Avion Gold Corporation
TSX VENTURE : AVR

Avion Gold Corporation

March 25, 2008 16:36 ET

Avion Resources Signs an Agreement to Acquire the Tabakoto and Segala Gold Projects in Mali

TORONTO, ONTARIO--(Marketwire - March 25, 2008) - Avion Resources Corp. (TSX VENTURE:AVR) ("Avion" or the "Corporation") is pleased to announce that it has executed a binding share purchase agreement (the "Agreement") that provides for the acquisition (the "Proposed Acquisition") of an 80% interest in the Tabakoto and Segala gold projects (the "Mali Projects") located in Mali, West Africa from Nevsun Africa (Barbados) Ltd., a subsidiary of Nevsun Resources Ltd. ("Nevsun"). The remaining 20% interest in the Mali Projects belongs to the Government of Mali. The Tabakoto project was previously a producing gold mine and has all mining infrastructure and processing facilities in-place. Nevsun previously spent approximately US$90 million in capital expenditures to construct the mine and currently has a tax pool of over US$100 million.

Commenting on the Proposed Acquisition, Avion's President and CEO, Mr. Rene Bharti stated, "This acquisition represents an exciting opportunity for Avion to acquire what it considers to be prospective gold properties and, if warranted, accelerate the projects' time-line to production without the burden of a large capital expenditure requirement. The new Avion will offer shareholders the potential for leverage to near-term gold production in a rising gold price environment. This acquisition is being made at an attractive price and complements our existing portfolio of exploration projects in Africa. Avion offers investors an exciting growth platform in West Africa, a region widely thought to be the new frontier for growth for the global mining industry."

Avion believes the Proposed Acquisition of the Mali Projects offers numerous benefits to the shareholders of the Corporation, including the following:

- Attractive acquisition price: Avion has agreed to pay US$20 million, plus a 1.0% net smelter return royalty, in consideration for a recently operating gold mine and a land package that includes a nearby deposit proximal (Segala) to the mine and a number of mine-scale exploration targets. As well, the Mali Projects are owed a fuel tax rebate of approximately US$6 million and has a capital tax pool of over US$100 million.

- Existing infrastructure in-place: Tabakoto mine infrastructure, processing facilities and camp is in-place and fully operational for near term production capability, significantly reducing start-up capital expenditures for Avion. Nevsun operated the Tabakoto Mine until September 2007 when it was placed under care and maintenance.

- Opportunity to use Avion's skilled technical team to improve operational efficiencies: Management believes that this project presents an ideal opportunity to take advantage of its skilled technical team to create a new resource model and mine plan involving both Mali Projects. Along with its current management team, Avion is adding additional management and directors who bring extensive exploration, development and mine operation experience including former senior management from Aur Resources Inc., Goldcorp Inc. and Desert Sun Mining Corp.

- Exposure to Mali, the second largest gold producer in Africa after South Africa: In 2007, approximately 2.0 million ounces of gold was produced in Mali, accounting for approximately 80% of the mining activity in the country. The Tabokoto and Segala projects are located just south of Anglogold Ashanti/IAMGOLD's Sadiola Mine (499,000 ounces of gold produced in 2006) and Randgold's Loulo Mine (264,647 ounces of gold produced in 2007).

- A platform for an aggressive exploration program in an area of proven producers: Highly prospective 175 km2 land package with eight targets identified by Avion's exploration team. Avion plans to commence an aggressive exploration program to expand and re-define mineral resources at the Mali Projects.

Nevsun had previously published a NI 43-101 compliant mineral resource estimate for the Mali Projects. Based on these estimates and its feasibility mine production plan, Nevsun commenced mining operations at Tabakoto expecting that 3.36 million tonnes of ore (assuming a gold price of $350/oz) would be processed at a rate of 650,000 tonnes per year, with a grade of 5.26 g/t of gold, to a depth of 210 metres at a 2.0 g/t gold cut off grade. In addition, Segala was to contribute 3.98 million tonnes grading 2.99 g/t yielding 382,505 oz Au to the mill after mining at Tabakoto was completed. According to the plan, the mine was expected to yield approximately 567,544 ounces of gold at an average waste to ore ratio of 15.4:1 with ore and waste totaling 52 million tonnes. During production, Nevsun only recovered approximately 100,000 ounces of gold at an approximate grade of 4.0 g/t of gold, representing an approximate 22% shortfall in expected ore grades at Tabakoto. As a result, Nevsun determined that it could no longer rely on the resource model used to calculate mineral reserves and resources and, accordingly, in December 2006 commenced developing another resource model for both Tabakoto and Segala.

