Avion Gold Corporation
TSX VENTURE : AVR
OTCQX : AVGCF

Avion Gold Corporation

November 30, 2010 08:00 ET

Avion Further Extends Vindaloo Gold Zone With Additional Intersection of 3.14 g/t Au Over 39.8 Metres

700 Metre Long Zone Remains Open Along Strike and to Depth

TORONTO, ONTARIO--(Marketwire - Nov. 30, 2010) - Avion Gold Corporation (TSX VENTURE:AVR)(OTCQX:AVGCF) ("Avion" or "The Company") is pleased to announce the results of six additional holes that have tested the Vindaloo Zone and nearby target areas at the Houndé Project in Burkina Faso (see Figure). The Vindaloo Zone hosts an initial Indicated mineral resource of 883,000 tonnes grading 2.33 g/t Au totaling 63,000 ounces gold and an Inferred mineral resource of 5,725,000 tonnes grading 2.97 g/t Au totaling 547,000 ounces gold. 

Highlights of the new results are as follows:

  • 2.56 g/t Au over 29.0 metres in hole H-10-25 at Vindaloo Zone
  • 3.14 g/t Au over 39.8 metres in hole H-10-26 at Vindaloo Zone
  • 1.45 g/t Au over 36.0 metres in hole H-10-27 at Vindaloo Zone
  • 2.97 g/t Au over 18.0 metres in hole H-10-27 at Vindaloo Zone
  • 1.47 g/t Au over 56.9 metres in hole H-10-28 at Vindaloo Zone
  • 2.53 g/t Au over 18.3 metres in hole H-10-24 at Madras Zone

The Vindaloo Zone has been traced for 700 metres along strike, to approximately 200 metres depth and is open to the north, south and to depth. This zone correlates exceptionally well with a 3,400 metre long geophysical anomaly (induced polarization resistivity) that has only been tested for 700 metres of its strike length (see Figure). Parallel, untested geophysical anomalies of similar character occur both east and west of this target trend on the Houndé Project.

Avion completed two holes 100 metres to the north and two drill holes 100 metres to the south of the Avion's initial Vindaloo Zone drilling (see news release August 3, 2010). All four new holes intersected significant amounts of quartz-pyrite, stockwork-type, gold mineralization that is hosted by an intensely altered gabbroic intrusion. The holes tested the target stratigraphy at approximately 75 metre and 150 metre vertical depths. A summary of the recent drill hole intercepts are presented at the end of this news release.

John Begeman, Avion's President and CEO, stated: "These drill results continue to highlight the good grades and widths from the Vindaloo Zone on the Houndé Property, demonstrating the continued upside associated with this project. The step-out drilling 100 metres from each end of the known mineralization confirmed that the zone extends, and future drilling will test for further extensions. As a team we are optimistic that the current mineral resource will grow quite quickly with continued exploration drilling."

Avion also tested a known gold occurrence (Madras Zone) and geophysical resistivity anomaly located approximately 3.5 kilometres north of the Vindaloo zone. Avion's core hole returned an intercept of 2.53 g/t Au over 18.3 metres core length. The mineralization in this hole is hosted by a similar rock unit that hosts the Vindaloo zone. A previous intercept in this area returned 4.42 g/t Au over 12.0 metres core length. More work is required in this area not only to trace the Madras zone and associated resistivity anomaly, which is open along strike, but, to follow-up on a nearby intercept of 1.49 g/t Au over 12.0 metres on a parallel resistivity high.

As well, Avion completed a core hole approximately 2 kilometres south of the Vindaloo zone, along what may be the same mineralized trend as the Vindaloo zone. This hole intersected a 75 metre wide zone of sulphidized and altered gabbroic intrusion. This intercept lacked a significant amount of quartz veining and only returned a best value of 3.87 g/t Au over 0.4 metres. However, most of the samples of this intrusion contain low but anomalous amounts of gold. The drill hole did not penetrate the entire width of this altered intrusion. Higher gold grades often occur near the intrusive contacts.

