Avion Gold starts diamond drilling at Hounde

Avion Gold Corp (C:AVR)
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Last Close 5/17/2010 $0.62
Tuesday May 18 2010 - News Release

Mr. Don Dudek reports

AVION COMPLETES 5,000+ METRE DRILL PROGRAM AT HOUNDE, BURKINA FASO

Avion Gold Corp. has started a diamond drilling program on the Hounde property in Burkina Faso, that Avion has agreed to acquire from Avocet Mining PLC (see Avion news in Stockwatch Jan. 29, 2010).

This very large, 1,670 km2 property, lies within an emerging gold camp and is 60 kilometres southwest of SEMAFO's Mana Mine. The Mana Project has Mineral Reserves and Resources totaling 2.35 million ounces Au and Inferred Resources totaling 0.91 million ounces (see attached Figure).

Avion has just commenced a minimum 5,000 metre diamond drill program. This program is designed to both better define existing zones, and to discover new zones. Approximately 40% of the drill program is scheduled to further test the Vindaloo Zone which returned drill intercepts of up to 8.91 g/t Au over 29 metres core length. All drill holes have intersected gold mineralization to a depth of less than 100 metres along a 675 metre strike and the average of ten intersections at 4.71 g/t Au over 21.0 metres. Mineralization remains open along strike and at depth, with soil sampling suggesting that mineralization extends for at least 700 metres to the southwest.

In the latter part of April and the beginning of May, Avion completed an airborne magnetic and radiometric survey over the 1,670 km2 Hounde property. The airborne magnetic data has indicated numerous structures, some of which, from a preliminary data review, are related to the known mineralized zones. The presence of additional, similar structures, not associated with known gold zones, suggest potential for the discovery of new gold zones. Soil surveys and mapping are being carried out to generate new drill targets.

Field work on the property commenced approximately one month ago. Exploration has focused on the documentation of extensive artisanal works, the collection of over 2,700 soil samples and compilation of available data. This compilation work has led to the recognition of several other gold zones (see figure) the best of which returned 3.47 g/t Au over 18.0 metres core length (Kari South zone). This hole ended in mineralization. The area proximal to this hole displays quartz veining, alteration and artisanal pitting along a 1,000 metre strike length.

John Begeman, Avion's President and CEO, stated, "The Hounde Property zones display an excellent target for resource growth. This recent data confirms our belief that the Hounde property is highly prospective, and I look forward to more results and a resource being quantified by year end."

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

The mining industry in Burkina Faso is growing at a rapid rate due to a combination of a stable elected democratic government, excellent geology and a competitive fiscal regime. Currently six gold mines are in production or development in Burkina Faso (Essakane - IAMGOLD Corporation, Mana - SEMAFO, Inata - Avocet Mining PLC, Youga - Etruscan Resources Inc., Taparko - High River Gold Mines Ltd., Kalsaka - Cluff Gold PLC). In 2011, it is expected that Burkina Faso will become the fourth largest gold producing country in Africa. The country has legislated low taxes, with an income tax rate of 20% and a corporate profits tax of 20% for mining companies. There is a three-year tax holiday during construction that includes relief from VAT and custom duties during construction and reduced customs duties of 7.5% during mining operations. The government is entitled to a 10% free carried interest and a reasonable 3% Royalty on gold production.