Strategic Plan

Avion does not believe that the previous resource estimates for the Mali Projects are reliable and as such is treating the historic resources as a guide to coherent mineralization as opposed to a reserve estimate. Avion plans to focus its efforts on a drill program that will be designed to increase the confidence levels of the previous resources at Tabakoto and Segala and aggressively pursue satellite targets that could contribute additional gold resources in the immediate project area. For Tabakoto and Segala, Avion is targeting the identification of between 1.4 and 1.7 million ounces with a target grade of approximately 3.0 to 4.5 g/t of gold at the Mali Projects. However, at this time the target resource estimate is conceptual in nature as the information and analysis required to substantiate an estimate has not been completed. Avion can not be certain that further results and analysis will substantiate this estimate.

- Exploration - Upon closing of the Proposed Acquisition, Avion plans to begin a 10,000 meter drill program focused on better defining and expanding Nevsun's historical resources at the Tabakoto and Segala gold projects. Avion's exploration team has identified several preliminary drill targets and plans on completing a NI 43-101 compliant resource update in 2008. The Corporation will continue to explore the prospective land package for further expansions and deposits.

- Development - Avion plans to improve Nevsun's historical operational and economic efficiencies by: 1) implementing a new block model to utilize excess plant capacity and incorporate ore from the Segala Project; 2) put in-place a new experienced management and technical team; 3) develop the significant underground resource; and 4) explore the potential for heap leach processing.

- Production - With infrastructure in-place, Avion plans to re-start production at the Tabakoto Mine shortly after operational and economic feasibility has been determined.

Terms of the Acquisition

As consideration for the purchase of the Vendor's 80% interest in the Tabakoto and Segala gold projects, the Vendor will receive a cash payment of US$20 million. In addition to the cash payments, Avion will pay the Vendor a net smelter return royalty of 1.0%. Avion will have the option to buyout the net smelter royalty for US$2 million during the five years following the date of closing. Avion does not assume any interest-bearing debt as part of the Proposed Acquisition. Avion intends to complete an equity offering to finance the cash portion of the purchase price of the acquisition.

The Proposed Acquisition is scheduled to close on or before May 23, 2008, subject to a number of conditions, including financing and regulatory approval, including approval of the TSX Venture Exchange. Avion has agreed to a US$1 million break fee if the transaction does not close on or before May 23, 2008. To post the break fee, Avion has borrowed US$1 million from Aberdeen International Inc. ("Aberdeen"). Aberdeen is a related party of Avion as it owns more than 10% of the issued and outstanding common shares of Avion and has common officers and directors. The amount outstanding under the loan will incur interest at a rate of 10% per year, shall be secured against the assets of Avion and shall mature on September 30, 2008. Obtaining this loan from Aberdeen on short notice facilitated the execution of the Agreement.

The Corporation has engaged Canaccord Capital Corporation as financial advisor for the Proposed Acquisition.

Additions to Management and Board of Director

Avion continues to build on its experienced technical team by adding Andrew Bradfield as Chief Operating Officer and intends to nominate Bruce Humphrey, Peter Tagliamonte and John Begeman for election to the Corporation's Board of Directors, subject to regulatory approval. Subject to their election, the board and management of Avion will be comprised of the people listed below.

Stan Bharti is the Chairman of Avion and is a professional engineer. He is currently the President and Chief Executive Officer of Forbes & Manhattan, Inc., a private merchant bank operating in Canada, the United States and Western Europe. From February 2002 to April 2006, he was Chairman and a director of Desert Sun Mining Corp., a Toronto Stock Exchange-listed mining company which was acquired by Yamana Gold Inc. He has over 25 years of experience in operations, public markets and finance. Mr. Bharti is also a director of several public and private companies.

Rene Bharti is the President, CEO and Director of Avion. Mr. Bharti has held roles in several public and private companies, including those in the resource, technology, and entertainment sectors. Previously, Mr. Bharti also served as Vice President of Business Development for a publicly listed resource company with gold assets in the former Soviet Union. Mr. Bharti holds a Bachelor of Commerce (Honors) degree from Queen's University.

Bruce Humphrey brings a lifetime of mining industry experience, including having served as a former Chief Operating Officer at Goldcorp Inc. and most recently as President and Chief Executive Officer of Desert Sun Mining Corp. prior to its sale to Yamana Gold Inc.

