Avala Resources Ltd.
TSX VENTURE : AVZ

Avala Resources Ltd.

March 05, 2012 07:59 ET

Avala Resources Provides Update on the Korkan Resource Definition Drilling Program, Serbia

LONGUEUIL, QUEBEC--(Marketwire - March 5, 2012) - Avala Resources Ltd. (TSX VENTURE:AVZ) (the "Company" or "Avala") is pleased to provide an update on the Korkan target area, part of its Timok Gold Project, a new gold discovery in an emerging sediment-hosted gold belt located in a proven and prolific copper-gold mining district, the Timok Magmatic Complex ("TMC") in Eastern Serbia. The Timok Gold Project (formerly referred to by the Company as the sediment hosted gold project or the Potoj Cuka gold project) is comprised of several target areas including Bigar Hill, Korkan and Kraku Pestar. Avala controls 100% of this newly identified sediment-hosted gold belt which totals approximately 250 square kilometres.

  1. HIGHLIGHTS
  • The Korkan resource definition drilling program commenced on January 9, 2012. The program is focused on establishing continuity of mineralization using 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, wide-spaced, 160 meter by 160 meter diamond drilling program, which started in November, 2010.
  • Resource definition reverse circulation (RC) drilling, the majority of which has been drilled on a nominal 40 meter by 40 meter grid spacing, at Korkan has returned the following strong to moderate, near-surface, gold intercepts (0.4g/t cut-off grade):
Hole ID From (m) To (m) Interval (m) Au (g/t) Gram-meters
KORC003* 63 101 38 1.78 68
KORC005 1 19 18 2.47 44
KORC006 1 9 8 3.56 28
KORC008 24 37 13 3.75 49
KORC009 3 21 18 1.43 26
KORC011 46 93 47 3.43 161
KORC012 44 106 62 1.11 69
KORC013 85 108 23 1.39 32
KORC015 95 108 13 3.78 49
KORC031 1 15 14 1.73 24
  • Note: Intersections calculated using 5 meter minimum thickness, 5 meter maximum included waste.
  • Note: The listing does not include 'twin' RC drill hole intersections of previously drilled diamond drill holes.
  • (*) Drill holes terminate in mineralization i.e. mineralization remains open at depth.
  • 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 (open to the northeast) and an area of 1,000 meters by 1,000 meters at the Bigar Hill target area (open to the west and east). Kraku Pestar has been traced over 600 meters by 300 meters and remains open to the south.
  • Resource definition drilling has also commenced on the Kraku Pestar target area, using a combination of RC and diamond drill rigs.
  • In addition, Avala intends to continue the wide-spaced, exploration drilling program, concomitant with the resource definition program, in order to continue to test the prospective 'target stratigraphy' within the Korkan-Bigar trend. The key aim of this aspect of Avala's exploration program is to effectively outline the size of the newly defined sediment-hosted gold system.
  • Avala currently has eight diamond drill rigs and two RC drill rigs operating on the Korkan-Bigar portion of the sediment-hosted gold belt.
  • See Figure 1 for the location of Avala's Timok Gold Project licenses within the mapped sediment-hosted gold belt.
  1. GEOLOGY AND MINERALIZATION STYLE
  • Within the Korkan-Bigar trend, stratabound, fault-controlled breccia and minor karst-infill breccia represent the styles of sediment-hosted gold mineralization recognized to date.
  • Gold mineralization appears to be dominantly associated with fine-grained pyrite (sulfidation reaction) and a number of alteration styles including kaolinitization, decarbonatization of calcareous sedimentary rock adjacent to gold mineralization and occasionally, silicification.
  • 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.
  • Gold mineralization is hosted within a favourable sedimentary package - the 'target stratigraphy' - and consists predominantly of calcareous sandstones and conglomerates that 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 clastic sediments, which are in turn, overlain by calcareous marls, andesitic volcanic and volcaniclastic rocks. The andesitic volcanic and volcaniclastics are part of the Timok Magmatic Complex. The target stratigraphy is underlain by Jurassic and Lower Cretaceous limestones.
  • Figure 1 shows the location of the Korkan-Bigar trend and the Kraku Pestar target area within the 'target stratigraphy'. Figure 1 also shows anomalous gold soil geochemistry, on which the total metal contour plots based on drill intersections are superimposed.
  • New assay results from soil sampling of approximately 7 kilometers of strike, north of Korkan, have returned several high priority follow-up targets, with individual soil anomaly dimensions in excess of 1 kilometer by 1 kilometer.
  • 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.
  1. DRILLING AT KORKAN
  • Resource Definition Drilling (Korkan): Avala commenced RC drilling at Korkan on the 9th January, 2012.
  • The Korkan target area, approximately 1,200 meters by 600 meters, is being drilled on a nominal 80 meter by 80 meter grid spacing. In addition, a portion of the target area will be drilled on a nominal 40 meter by 40 meter grid spacing to provide geostatistical support for resource estimation purposes. Diamond 'twin' drilling of the RC drill holes will be carried out across the target area at a nominal rate of 15% of total RC drilling.
  • Refer to Table 1 for a summary of all intersections at various cut-off grades for the results of reverse circulation drill holes KORC001 to KORC033 and diamond drill holes KODD062, KODD064 to KODD069, KODD071 and KODD077, together with all previously reported Korkan 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 a representative cross-section through Korkan including recently completed infill RC drill holes.
  • 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.
  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 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 sediment-hosted gold 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.
  • Exploration drill testing within the Korkan-Bigar trend, and along strike, will continue with wide spaced (nominal 160 meter by 160 meter), exploration diamond drill holes, in conjunction with the ongoing resource definition drilling program, to allow Avala to outline the potential size and economic potential of the sediment-hosted gold system.
  • Avala controls 100% of this 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/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 Timok 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 Timok 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 are 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 is routinely entered into geology and structural geology spread sheets using Field Marshal software for subsequent inclusion in 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 $28.5 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 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. 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 results of the exploration activities and interpretation of such results, the nature of the mineralization of the project and the potential size of the sediment-hosted gold system, the suggested similarity to the style of gold mineralization of the North Carlin Trend project, the completion of a resource estimation, 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.

Maps and figures are available at the following address: http://file.marketwire.com/release/avz0305.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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