Avion Gold Corporation

Avion Gold Corporation

May 18, 2010 07:30 ET

Avion Commences 5,000+ Metre Drill Program at Hounde, Burkina Faso

Following Up Intersections of Up to 8.91 g/t Au Over 21 Metres

TORONTO, ONTARIO--(Marketwire - May 18, 2010) - Avion Gold Corporation (TSX VENTURE:AVR)(OTCQX:AVGCF)(PINK SHEETS:AVGCF) ("Avion") is pleased to announce the initiation of diamond drilling program on the Houndé Property in Burkina Faso, that Avion has agreed to acquire from Avocet Mining PLC (see Avion news release, January 29, 2010).

This very large, 1,670 km2 property, lies within an emerging gold camp and is 60 kilometres southwest of SEMAFO's Mana Mine. The Mana Project has Mineral Reserves and Resources totaling 2.35 million ounces Au and Inferred Resources totaling 0.91 million ounces (see attached Figure).

Avion has just commenced a minimum 5,000 metre diamond drill program. This program is designed to both better define existing zones, and to discover new zones. Approximately 40% of the drill program is scheduled to further test the Vindaloo Zone which returned drill intercepts of up to 8.91 g/t Au over 29 metres core length. All drill holes have intersected gold mineralization to a depth of less than 100 metres along a 675 metre strike and the average of ten intersections at 4.71 g/t Au over 21.0 metres. Mineralization remains open along strike and at depth, with soil sampling suggesting that mineralization extends for at least 700 metres to the southwest.

In the latter part of April and the beginning of May, Avion completed an airborne magnetic and radiometric survey over the 1,670 km2 Houndé property. The airborne magnetic data has indicated numerous structures, some of which, from a preliminary data review, are related to the known mineralized zones. The presence of additional, similar structures, not associated with known gold zones, suggest potential for the discovery of new gold zones. Soil surveys and mapping are being carried out to generate new drill targets.

Field work on the property commenced approximately one month ago. Exploration has focused on the documentation of extensive artisanal works, the collection of over 2,700 soil samples and compilation of available data. This compilation work has led to the recognition of several other gold zones (see figure) the best of which returned 3.47 g/t Au over 18.0 metres core length (Kari South zone). This hole ended in mineralization. The area proximal to this hole displays quartz veining, alteration and artisanal pitting along a 1,000 metre strike length.

John Begeman, Avion's President and CEO, stated, "The Houndé Property zones display an excellent target for resource growth. This recent data confirms our belief that the Houndé property is highly prospective, and I look forward to more results and a resource being quantified by year end."

Don Dudek, P.Geo., the Senior Vice President, Exploration of the Company and a qualified person under National Instrument 43-101, has reviewed the scientific and technical information in this press release. 

The mining industry in Burkina Faso is growing at a rapid rate due to a combination of a stable elected democratic government, excellent geology and a competitive fiscal regime. Currently six gold mines are in production or development in Burkina Faso (Essakane – IAMGOLD Corporation, Mana - SEMAFO, Inata – Avocet Mining PLC, Youga - Etruscan Resources Inc., Taparko – High River Gold Mines Ltd., Kalsaka – Cluff Gold PLC). In 2011, it is expected that Burkina Faso will become the fourth largest gold producing country in Africa. The country has legislated low taxes, with an income tax rate of 20% and a corporate profits tax of 20% for mining companies. There is a three-year tax holiday during construction that includes relief from VAT and custom duties during construction and reduced customs duties of 7.5% during mining operations. The government is entitled to a 10% free carried interest and a reasonable 3% Royalty on gold production.

About Avion Gold Corporation

Avion is a Canadian-based gold company focused in West Africa. The Company holds 80% of the Tabakoto and Segala gold projects in Mali. Gold production commenced at these projects in 2009 with just over 51,000 ounces produced in 2009. Avion's 2010 production goal is estimated at 75,000 to 85,000 ounces of gold. The longer term goal of the Company is to increase production to 200,000 ounces in 2012. 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 regarding the impact of the drilling results on the Company; statements with respect to the development potential and timetable of the Mali 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: general business, economic, competitive, geopolitical and social uncertainties; the actual results of current exploration activities; ability to successfully integrate the purchased properties; foreign operations risks; other risks inherent in the mining industry and other 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.

To view the figure associated with this press release, click the following link: http://media3.marketwire.com/docs/avgcf0518fig1.pdf.


Contact Information

  • Avion Gold Corporation
    Don Dudek
    Senior Vice President Exploration
    (416) 861-2261