Avion Gold Corporation

Avion Gold Corporation

January 05, 2011 08:00 ET

Avion Announces 4th Quarter Record Production of 26,121 Ounces

Quarter Over Quarter Increases Result in 2010 Annual Production of 87,661 Ounces, Exceeding Target

100,000 Ounces of Gold Planned for 2011

TORONTO, ONTARIO--(Marketwire - Jan. 5, 2011) - Avion Gold Corporation (TSX:AVR)(OTCQX:AVGCF) ("Avion" or the 'Company') is pleased to announce record monthly production of approximately 9,171 ounces of gold in December, 2010 from its Tabakoto/Ségala operations in Mali, West Africa, and record quarterly production of approximately 26,121 ounces of gold in the fourth quarter of 2010. The total annual production for 2010 was approximately 87,661 ounces of gold, and exceeded the upper end of the previous forecast range of 75,000 to 85,000 ounces of gold.

Throughout 2010, the Company has steadily increased ore grades, mill recoveries and gold production, as presented in the following production highlights (see table):

  Q1 Q2 Q3 Q4 2010 Total
Ore Milled (000 t) 156.1 183.1 178.8 187.8 705.9
Head Grade (g/t Au) 3.26 3.95 4.28 4.46 4.02
Mill Recovery (%) 96.5 95.8 96.2 97.3 96.5
Gold Production (oz)(1) 15,710 22,222 23,609 26,121 87,661
(1) December, 2010 ounces not adjusted to final refined product for the last Au shipment. This will be adjusted when the Company's 2010 financial statements are issued. Typical adjustments are ± 50 ounces.

During the month of December, the Company milled 67,800 tonnes of ore at an average grade of 4.37 g/t Au, with a 97.1% mill recovery.

Commenting on the 2010 production numbers, Avion's Chief Operating Officer, Mr. Andrew Bradfield, stated: "Avion's focus on this mine in 2009 resulted in a highly successful start up and set the stage for growth in 2010 and beyond. Operations in 2010 improved over the year as Avion's understanding of the ore deposits increased resulting in more efficient and profitable extraction of gold. Efforts in 2010 also concentrated on preparing for both underground mining and doubling the process plant capacity, which management expects will lead to production of 200,000 ounces of gold per year."

100,000 Ounce Production Planned in 2011

Mill feed plans for 2011 include open pit mining at the Dioulafoundou deposit, underground development ore from the Tabakoto deposit, and stockpile reclamation of ore from the Ségala open pit that was mined out in 2010. It is expected that ore derived from the Dioulafoundou pit and Tabakoto underground development will be higher grade than that mined at the Ségala Pit in 2010. Several other ore zones will be available to provide alternative open pit ore sources (Tabakoto South and Djambaye II zones) with these being developed as required and as equipment availability permits. Underground development of the Ségala deposit is planned to be well underway during the year. Gold production is estimated at approximately 22,000 ounces during the first quarter, increasing to 27,000 ounces in the fourth quarter as the amount of development ore from Tabakoto underground increases.

Avion has ordered a SAG mill from Polysius Corporation, which management expects will have the longest manufacturing time of any single item required for the plant expansion project. Activities in early 2011 will concentrate on ordering equipment for the expansion, and then the focus will shift to construction at the mine site.

In 2011, Avion will report its production results on a quarterly basis.

Andrew Bradfield, P.Eng., the Chief Operating Officer of the Company, and a qualified person under National Instrument 43-101, has reviewed the scientific and technical information in this press release.

About Avion Gold Corporation

Avion is a Canadian-based gold mining company focused in West Africa that holds 80% of the Tabakoto and Ségala gold projects in Mali. Gold production commenced at these projects in 2009 with just over 51,000 ounces produced. 2010 production was 87,660 ounces of gold. Production sustainability has been supported and enhanced by an aggressive 2010 drill program over an approximately 600 km2 exploration package that both surrounds and is near to the Company's existing mine infrastructure. The current mineral resources estimate for the Tabakoto project demonstrates several sources of excellent grade open pit and good grade underground mineral resources thus providing significant flexibility for Avion's future mining plans. Additionally, the 1,670 km2 Houndé exploration property in Burkina Faso has returned promising results. These properties have been the subject of an approximate US$ 12 million dollar, approximate 70,000 metre, drill-focused, exploration program in 2010. Avion continues to progress towards its medium term goal of 200,000 ounces of gold per year and a longer term goal of organic growth through development of its exploration properties. The Company is developing an underground mine at the Tabakoto deposit, and is preparing to mine underground at the Ségala deposit. Avion has a highly skilled management team, with a focus on growth and consolidation within West Africa.

Cautionary Notes

The ability of Avion to increase production to 200,000 ounces of gold per year has not been the subject of a feasibility study and there is no certainty that the proposed expansion will be economically viable.

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements with respect to the development potential and timetable of the Tabakoto, Ségala, Kofi and Houndé projects; the future price of gold; the estimation of mineral resources; conclusions of economic evaluation (including scoping studies); the realization of mineral resource estimates; the timing and amount of estimated future production, development and exploration; costs of future activities; capital and operating expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to those risks described in the annual information form of the Company which is available under the profile of the Company on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

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