Avala Resources Ltd.

Avala Resources Ltd.

October 07, 2010 08:30 ET

Avala Resources Intersects 83.5 Meters of 1.28 g/t Gold From a Depth of 2.5 Meters at Kraku Pestar in Serbia

LONGUEUIL, QUEBEC--(Marketwire - Oct. 7, 2010) - Avala Resources Ltd. (TSX VENTURE:AVZ) (the "Company" or "Avala") is pleased to present an update of the exciting sediment hosted gold district within the Cretaceous magmatic arc bordering the Timok Magmatic Complex ("TMC") in Eastern Serbia.

  • Major sediment hosted gold district identified in Eastern Serbia.
  • The district, as currently defined, is at least 20 km in length and up to 10 km wide and was identified by initial bulk leachable gold ("BLEG") and 80 mesh stream sediment sampling which returned an anomalous Au-As-Sb-Hg-Tl signature.
  • Follow-up soil sampling has identified 5 discrete 3-5 km long, north-west trending gold-in-soil anomalies which have returned up to 5g/t Au in soils.
  • Wide spaced trench sampling of the soil anomalies returned multiple, wide, high grade gold intercepts, including (0.4g/t cut-off grade):
    • Korkan
      • 59m @ 2.50g/t
      • 58m @ 2.61g/t
    • Bigar
      • 36m @ 3.68g/t
      • 36m @ 1.07g/t
    • Kraku Pestar
      • 38m @ 2.58g/t
      • 28m @ 2.56g/t
    • Umka
      • 22m @ 1.08g/t
      • 24m @ 0.62g/t
  • Initial diamond drilling on the first targets tested returns multiple, wide, near surface, medium grade gold intercepts including (0.4g/t cut-off grade):
    • Kraku Pestar
      • PEDD001:
        • 83.5m @ 1.28g/t (from 2.5m)
          • Including 19m @ 3.07g/t (from 21m)
      • PEDD002:
        • 15m @ 0.57g/t Au (from 57m)
        • 25m @ 0.52g/t Au (from 91m)
        • 11m @ 0.96g/t Au (from 127m)
        • 49m @ 1.23g/t Au (from 144m)
          • Including 26m @ 1.83g/t (from 154m)
      • PEDD004:
        • 35m @ 2.08g/t Au (from 2m)
          • Including 9m @ 6.56g/t (from 13m)
  • A 'Carlin-style' signature for the mineralization has been interpreted on the basis of:
    • The character of the sedimentary host.
    • The metal association (Au, As, Hg, Tl, S and Sb > base metals).
    • The high Au:Ag ratio.
    • The fine grained nature of the gold mineralization and association with pyrite.
    • The number of alteration styles including jasperoid and decarbonation of calcareous sedimentary rocks adjacent to the gold mineralization; including interbedded strongly faulted tuffaceous rocks with high pyrite content.
    • Late stage stibnite, realgar and orpiment mineralization.
  • Multiple targets remain to be tested and additional soil sampling has recently outlined a new zone, over 4.5 km in length, Strnjak, along strike from Umka.
  • Avala controls 100% of the newly discovered sediment hosted gold district which totals approximately 250 sq km. Gold deposits in the Republic of Serbia are subject to a 3% NSR.
  • Avala intends to systematically drill test all currently defined priority target areas. See Figures 1-6 at the end of this release for additional detail.

Sediment hosted gold mineralization, located along the western margin of the Timok Magmatic Complex, represents a previously unrecognized style of gold mineralization within the Timok region.

Geological mapping of the sediment hosted gold district suggests mineralization is associated with a complex geological and structural sequence of limestone/marble, calc-silicate hornfels, biotite-magnetite hornfels, monzonite (pre-ore Potoj Cuka stock), diorite dykes, andesitic volcanic and volcaniclastic rocks, schists and tuffaceous sedimentary rocks.

The district is extensively faulted and intruded by numerous diorite and monzonite complexes with associated thermally metamorphosed aureoles, indicating the potential for sufficient permeability and rheologic contrast for fluid movement and hydrothermal deposition.

At Kraku Pestar receptive calcareous rocks together with pre-mineral faults have been identified to date. Elevated gold grades are associated with decarbonated tuffaceous sediments which are interbedded with thermally metamorphosed marl (calc-silicate hornfels) and in the footwall monzonite where it is localized around brittle faults that cut the monzonite. The clastic rich sequence is depositionally overlain by a clean limestone and at higher structural levels by a thrust sheet of Jurassic limestone, each of which would have formed a permeability barrier to the vertical flow of hydrothermal fluids.

At Bigar, anomalous gold appears to be concentrated along the fault contact between Palaeozoic schist and Jurassic massive limestone with additional anomalous gold found in clastic horizons interbedded within the massive limestone.

At Umka, massive limestone dominates the surface outcrop, but what lies in the subsurface is currently unknown. The stratigraphy and also the abundant diorite porphyry occurrences suggest the possibility that the anomalous gold-in-soil geochemistry may be associated with contact-type skarn or replacement mineralization styles; however this possibility does not adequately explain the presence of anomalous As-Sb-Hg-Tl soil geochemistry generally associated with 'Carlin-type' deposits and that are not generally associated with higher temperature skarn or replacement systems.

