Avion Gold Corporation

Avion Gold Corporation

July 07, 2011 07:00 ET

Avion Announces Q2 Gold Production of 25,800 Ounces

Continues on Track to Produce 100,000 Ounces of Gold in 2011

TORONTO, ONTARIO--(Marketwire - July 7, 2011) - Avion Gold Corporation (TSX:AVR)(OTCQX:AVGCF) ("Avion" or the 'Company') is pleased to announce second quarter of 2011 production of approximately 25,823 ounces of gold from its Tabakoto/ Ségala operations in Mali, West Africa. This amount exceeded Avion's second quarter budget of 24,500 ounces, and brings production in line with the Company's guidance of 100,000 ounces in 2011.

During the second quarter of 2011, the Company milled 197,100 tonnes of ore at an average grade of 4.21 g/t Au, with a 96.6% mill recovery. The table below presents 2011 year-to-date production results:

Ore Milled (000's tonnes) 180.8 197.1 377.9
Head Grade (g/t Au) 3.64 4.21 3.94
Plant Recovery (%) 96.2 96.8 96.6
Gold Production (oz)(1) 20,272 25,823 46,095
  1. Ounces adjusted to final refined product

Commenting on the second quarter 2011 production numbers, Avion's Chief Operating Officer, Mr. Andrew Bradfield, stated: "Underground development at Tabakoto is on track. Besides ore mined from Tabakoto underground, ore is also being mined from several open pits, namely, Dioulafoundou, Tabakoto South and Ségala NW as required. The mill expansion project is proceeding on plan, and the transition year of 2011 is progressing well as the Company strives towards its goal of producing at a run rate of 200,000 ounces of gold per year in 2012."

Over 3,500 metres of underground development has been achieved at Tabakoto. Eight ore zones are being developed. Four additional ore zones are planned to begin development in the third quarter of 2011. Two ore zones are currently being developed on the first sublevel down giving a total of two levels of development.

Preparations to start underground development of the Ségala deposit in the third quarter of 2011 are continuing. Most of the required surface infrastructure is in place, and the east wall cutback for the underground portal location is scheduled to be completed this month.

The Company continues on plan and budget for its plant expansion project to increase processing capacity from 2,000 tonnes per day to 4,000 tonnes per day in 2012. Construction is well underway, with several major cement pours accomplished. Approximately 80% of the required plant equipment has been ordered, and almost half of the budget has been committed, equivalent to over US$32 million.

Andrew Bradfield, P.Eng., the Chief Operating Officer of the Company, and a qualified person under National Instrument 43-101, has reviewed and approved 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 approximately 51,290 ounces produced. 2010 production was 87,630 ounces of gold. Production sustainability will continue to be supported and enhanced by an aggressive 2011 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 reserve estimate for the Tabakoto Project demonstrates several sources of excellent grade open pit and good grade underground mineral reserves that provide significant flexibility for Avion's future mining plans. Additionally, the 1,670 km2 Houndé exploration property in Burkina Faso continues to return promising results. These properties are subject to a current US$ 13 million dollar, approximate 75,000 metre, drill-focused, exploration program in 2011. 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 with over 3,500 metres of development completed to date 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

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 timing and amount of estimated future production, the development potential and timetable of the Tabakoto, Ségala, Kofi and Houndé projects; the future price of gold; the estimation of mineral resources and mineral reserves; conclusions of economic evaluation (including scoping studies); the realization of mineral resource and mineral reserve estimates; 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.

Website: www.aviongoldcorp.com and follow us on Twitter at: AvionGoldAVR.

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