Avion Gold Corporation
TSX VENTURE : AVR

Avion Gold Corporation

December 12, 2008 09:09 ET

Avion Plans to Start Production at Segala in February 2009 @ 66,000 Ounces in Year 1 Rising to 95,550 Ounces in Year 3

SCOPING STUDY ESTIMATES POTENTIAL 4 YEAR FREE CASH FLOW OF APPROXIMATELY US$ 60.4 MILLION AT US$ 750/OZ AU GOLD PRICE SEGALA AND TABAKOTO GOLD PROJECTS, MALI

TORONTO, ONTARIO--(Marketwire - Dec. 12, 2008) - Avion Resources Corp. ("Avion" or "the Company") (TSX VENTURE:AVR), today announced the results of a series of technical studies and a scoping study to complement its mining strategy to restart production at the Segala and Tabakoto gold projects in Mali (West Africa). Highlights of the studies include:

- Measured and Indicated mineral resource estimate of approximately 4,338,000 tonnes grading 3.50 g/t Au totaling 489,000 ounces

- Inferred mineral resource estimate of 4,072,000 tonnes grading 3.46 g/t Au totaling 452,600 ounces

- Projected two years of open-pit production at Segala with a 4:1 waste to ore ratio, followed by underground mining

- Projected US$10.34 million in free cash flow in 2009 on a project basis with a cumulative estimated free cash flow of approximately US$ 60.37 million over the four year plan based on a US$750/ounce gold price

As a first part to this strategy Avion commissioned a mineral resource estimate with P & E Mining Consultants Inc. which resulted in a Measured and Indicated mineral resource estimate on the Tabakoto and Segala properties of approximately 4,338,000 tonnes grading 3.50 g/t Au totaling 489,000 ounces of gold (see tables) and an additional Inferred mineral resource estimate of 4,072,000 tonnes grading 3.46 g/t Au totaling a further 452,600 ounces. Please see chart at end of the release for details of estimate. These resources estimates differ from those previously referenced by Nevsun Resources Ltd. as Avion has limited the scope of the Tabakoto resource review, where the bulk of the previous resources were defined, until an updated geological model can be developed. In addition Avion's resource consultant has determined that more of the Segala resource should be classified as Inferred as compared to previous studies.

Avion in conjunction with Mr. Milko Rivera, P. Eng. and Tim Mann, P. Eng., independent consultants, has developed a scoping study using only the estimated Measured and Indicated resources, for an initial four year mine plan, which contemplates commencing mining operations at Segala and to a lesser extent at Tabakoto. The scoping study contemplates two years of open-pit production at a 4:1 waste to ore ratio, followed by underground mining at Segala. Cost data used in the scoping plan were derived from two years of mining experience at the Tabakoto Mine, plus current quotes for services and an estimated cost for the 5 km haul road to Segala (see figure at end of release). The Company projects that the new plan could provide approximately US$10.34 million in free cash flow in 2009 on a project basis with a cumulative estimated free cash flow of approximately US$ 60.37 million over the four year plan based on a US$750/ounce gold price and including the capital required to initiate underground production. In total, the scoping plan indicates that over the four year period, Avion could produce 320,000 ounces of gold at an estimated life of project cash cost of US$467/oz. The above scenario is based upon the following assumptions and parameters:

- Capital costs as of January 1, 2009 of US$4.5 million, which Avion plans to fund through an operating loan with working capital to be sourced as deemed appropriate

- Mining rates varying from 2,070 tonnes per day at start-up to 2,466 tonnes per day for both open pit and underground at full production

- Gold recoveries of 90% with a conventional gravity/CIL plant with 65% of gold recovered by gravity

- Open pit ore recoveries of 95% and underground ore recoveries of 85% with dilution varying from 0 g/t Au to 0.6 g/t Au dependent on the plan for that part of the mineral resource

- All environmental and mining permits are currently in place

- Underground mechanized long hole retreat mining will commence in Q4 2010

- UG equipment will be leased

In conjunction with mining Avion would endeavor to complete sufficient drilling to support the conversion of Inferred resources to Measured and Indicated resources and thus potentially extend the projected life of the plan presented in the scoping study.

The newly estimated mineral resources and scoping study will be presented in a technical report that will be filed under the profile of the Company on SEDAR (www.sedar.com).

Tabakoto and Segala Projects

As reported on September 15, 2008, the Company along with Segala Project partner, Dynamite Resources Ltd., plans to focus on the Segala project during the first phase of a new mining strategy. Avion plans to commence mining operations at Segala with a projected two years of open-pit production (at a projected low-strip ratio), followed by underground mining. The Company believes that the new plan will realize robust and earlier-than-expected cash flow from operations; Avion plans to commence production to begin at Segala in mid-February 2009. The strategy is to mine near-surface mineral resources with minimum waste stripping and then proceed to underground mining.

"Management is excited about the new Segala and Tabakoto mining strategy developed and presented in September 2008. We believe that recent assays from Segala and Tabakoto supports our approach and continue to demonstrate the potential of the existing deposits, as well as surrounding target areas," commented John Begeman, President and CEO. "We have developed a plan for moving forward and are preparing to move forward to the next phase of the strategy as our team prepares for production, targeted for February 2009."

