Avion's Segala at 490,000 oz of 5.29 g/t Au M+I

2010-01-06 08:32 ET - News Release

Mr. John Begeman reports

AVION SIGNIFICANTLY INCREASES RESOURCES; MEASURED AND INDICATED RESOURCES DOUBLE AT SEGALA MAIN ZONE WITH 38% GRADE INCREASE; COMPANY EXPANDS 2010 EXPLORATION BUDGET TO US$10MILLION

Avion Gold Corp. has released its updated resource estimation. Highlights are as follows:

• The measured and indicated underground mineral resource at the Segala Main Zone increased more than 100 per cent to 490,000 ounces Au.
• The grade at the Segala Main zone increased by 38 per cent to 5.29 grams per tonne Au.
• The company's total measured and indicated mineral resources increased 18 per cent to 1.43 million ounces at a grade of 3.71 g/t Au.

Mineralization remains open at depth on the Segala Main zone with intersections as deep as 600 metres below surface. As a result of the additional 25 diamond drill holes completed into the previous inferred mineral resources during 2009, and a more rigorous geological model, the grade has increased and the anticipated economics are expected to be more robust. Avion also believes there is a reasonable expectation that additional mineral resources can be defined between 300 metres to 600 metres below surface and below the 600-metre level. A diagram demonstrates where measured and indicated mineral resources lie as compared with the inferred mineral resources and the postulated down-plunge extension of the Segala Main zone. Drilling to develop this depth potential will likely be carried out once underground mining has commenced.

John Begeman, president and chief executive officer, commented: "The increase in the measured and indicated mineral resources and resource grades at Segala support Avion's underground development plans at Segala and further emphasize the robust character of the overall project. Moreover, the new resources support Avion's goal to increase the production capacity from 100,000 ounces per year to 200,000 ounce per year. We believe that the project and area have excellent potential to deliver more resource ounces in the future."

The company's measured and indicated mineral resources now comprise 11.38 million tonnes grading 3.71 g/t Au or about 1.43 million ounces Au, an increase of 18 per cent from the previously announced total. Total inferred mineral resources comprise 9.88 million tonnes grading 3.78 g/t Au totalling 1.2 million ounces, which is a 5-per-cent increase from the previously announced total. Note that the inferred mineral resource total includes 95 per cent of the inferred resources at Great Quest's Djambaye 2 zone, which is subject to the recently announced (see the company's news release in Stockwatch dated Dec. 18, 2009) purchase agreement that is expected to be completed in early January. Details of the resources are presented at the end of the release.

Avion continues to refine the mineralization models for the Tabakoto deposit. An updated resource for the overall project is expected before the end of the third quarter in 2010.

Technical data

In order to document the new underground resources for Segala, Avion first interpreted the zones with a 0.5-gram-per-tonne-gold grade shell and then defined a two-gram-per-tonne-gold grade shell to document higher-grade areas. This zone definition was then provided to P&E Mining Consultants Inc. who subsequently carried out a site visit, collected verification samples, finalized the mineralization wire frames and updated the deposit mineral resources. The updated mineral resource defined six higher-grade zones varying in true width from approximately two to 15.0 metres and capped gold assays at 20 to 30 g/t Au, depending on the individual zone. A gold price of $900 (U.S.) per ounce, a 90-per-cent process recovery, mining costs of $24 (U.S.) per tonne, process costs of $20 (U.S.) per tonne, and general and administrative costs of $8 (U.S.) per tonne were used to determine the two-gram-per-tonne underground cut-off grade. For potentially open-pittable resources a one-gram-per-tonne cut-off grade was used.

The updated Segala Main resource calculations were prepared by Eugene Puritch, PEng, and Antoine Yassa, PGeo, from P&E Mining Consultants, qualified persons under National Instrument 43-101, who are independent of the company and have reviewed the scientific and technical information in this document relating to those estimates. Don Dudek, PGeo, vice-president, exploration, of Avion, has reviewed and approved the updated resources, and reviewed and approved the technical data presented in this press release. Avion has not completed a feasibility study in regard to the resource presented herein and there is no certainty the proposed operations will be economically viable.

                        MINERAL RESOURCES

Zone                           Tonnes       Au g/t       Ounces

Measured and indicated 
mineral resources
(1)(2)(3)(4)(5)(7)
Potentially open-pittable 
Segala
Main measured                  50,655         4.52       11,199
Main indicated                200,801         5.64       35,610
NW measured                   536,666         2.11       36,461
NW indicated                  251,570         3.34       26,997
Potentially open-pittable 
Tabakoto
Measured                    1,253,370         2.89      116,383
Indicated                   2,882,992         3.48      322,946
                            ---------         ----      -------                            
Subtotal                    5,176,054         3.30      549,596
                            ---------         ----      -------
Potentially underground 
minable Segala
Main measured                   4,504         4.70          681
Main indicated              2,875,302         5.30      489,490
NW measured                         0         0.00
NW indicated                  638,384         3.22       66,166
Potentially underground 
minable Tabakoto
Measured                       39,746         3.39        4,331
Indicated                   2,645,377         3.73      317,476
                            ---------         ----      -------
Subtotal                    6,203,313         4.40      878,144
                            ---------         ----      -------
Inferred mineral resources
(1)(2)(3)(4)(5)(6)(7)
Potentially open-pittable
Segala NW                       2,196         3.28          231
Dioulafoundou                 349,296         3.49       42,177
Dar Salam                   1,195,228         3.47      134,155
Tabakoto                      982,628         3.92      109,568
Djambaye 2                  2,445,300         3.49      307,800
                            ---------         ----      -------
Subtotal                    4,974,648         3.71      593,931
                            ---------         ----      -------
Potentially underground 
minable
Segala NW                     214,785         2.74       18,930
Segala Main                 1,305,126         4.45      186,523  
Dioulafoundou                 102,010         4.41       14,461
Dar Salam                     601,965         3.35       64,785
Tabakoto                    2,682,100         3.73      321,300
                            ---------         ----      -------  
Subtotal                    4,905,586         3.84      605,999
                            ---------         ----      -------

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 National Instrument 43-101 and the CIM 
standards. Resource estimates based on a gold price ranging 
from $825 (U.S.) to $900 (U.S.) per ounce.
3. Mr. Puritch, qualified person under National Instrument 
43-101, prepared the current mineral resource estimates and has 
reviewed the technical disclosure herein relating to the 
resource estimates.
4. Milko Rivera, PEng, and Farshid Gazanfari, independent 
consultants, qualified persons under National Instrument 
43-101, prepared the mineral resource estimates as reported in
Stockwatch news on May 19, 2009, and have reviewed the 
technical disclosure herein relating to the resource estimates. 
Mr. Puritch carried out an independent review of the resource 
model and provided preliminary open-pit and UG mining 
scenarios.
5. Mr. Puritch and Mr. Yassa, qualified persons under National 
Instrument 43-101, who are independent of the company, are 
responsible for the mineral resource estimates presented in 
Stockwatch news on Dec. 12, 2008, and have reviewed the 
scientific and technical information in this document relating 
to those estimates.
6. Carl Verley, PGeo, independent consultant, qualified person 
under National Instrument 43-101, prepared the Jan. 28, 2008,
Djambaye 2 mineral resource study for Great Quest Metals.
7. Mineral resources that are not mineral reserves do not have 
demonstrated economic viability.