Avion Gold Corporation

Avion Gold Corporation

February 26, 2009 07:30 ET

Avion Resources Improves Segala Mine Plan

TORONTO, ONTARIO--(Marketwire - Feb. 26, 2009) - Avion Resources Corp. (TSX VENTURE:AVR) ("Avion" or the "Company") is pleased to announce that an updated Segala Mine plan demonstrates reduced costs and increased savings and results in a projected more profitable four year mine plan for the Company's Tabakoto project in Mali, West Africa. Measured and Indicated mineral resources remain the same as per the recent 43-101 report, however, the plan has been further studied and optimized to reduce operating costs and increase revenue and net cash flow as compared to the conservative plan presented in the January, 2009 scoping study.

In addition, Avion is pleased to announce that it is on track to meet its targeted 2009 production of 66,000 ounces of gold at its Tabakoto/Segala mine and mill complex. Highlights of the updated mine plan include:

- Redesign of the Segala open pits to reduce waste stripping ratios, and increase the resource tonnage mined. Different ramp designs and wall configurations have been engineered. The open pit production schedule has been refined with detailed pushback designs.

- Reduction in the amount of lower grade stockpile resource scheduled to the process plant.

- Lower open pit mining contracted operating costs and equipment mobilization costs.

- Reduction in explosives costs.

- USD1.0 million savings in start-up capital expenditures.

Underground mining as contemplated in the recent 43-101 report remains essentially the same with the exception of a slight reduction in mineral resources due to increased tonnage mined by open pit. Two consulting firms have been hired to further study underground mining and geotechnical aspects at Segala. A new resource model, which will focus on developing the underground mining potential, is being developed for the Tabakoto deposit. Exploration drilling at Tabakoto has intersected numerous gold mineralized zones that display sufficient grades and widths to potentially support an underground mining operation. Avion is optimistic that this opportunity will provide future growth for the company.

A table that compares key aspects of the updated plan completed in February, 2009, versus the plan in the NI43-101 report dated January, 2009, is presented below. Both plans are based on a gold price of USD750/oz.

2009 2010 2011 2012 TOTAL
Recovered Oz oz Jan. Plan 66,000 72,000 96,000 86,000 320,000
Au Feb. Plan 66,000 79,000 87,000 101,000 333,000
Operating Cost USD/oz Jan. Plan 493 553 418 431 467
per Oz Au Feb. Plan 505 462 449 395 447
Estimated Net USD Jan. Plan 10.3 8.7 22.7 18.7 60.4
Cash Flow millions Feb. Plan 10.7 17.1 17.6 26.0 71.4

John Begeman, President and CEO of Avion, commented, "Avion continues to provide excellent results. Improved mine plan economics and the recent start-up of the process plant demonstrate the Company's ability to reach its goal of becoming a successful gold producer".

As previously announced on February 9, 2009, Avion has also recently signed a letter of agreement to acquire all of the outstanding common shares of Dynamite Resources (TSX VENTURE:DNR) in exchange for common shares of Avion. Upon completion of the transaction, the combined company will have approximately CAD $13 million in cash and cash equivalents, as well as full ownership of the Segala and Tabakoto projects, subject to the Government of Mali's 20% interest. The transaction will also allow Avion to take advantage of the substantial exploration opportunities on its property and possible expansion of production capability.

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. 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 gold company focused in West Africa. The Company holds 80% of the Tabakoto and Segala gold projects in Mali (assuming completion of the Dynamite acquisition). Gold production at these projects has commenced, with approximately 66,000 ounces of production as projected in the scoping study for 2009 rising to almost 100,000 ounces by 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, but is not limited to, statements with respect to the future financial or operating performance of the Company, the prospective mineralization of the properties, planned exploration programs, anticipated production schedule and terms, the completion of the Dynamite acquisition and the effect of contracts and appointments on the Company. 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; acquisition risks; and other risks of the mining industry. 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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