Avion Gold Corporation
TSX VENTURE : AVR
OTCQX : AVGCF
PINK SHEETS : AVGCF

Avion Gold Corporation

July 07, 2010 07:00 ET

Avion Gold Produces 22,210 Ounces in Second Quarter of 2010, a 42% Increase Over First Quarter Production

With 8,960 Ounces Produced in June 2010, Avion Is On Track to Meet 2010 Production Targets

TORONTO, ONTARIO--(Marketwire - July 7, 2010) - Avion Gold Corporation (TSX VENTURE:AVR)(OTCQX:AVGCF)(PINK SHEETS:AVGCF) ("Avion" or the "Company") announces second quarter 2010 production of approximately 22,210 ounces of gold from its Tabakoto/Ségala operations in Mali, West Africa. This is a 102% increase in gold production over the second quarter of 2009, when 10,992 ounces of gold was produced, and a 42% increase in production over Q1 2010 where 15,710 ounces of gold was produced. Year to date gold production for 2010 is 37,920 ounces.

In June, 2010, Avion processed 60,000 tonnes of ore at an average grade of 4.85 g/t Au, with a 95.9% mill recovery, for gold production of 8,960 ounces. During the second quarter of 2010 the Company milled 183,100 tonnes of ore at an average grade of 3.95 g/t Au, with a 95.8% mill recovery, compared to second quarter of 2009 production of 182,600 tonnes of ore processed at an average grade of 1.99 g/t Au, with a 93.7% mill recovery. 2010 second quarter production was also markedly better than during the first quarter where some non-recurring plant mechanical and open pit production problems prevented optimum gold production. 

Commenting on the production results, Mr. Andrew Bradfield, Avion's Chief Operating Officer, stated: "Second quarter production was better than budgeted. High grade ore mined and milled from Ségala, combined with some surface mined ore from Tabakoto, were the main drivers for the better than planned production during the month. Avion continues to demonstrate its ability to meet its stated targets and is on track to produce between 75,000 and 85,000 ounces of gold in 2010".

Avion continues its infrastructure construction and equipment mobilization to prepare for the underground development of its Tabakoto deposit in Q3 of this year. The Australian underground mining contractor engaged by Avion has also incorporated a Malian subsidiary and is preparing to ship equipment and supplies to Tabakoto.

The Company has received its Environmental Permit to mine the Dioulafoundou Deposit. Preparations for mining, such as a stream diversion, fencing around the deposit, and access road construction are well underway, and the Company plans to commence mining the deposit beginning in mid-October this year, after the upcoming rainy season. Capital costs to develop Dioulafoundou are expected to be less than $1,000,000. The resource estimate for Dioulafoundou is being finalized now, and is expected to be released in the next month. In 2011, the Company plans to supplement Ségala open pit ore with production from Dioulafoundou, and development ore from Tabakoto and Ségala underground operations.

Preparations for the rainy season are essentially complete, including filling the diesel storage tanks to capacity, and ensuring that continuous diesel shipments are received. Current fuel capacity represents 85 days of production needs.

Tender documents for an Engineering, Procurement, Construction Management ("EPCM") contract have been sent to several firms for the process plant expansion project. The plant capacity has been planned to increase from 2,000 tonnes per day to 4,000 tonnes per day. Avion expects to award the contract in July, 2010.

Avion plans to release its Q2 Financial Results on Thursday August 26, 2010. Management plans to host a conference call following release of the results to the market.

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 is estimated at 75,000 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 the Company's existing mine infrastructure. Additionally, a new, 1,670 km2 exploration property in Burkina Faso is expected to return 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 is expected, based on results to date, to add new resources and future opportunities for Avion. Avion continues to progress towards its longer term goal of 200,000 ounces of gold per year and is preparing to mine underground at the Ségala and Tabakoto deposits. Avion has a highly skilled management team, with a focus on growth and consolidation within West Africa.

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.

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 and timing of the forecast production and 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.

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