Sedimentary rock hosted gold deposits, similar to the Carlin-type deposits in the Great Basin (USA) depend upon having permeability such that fluids deposit gold in fault rocks (Deep Star) or at rheologic boundaries such as at contacts between hornfels and unmetamorphosed country rocks (Betze, Goldstrike), or flow passively along reactive stratigraphy (West Leeville and Carlin) to form a stratabound deposit. In the structurally controlled deposits the gold will be focussed and the footprint generally small, whereas in the stratigraphically controlled deposits, the footprint may be large but the gold distribution may be somewhat erratic. Similar features, in particular potential stratigraphic controls, have been interpreted within the Kraku Pestar target area within the newly defined sediment hosted gold district.

Figure 1 (http://media3.marketwire.com/docs/Figure1a.pdf) shows the regional geology of the TMC and the sediment hosted gold district together with the Avala land position.

  • Extensive soil sampling programs have been used to follow-up initial BLEG and 80 mesh (0.18mm) stream sediment sampling.
  • An initial routine soil sampling spacing of 400m x 50m has been used with follow-up infill sampling at 200m x 50m together with additional 100m x 50m spacing over selected areas.
  • Numerous, extensive, multi-element soil anomalies have been outlined with individual gold values up to 5g/t.
  • Detailed geological mapping has shown that the multi-element soil anomalies coincide with 'erosional windows' through the overthrusted, massive Jurassic limestone sequence and their associated 'dispersion haloes'.
  • The soil anomalies exhibit a typical Carlin-style geochemical response with enhanced levels of Au-As-Sb-Hg-Tl.
  • Figure 2 (http://media3.marketwire.com/docs/Figure2a.pdf) shows the gold geochemistry response and target area locations within the sediment hosted gold district.
  • Key soil anomalies defined to date, include:
    • Korkan: 4.5 km x 1.0 km
    • Bigar: 3.7 km x 1.5 km
    • Kraku Pestar: 3.0 km x 1.0 km
    • Strnjak: 4.5 km x 1.0 km
    • Umka: 4.8 km x 1.0 km 
  • As previously reported, over 22,000m of trench sampling has been carried out over the majority of the major soil anomalies (excluding Strnjak), initially using a nominal 800m spacing along strike between trenches. Given the wide spacing of the initial trenching program a very large number of significant trench intercepts were returned from all the soil anomalies tested.
  • Table 1 (http://media3.marketwire.com/docs/Table1a.pdf) details trench intercepts at a range of cut-off grades for those anomalies which have been tested to date.
  • Figure 3 (http://media3.marketwire.com/docs/Figure3a.pdf) displays the location of the trench sampling to date and shows the widespread distribution of gold mineralization.
  • Figure 4 (http://media3.marketwire.com/docs/Figure4a.pdf) shows the Kraku Pestar area in detail with the location of trench sampling to date.
  • Highlights from each area include the following trench intercepts (based on a 0.4g/t Au cut-off grade and intercepts in italics representing previously released data*):
    • Korkan
      • JASTR009: 59m @ 2.50g/t
      • JASTR009: 58m @ 2.61g/t
    • Bigar
      • BITR001: 8m @ 2.32g/t
      • BITR001: 24m @ 1.02g/t
      • BITR002 : 12m @ 1.09g/t
      • BITR002: 12m @ 2.79g/t
      • BITR002: 36m @ 1.07g/t
      • BITR004: 8m @ 1.26g/t
      • BITR021: 36m @ 3.68g/t
      • BITR026: 6m @ 2.37g/t
    • Kraku Pestar
      • PETR002: 18m @ 1.81g/t
      • PETR002: 38m @ 2.58g/t
      • PETR033: 26m @ 1.80g/t
      • PETR034: 10m @ 2.01g/t
      • PETR035: 16m @ 1.01g/t
      • PETR035: 28m @ 2.56g/t
    • Umka
      • UMTR011: 10m @ 1.49g/t
      • PCTTR010: 22m @ 1.08g/t
  • Two prospect areas were selected for initial drill testing: Kraku Pestar and Bigar.
  • Figure 5 (http://media3.marketwire.com/docs/Figure5a.pdf) shows the Kraku Pestar area and the location of diamond drill holes collared to date. A number of drill holes were unsuccessful in reaching the target zones and are currently being re-drilled.
  • Figure 6 (http://media3.marketwire.com/docs/Figure6a.pdf) displays a cross section through the Kraku Pestar target with significant intercepts returned to date. Strong gold mineralization has been intercepted in decarbonated sediments and also within the footwall monzonite intrusion. Significant intercepts from the Kraku Pestar drilling are detailed in Table 2 (http://media3.marketwire.com/docs/Table2a.pdf) at a range of gold cut-off grades and include the following (0.4g/t Au cut-off grade and intercepts in italics representing previously released data*):
    • PEDD001: 
      • 83.5m @ 1.28g/t (from 2.5m)
        • Including 19m @ 3.07g/t (from 21m)
    • PEDD002: 
      • 15m @ 0.57g/t (from 57m)
      • 25m @ 0.52g/t (from 91m)
      • 11m @ 0.96g/t (from 127m)
      • 49m @ 1.23g/t (from 144m)
        • Including 26m @ 1.83g/t (from 154m)
    • PEDD003:
      • 9m @ 1.90g/t (from 32m)
      • 14m @ 0.70g/t (from 88m)
    • PEDD004:
      • 35m @ 2.08g/t (from 2m)
        • Including 9m @ 6.56g/t (from 13m)
    • PEDD008
      • 5m @ 0.66g/t (from 0m)
      • 11.6m @ 1.73g/t (from 21.8m)
        • Including 7.1m @ 2.64g/t (from 22.9m)
      • 14m @ 1.44g/t (from 88m)
    • PEDD010:
      • 8m @ 0.49g/t (from 19m)
      • 66m @ 1.05g/t (from 51m)
        • Including 5m @ 2.03g/t (from 53m)
        • Including 20.2m @ 1.82g/t (from 62m)
  • Elevated gold contents are associated with either (a) black, pyritic fault rock (cataclasite) derived from decarbonated pyroxene-hornblende-bearing tuffaceous sedimentary rock interbedded within the Cretaceous host sedimentary sequence or (b) thin dark pyritic shears containing gold which cut the footwall hornblende monzonite which has pyrite and locally chalcopyrite replacing mafic minerals, which represents disseminated alteration and mineralization.
  • The current drilling program is targeting stratabound gold mineralisation in receptive sedimentary units within the target stratigraphy, fault rocks associated with the 'edge' of the pre-ore Potoj Cuka monzonite stock and also potential rheologic boundaries as at the contact between hornfels and unmetamorphosed country rocks.
  • At Bigar two widely spaced (~800m) diamond drill holes were drilled within the western portion of the gold-in-soil anomaly with the following results (0.4g/t Au cut-off grade) and see also Table 2 (http://media3.marketwire.com/docs/Table2a.pdf):
    • BIDD001: 16m @ 0.68g/t (from 0m)
  • A major sediment hosted gold district has been discovered bordering the western boundary of the Timok Magmatic Complex and has been shown by soil sampling and trenching to extend over 20 km along strike and ~8 km wide.
  • Review of the geology and available drill intersections has confirmed the strong similarity to the style of gold mineralization typified by the North Carlin Trend, Nevada, USA.
  • At Kraku Pestar, the first target area to be drilled by widely spaced drill holes, significant gold mineralization has been intersected for over 250m along strike and 200m down dip with the mineralization open in all directions. The results to date are considered to be extremely encouraging as they represent the first systematic drilling into the first of five target areas within the currently defined 20 km x 8 km district.
  • Numerous additional priority targets have been identified within the exposed target horizons of Lower Cretaceous impure calcareous and volcanic derived sediments which are generally located adjacent to the pre-ore Potoj Cuka monzonite stock. The recognition that the multi-element soil anomalies defined to date define 'erosional windows' into the underlying stratigraphy beneath barren Jurassic limestone has reinforced the significant gold potential for the district.
  • The soil sampling and trenching program will be continued in order to define the extents of the sediment hosted gold district and further priority target areas are planned to be drilled as soon as the results of the current trenching program have been received and interpreted.
  • Further geophysical modelling along with detailed geological mapping is underway.
  • A metallurgical test work program has been initiated using the drill core collected to date.