An additional parallel zone of mineralization (Koho Zone, previously referred to as Vindaloo East Zone) is evident to the east of the Vindaloo zone (See Figure). Historic drill intercept highlights include 1.34 g/t Au over 7.0 metres, 8.7 g/t Au over 1.0 metre, 1.21 g/t Au over 6.0 metres, 1.82 g/t Au over 4.0 metres, 27.2 g/t Au over 2.0 metres and 2.19 g/t Au over 5.0 metres. This distinct mineralized feature is also associated with a strong resistivity high. Through a combination of geophysical data, soil data and artisanal workings, the Koho Zone can be traced for approximately 3,500 metres along strike. Additional drill testing of this zone is planned.

Gold mineralization in this very large 1,670 km2 property displays similar characteristics with SEMAFO's Mana Mine (which hosts estimated mineral reserves and resources totaling 2.35 million ounces of gold and Inferred mineral resources totaling 0.91 million ounces of gold), which is located in the same geological belt, 60 kilometres to the northeast. The property is centered approximately 250 kilometres southwest of Ouagadougou, the capital of Burkina Faso (see Figure 1) and is cut by both a major highway and a high voltage power line.

Several more holes are planned to test the Vindaloo zone in the fourth quarter of 2010, prior to the cessation of drilling for the Holiday season. The drilling program is currently testing other targets as part of the concession work commitments on the Company's Houndé Property concessions. The drill program is scheduled to resume in early February, 2011 with two drills.

Don Dudek, Avion's Senior Vice President Exploration stated: "The similarity of mineralization styles, the stockwork-type character of the mineralization, the intensity of the alteration system and the strong correlation between gold mineralization and the geophysical anomalies, indicate in management's view, tremendous potential for the discovery of a major deposit in the Vindaloo area. Our exploration team eagerly awaits the continuation of the drill program in this area."

Avion's procedures for handling core have been presented in previous news releases (See for example Avion News Release dated May 13, 2010).

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. 

Mining in Burkina Faso

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 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 mining company focused in West Africa that 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; 2010 production is estimated at close to 85,000 ounces. Production sustainability is supported and enhanced by an aggressive 2010 drill program over an approximately 600 km2 exploration package that both surrounds and is near to our existing mine infrastructure. Additionally, a new, 1,670 km2 exploration property in Burkina Faso is returning good results from an ongoing drill program. These properties are the subject of an approximate US$ 12 million dollar, 60,000 metre plus, drill-focused exploration program in 2010, which management expects, based on results to date, to add new resources and future opportunities for Avion. Avion continues to progress towards its longer term goal of producing 200,000 ounces of gold per year and has started development of an underground mine at the Tabakoto deposit, with plans to start another underground mine at its Segala 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 regarding the impact of the drilling results on the Company; statements with respect to the development potential and timetable of the Hounde project; 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.

Summary of Recent Vindaloo Zone and Area Drill Holes*

             
Hole From To Length Au g/t True Width Zone
  (m) (m) (m)   (m) estimated  
H-10-24 35.0 36.3 1.3 1.51   Madras
H-10-24 43.0 61.3 18.3 2.53   Madras
H-10-24 114.8 116.0 1.2 1.06   Madras
H-10-25 49.0 78.0 29.0 2.56 14.6 Vindaloo
  incl. 65.0 71.0 6.0 5.76   Vindaloo
H-10-25 91.3 101.0 9.7 2.48   Vindaloo
H-10-26 72.0 111.8 39.8 3.14 22.3 Vindaloo
  incl. 72.0 76.0 4.0 9.19   Vindaloo
  incl. 80.0 84.0 4.0 2.84   Vindaloo
  incl. 89.0 94.8 5.8 6.76   Vindaloo
H-10-27 108.5 109.5 1.0 3.66   Vindaloo
H-10-27 197.0 233.0 36.0 1.45 19.0 Vindaloo
H-10-27 245.0 263.0 18.0 2.97 9.5 Vindaloo
H-10-28 129.5 186.4 56.9 1.47 29.6 Vindaloo
H-10-29 110.3 110.7 0.4 3.87   Vindaloo?
H-10-29 124.3 125.1 0.8 1.25   Vindaloo?
* No assay samples were above the capping ranges defined in the recent resource estimate

To view the Vindaloo Zone Area Significant Results figure, please visit the following link:

http://media3.marketwire.com/docs/656592A.pdf

To view the Hounde Group Concessions figure, please visit the following link:

http://media3.marketwire.com/docs/656592B.pdf

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