Peter Tagliamonte was previously Vice President Operations and Chief Operating Officer of Desert Sun Mining Corp. He was responsible for developing the Jacobina Mine in Brazil into a 4,200-tonne-per-day mining operation. Mr. Tagliamonte has more than 20 years of progressive managerial experience in the mining industry. A professional mining engineer, he also holds an MBA from the Richard Ivey School of Business at the University of Western Ontario. He was recognized for his work in 2005 by receiving the Mining Journal's "Mine Manager of the Year" award.

John Begeman is a mining engineer with over 30 years of mining experience. He is currently the Chief Operating Officer of Zinifex Canada Inc. (formerly Wolfden Resources Inc.). He has previously served as Vice President, Western Operations of Goldcorp Inc.

Scott Moore is an experienced business executive with over 20 years in the resources and durable goods sector with Weyerhaeuser and several privately held firms. He holds a B.A. from the University of Toronto and an MBA from the Kellogg School of Management. Mr. Moore is currently VP Corporate Development for Aberdeen International Inc.

Andrew Bradfield is joining Avion as its Chief Operating Officer. He has over 24 years of operations, technical, and management experience in the mineral resource industry. He has held positions at mines in Australia, Canada, China, Ethiopia, South Africa and Sweden. His experience includes start-up, development, operations, as well as technical and financial evaluations. Mr. Bradfield was most recently VP, Operations for TVI Resources. Prior to joining TVI, he was the Chief Operating Officer for a mining and exploration company, which operates a diamond mine, and explores for diamonds and gold in China. He holds a Bachelor of Science (B.Sc. with honours) in Mining Engineering from Queen's University, Canada.

Don Dudek is the Senior Vice President Exploration at Avion. He has held increasingly senior roles with junior to senior exploration and mining companies over the past 25 years. Most recently Mr. Dudek served as Exploration Manager for Aur Resources Inc., which provided him the opportunity to evaluate hundreds of grass roots to advanced projects in Latin America and Africa. During his career Mr. Dudek was part of the team that discovered seven new base and precious metal deposits in Canada, one of which has been mined. He also supervised work at Aur's high profile La Verde Cu-porphyry deposit in Mexico. Mr. Dudek holds a B.Sc. Geology (honors) from the University of Saskatchewan.

Nejib Abba Biya is the Vice President Corporate Development for Avion. He has strategic connections across Africa, and is one of the founders of the African New Comers Association, as well as the founder and Chairperson of the African Training Employment Centre. Mr. Abba Biya has founded, ran and sold several technology companies over the past two decades. Mr. Abba Biya was born in Ethiopia, and holds a Bachelor of Commerce in Finance from the University of Toronto.

Dr. Peter MacLean is Avion`s Exploration Manager and was previously the Regional Exploration Manager for Aur Resources in Mexico from 2003 to 2007. With Aur, Dr. MacLean was instrumental in the acquisition and evaluation of the La Verde Cu-porphyry deposit. Dr. MacLean has also worked with other mining companies in Mexico and consulted for companies including Newmont Mining Corporation. Dr. MacLean acquired his Ph.D at the University of Western Ontario.

Keith Boyle, P.Eng., is a Special Consultant to the Company and has over 22 years experience in the mining industry with a number of major mining companies such as Sherritt International, Dynatec Corporation, Inco Ltd, Placer Dome, Aur Resources and Cominco. Mr. Boyle has experience with building and operating narrow vein and bulk underground mines as well as open pit mines with a strong focus on efficiency and cost control. He was also recognized by the mining industry with a second J.T. Ryan trophy for the Stobie Mine being the safest mine in Ontario. Mr. Boyle obtained a BSc. Mining Engineering and MBA from the University of Alberta in 1984 and 1985 respectively.

About Avion Resources Corp.

Avion Resources is a Canadian-based exploration and development company focused on strategic acquisitions in Africa. Avion has a team of highly qualified geologists, as well as a strong operational team that is exploring various properties in the previously mentioned region. Avion currently has an exploration project in Ethiopia with a total land position of greater than 5,700 square kilometers.

Cautionary Notes

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

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 to be acquired, the terms of acquisition, and the impact of the acquisition on Avion. 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.

To view a map of "Figure 1. Location of Mali Acquisition Projects.", please visit the following link: http://media3.marketwire.com/docs/325avion.jpg

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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