Avion agreement for Kenieba concessions

2010-01-11 16:19 ET - Property Agreement

The TSX Venture Exchange has accepted for filing documentation pertaining to an asset purchase agreement dated Dec. 18, 2009, between Avion Gold Corp. and Great Quest Metals Ltd., a TSX Venture Exchange-listed company. Pursuant to the agreement, the company shall acquire 100 per cent of the vendor's interest in the Kenieba concessions. The vendor's interest in the concessions varies from 95 per cent to 100 per cent and is subject to a carried interest to the Mali government ranging between 10 per cent and 20 per cent.

As consideration, the company must pay the vendor $500,000 and issue 7,608,696 shares. The company has also agreed to make future contingent payments of up to $2.1-million in the event that it produces more than 400,000 ounces of gold from the Kenieba concessions, payable in increments of 50,000 ounces production. If production from the concessions exceeds 600,000 ounces, the company would be required to make up to a further $1.4-million in payments to complete its obligations. The company has also made a $350,000 payment pursuant to an option agreement entered into previously by both parties for the concessions. The agreement will supersede and replace the option agreement.

For further information, please refer to the company's press releases dated Nov. 2, 2009, Dec. 21, 2009, and Jan. 8, 2010.