Avala Resources Ltd.
TSX VENTURE : AVZ

Avala Resources Ltd.

June 01, 2011 10:14 ET

Avala Resources Provides Exploration Update on the Sediment-Hosted Gold Belt, Serbia

LONGUEUIL, QUEBEC--(Marketwire - June 1, 2011) -Avala Resources Ltd. (TSX VENTURE:AVZ) (the "Company" or "Avala") is pleased to present an update on drill results from the Korkan-Bigar and Kraku Pestar target areas, part of the sediment-hosted gold belt within the Cretaceous magmatic arc bordering the Timok Magmatic Complex ("TMC") in Eastern Serbia.

"We continue to be very encouraged by the results of the wide-spaced drilling program on the Korkan-Bigar target area, in particular the Bigar Hill area, where we have established a very broad footprint to mineralization in a relatively short period of time," said James Crombie, President and CEO of Avala. "We expect to commence reverse circulation drilling in August and will be focussing on establishing continuity of mineralization. Additionally, we will continue to drill test the multiple target areas within the 20 kilometer long sediment-hosted gold belt defined to date."

  1. HIGHLIGHTS
  • Wide-spaced 'step out' drilling (nominal 160 meter by 160 meter) 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, marls and andesitic volcanics/volcaniclastics.

  • Drilling of the Korkan-Bigar target area (Bigar Hill) returned the following strong gold intercepts (0.4g/t cut-off grade):

Hole IDFrom (m)To (m)Interval (m)Au (g/t)Gram-meters
BHDD011118147291.9757
BHDD0162966371.3751
BHDD01713614267.3744
BHDD017194208143.0543
BHDD0206.23932.82.0467
BHDD021165178133.1841
BHDD02322.53411.51.8221
BHDD023122143211.5933
  • Drilling of the Korkan-Bigar target area (Korkan) returned the following gold intercept (0.4g/t cut-off grade):
Hole IDFrom (m)To (m)Interval (m)Au (g/t)Gram-meters
KODD044259273145.4476
  • 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.

  • Weighted averages of uncut grade and down hole intersection thickness per hole have been determined for the 160 meter by 160 meter spaced diamond drilling to date, based on a 5 meter minimum thickness and 5 meter maximum included waste and a range of gold cut off grades. Very encouraging mean grades and thicknesses have been returned. Multiple mineralized intercepts per hole are a common feature of the target areas, (as illustrated in Figure 3):

0.4g/t Au Cut Off1.0 g/t Au Cut Off
Target AreaNo. of HolesWeighted Average Grade (g/t)Weighted Intersection Thickness Per Hole
(meters)
No. of HolesWeighted Average Grade
(g/t)
Weighted Intersection Thickness Per Hole
(meters)
KORKAN151.842283.0121
BIGAR HILL141.5232122.2920
KRAKU PESTAR91.114062.3021
(Note: Down hole intersections do not necessarily represent true thicknesses)
  • 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 effectively 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 part of the northern portion of the sediment-hosted gold belt.

  • An initial selection of gold mineralized drill core intervals have been sent to SGS Cornwall for preliminary metallurgical test work; the program will focus on the preconcentration (flotation) characteristics of the gold mineralized clastic sediments.

  • Avala currently has four diamond drill rigs operating on the Korkan-Bigar target area. 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.

  • A Reverse Circulation (RC) drill rig (GEMEX RC-500) is expected to be onsite and operational during August 2011. The RC rig is scheduled to undertake infill drilling at an initial 80 meter by 80 meter spacing within the mineralized 'footprints' currently being outlined by the 160 meter by 160 meter diamond drilling program. Further drill rigs are currently being sought.

  • Additionally, Avala has submitted several exploration licence applications to the Serbian Ministry of Environment, Mining & Spatial Planning for areas that the Company believes are prospective for sediment-hosted gold style of mineralization within the Timok. Together with currently granted exploration licences, Avala believes that the overall strike length of the sediment-hosted belt could potentially increase from the currently defined 20 kilometers to approximately 50 kilometers.

  • 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. 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, 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 jasperoids.

  • 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 and andesitic volcanics, 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 in the Korkan-Bigar target area 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 and Kraku Pestar target areas 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 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. See Table 1 for a summary of all intersections at various cut-off grades for the results of diamond drill holes BHDD008 to BHDD023.

  • Figure 2 shows a gram-meter (intervals greater than 0.4g/t Au x thickness), total 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. Recent drilling has now also confirmed gold mineralization (BHDD014: 20m @ 1.65g/t Au (from 114m)) within the andesitic volcanics/volcaniclastics which were previously thought to be a poor host to gold. To date gold mineralization within the footwall Jurassic massive limestone at Korkan-Bigar has been of an overall low-moderate tenor and is generally associated with brecciation, either karst or brittle deformation.

  • Additional drilling was completed within the Korkan target area and results have been returned for the following nineteen drill holes: KODD022 and KODD027 to KODD044. See Figure 2 & Table 2.

  • Final assays have also been received from the Phase I wide-spaced diamond drill program on the Kraku Pestar target area (see AVZ press release Oct. 7th, 2010 for background information). See Figure 4 & Table 3.

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

  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 sedimentary package has significant implications for the gold potential of the Korkan-Bigar target area 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 4. Very encouraging grades and thicknesses have been returned. Multiple intercepts per hole are commonly encountered, particularly at Korkan and Bigar Hill.

Table 4: 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 Off1.0 g/t Au Cut Off
Target AreaNo. of HolesWeighted Average Grade (g/t)Weighted Intersection Thickness Per Hole
(meters)
No. of HolesWeighted Average Grade
(g/t)
Weighted Intersection Thickness Per Hole
(meters)
KORKAN151.842283.0121
BIGAR HILL141.5232122.2920
KRAKU PESTAR91.114062.3021
(Note: Down hole intersections do not necessarily represent true thicknesses)
  • 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 246 density samples have been collected and measured from samples returning greater than 0.1g/t Au and 85 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 2.63 tonnes per cubic meter, as summarised in Table 5 (note that there is currently a backlog of density samples from the Bigar Hill drilling).

Table 5: Bulk density data from the Sediment-Hosted Gold project.

0.1g/t Au Cut Off0.4g/t Au Cut Off
Target AreaAverage Bulk Density
(t/cm)
Number of MeasurementsAverage Bulk Density
(t/cm)
Number of Measurements
BIGAR HILL2.62112.543
KORKAN2.631402.6352
KRAKU PESTAR2.63952.5930
Average/
Total
2.632462.6185
(Note: Densities determined using the wax coating immersion method by SGS Bor)
  • 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 & Umka-Strnjak target areas 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 $44 million in its treasury at May 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.

Maps and tables are available at the following address: http://media3.marketwire.com/docs/avala0601.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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