern Serbia and the samples have been assayed at the SGS managed laboratory at Chelopech in Bulgaria or the SGS managed laboratory facility at Bor, Eastern Serbia. Diamond drill core has been prepared at the SGS managed laboratory facility at Bor, Eastern Serbia and assayed at either the SGS managed laboratory at Chelopech in Bulgaria or the SGS managed assay laboratory at Bor, Eastern Serbia. 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 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 $31 million in its treasury at January 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 180,202,044 common shares, of which approximately 42.1% 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 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.

Figure 1, 2, 3 and Table 1 are available at the following link: http://media3.marketwire.com/docs/maps_avala0210.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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