Avion enjoys the full support of the Ministry of Mines in Mali as per the following statement "Ministry of Mines : Mali as a 20 % partner on the Tabakoto and Segala proejcts is pleased that Avion has taken over the projects and fully supports their actions to bring these properties into production. The Ministry of Mines and the Department National de la Geologie et des Mines offer their full support."

Eugene Puritch, P. Eng. and Antoine Yassa, P. Geo. from P&E Mining Consultants Inc., a Qualified Person under NI 43-101 who is independent of the Company, is responsible for the mineral resource estimates presented herein and has reviewed the scientific and technical information in this document relating to those estimates. Milko Rivera, P.Eng and Tim Mann, P.Eng., who are Qualified Persons under NI 43-101 and independent of the Company, has prepared the scoping study for the Company and has reviewed the scientific and technical information in this document relating to the scoping study. Andrew Bradfield, P. Eng., COO of the Company and a qualified person under National Instrument 43-101, has reviewed the scoping study information presented in this press release. Avion has not completed a feasibility study on the Mali gold projects and there is no certainty the proposed operations will be economically viable. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

About Avion Resources Corp.

Avion is a Canadian-based exploration and development company focused on strategic acquisitions in Africa. Avion has a team of highly qualified geologists and operational staff that are focused on developing the Tabakoto and Segala properties. Avion currently holds 80% of the Tabakoto Mine and Mill complex and 40% of the Segala gold deposits in Mali.



Mineral Resources (1)(2)(3)(4)

Segala Open Pit Resource Estimate @ 1.4 g/t Au Cut-Off Grade (1)(2)(3)(4)
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Au Au
Classification Tonnes (g/t) (oz)
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Measured 17,000 2.65 1,500
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Indicated 1,506,000 2.65 128,200
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Measured & Indicated 1,523,000 2.65 129,700
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Inferred 3,000 2.91 300
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Segala Underground Resource Estimate @ 2.0 g/t Au Cut-Off Grade (1)(2)(3)(4)
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Au Au
Classification Tonnes (g/t) (oz)
----------------------------------------------------------------------------
Measured 4,000 4.43 600
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Indicated 2,474,000 4.02 319,900
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Measured & Indicated 2,478,000 4.02 320,500
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Inferred 4,069,000 3.46 452,300
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Tabakoto Open Pit Resource Estimate @ 1.4 g/t Au Cut-Off Grade (1)(2)(3)(4)
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Au Au
Classification Tonnes (g/t) (oz)
----------------------------------------------------------------------------
Measured 35,000 4.63 5,200
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Indicated 302,000 3.45 33,600
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Measured & Indicated 337,000 3.58 38,800
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Total Tabakoto & Segala Resource Estimate (1)(2)(3)(4)
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Au Au
Classification Tonnes (g/t) (oz)
----------------------------------------------------------------------------
Measured 56,000 4.01 7,300
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Indicated 4,282,000 3.50 481,700
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Measured & Indicated 4,338,000 3.50 489,000
----------------------------------------------------------------------------
Inferred 4,072,000 3.46 452,600
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(1) The Inferred Resources are in addition to the Measured and Indicated
Resources.
(2) The mineral resources have been classified in accordance with
requirements of NI 43-101 and the CIM standards. Resource estimates
based on a gold price of USD$750 per ounce.
(3) Eugene Puritch, P. Eng. and Antoine Yassa, P. Geo. of P&E Mining
Consultants Inc., Qualified Persons under NI 43-101, prepared the above
mineral resource estimates, and have reviewed the technical disclosure
herein relating to the resource estimates.
(4) Mineral resources that are not mineral reserves do not have demonstrated
economic viability.


Cautionary Notes

This press release contains forward-looking statements under Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the development potential and timetable of the Mali projects; the Company's ability to raise additional funds as necessary; 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 statements 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 statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Estimates regarding the anticipated timing, amount and cost of mining at the Mali projects are based on assumptions underlying mineral resource estimates and the realization of such estimates; results of previous mining activities at the projects, and detailed research and analysis completed by independent consultants and management of the Company; research and estimates regarding the timing of delivery for long-lead items; knowledge regarding the factors involved in building a mine and other factors that will be described in the technical report summarizing the scoping study that will be filed under the profile of the Company on SEDAR. Capital and operating cost estimates are based on results of previous mining activities, research of the Company and independent consultants, recent estimates of construction and mining costs and other factors that are set out in the scoping study.
Production estimates are based on mine plans and production schedules, which have been developed by the Company's personnel and independent consultants. Forward-looking statements are 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 statements, including but not limited to risks related to: timing and availability of external financing on acceptable terms; unexpected events and delays during construction, expansion and start-up; variations in ore grade and recovery rates; receipt and revocation of government approvals; actual results of exploration and mining activities; changes in project parameters as plans continue to be refined; future prices of gold; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements 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 statements. The Company does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.

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