The stream sediment samples have been dispatched for multi-element analysis by Inductively Coupled Plasma (ICP-MS) techniques using equipment at the ALS Chemex laboratory, Perth, Australia. The BLEG samples have been sent to SGS Welshpool, Perth, Australia for leach analysis by method BLL62N. 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 while gold has been assayed by low level detection fire assay method. For the majority of the trench sampling program a two metre sample interval has been used and the samples have been prepared at the SGS managed laboratory facility at Bor, Eastern Serbia and have been assayed at the SGS managed laboratory at Chelopech in Bulgaria. Following Avala standard procedures, a full suite of field and laboratory duplicates and replicates along with internationally accredited standards have been submitted with each batch of samples. 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 Kraku Pestar and Bigar diamond drilling program.

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 $19.6 million in its treasury at July 30, 2010, which it plans to use for the exploration and development of its mineral projects in Serbia. Avala's issued and outstanding share capital totals 146,284,237 common shares, of which approximately 50.2% 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 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.

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.

Figure 1: http://media3.marketwire.com/docs/Figure1a.pdf

Figure 2: http://media3.marketwire.com/docs/Figure2a.pdf

Figure 3: http://media3.marketwire.com/docs/Figure3a.pdf

Figure 4: http://media3.marketwire.com/docs/Figure4a.pdf

Figure 5: http://media3.marketwire.com/docs/Figure5a.pdf

Figure 6: http://media3.marketwire.com/docs/Figure6a.pdf

Table 1: http://media3.marketwire.com/docs/Table1a.pdf

Table 2: http://media3.marketwire.com/docs/Table2a.pdf

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