Avion Gold Corporation
TSX VENTURE : AVR
OTCQX : AVGCF

Avion Gold Corporation

October 07, 2010 16:35 ET

Underground Development Commences at Avion's Tabakoto Gold Deposit, Mali

TORONTO, ONTARIO--(Marketwire - Oct. 7, 2010) - Avion Gold Corporation (TSX VENTURE:AVR) (OTCQX:AVGCF) ("Avion" or the "Company") is pleased to announce that underground mine development has commenced at its Tabakoto gold deposit in Mali, West Africa.

Development of the first of two planned portals, at the base of the Tabakoto pit, commenced on October 6, 2010. Avion's underground mining contractor, Byrnecut Mali SARL, and all necessary supplies for continuous development are on site.

Commenting on the start of underground mine development at Tabakoto, Mr. John Begeman, Avion's President and CEO, stated: "This achievement is an important milestone towards accessing higher grade ore and increasing gold production. Avion has been constructing infrastructure and preparing for underground development all year and it is very satisfying to see its plans come to fruition."

Avion has also signed capital lease agreements with Volvo Construction Equipment AB of Sweden and Amalgamated Mining Inc. of Canada for the supply of 12 underground haul trucks and a wheel loader, and two underground Caterpillar loaders, respectively. The purchase of this equipment will reduce future operating costs by decreasing the reliance on contractor-supplied mining equipment.

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 of gold. 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, the 1,670 km2 Houndé exploration property in Burkina Faso is returning good results from an ongoing exploration 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 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 underground mine development and capital lease agreements 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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