Mr. John Begeman reports
AVION ESTABLISHES AN INITIAL 547,000 OUNCE INFERRED MINERAL RESOURCE IN BURKINAFASO
Avion Gold Corp. has provided an initial resource estimatefor the Vindaloo zone on the Hounde property in Burkina Faso. Avionrecently finalized its acquisition of the property from Avocet MiningPLC (see Avion news releases dated January 29, 2010, July 5, 2010, and,October 7, 2010). Highlights of the Vindaloo initial resource estimateat a 1.0 g/t Au cut-off grade defined within an optimized pit shell areas follows:
-- 883,000 tonnes Indicated Mineral Resources at 2.23 g/t Au totaling63,000 Ounces(i)
-- 5,725,000 tonnes Inferred Mineral Resources at 2.97 g/t Au totaling547,000 Ounces(i)
(i)1. Mineral resources which are not mineral reserves do not havedemonstrated economic viability. The estimate of mineral resources maybe materially affected by environmental, permitting, legal, title,taxation, sociopolitical, marketing, or other relevant issues and aresubject to the findings of a definitive feasibility study.
2. The quantity and grade of reported inferred resources in thisestimation are uncertain in nature and there has been insufficientexploration to define these inferred resources as an indicated ormeasured mineral resource and it is uncertain if further explorationwill result in upgrading them to an indicated or measured mineralresource category.
3. The Vindaloo Zone Resource Estimates were prepared by Eugene Puritch,P. Eng. and Antoine Yassa, P. Geo. from P&E Mining Consultants Inc.,Qualified Persons under NI 43-101 who are independent of the Company
4. The mineral resources in this press release were estimated using theCanadian Institute of Mining, Metallurgy and Petroleum (CIM), CIMStandards on Mineral Resources and Reserves, Definitions andGuidelines prepared by the CIM Standing Committee on ReserveDefinitions and adopted by CIM Council December 11, 2005.
5. The gold price used in this estimate was the June 30, 2010 two yeartrailing average of US$1,027/oz. Au recovery was 92% and mining costswere US$2.75/tonne of ore and US$1.50/tonne of waste. Processing andG&A costs combined were US$30/tonne. Pit optimization slopes were 50degrees.
Gold mineralization in this very large, 1,670 km2property, displays similar characteristics with SEMAFO's Mana Mine(which hosts estimated mineral reserves and resources totaling 2.35million ounces of gold and Inferred mineral resources totaling 0.91million ounces of gold), which is located in the same geological belt,60 kilometres to the northeast. The property is centered approximately250 km southwest of Ouagadougou, the capital of Burkina Faso (see Figure1).
Avion has intersected gold mineralization along a 500 metrestrike length to at depth of approximately 200 metres from surface withdrill hole step-outs of 75 to 100 metres horizontally and vertically.This zone is open along strike and to depth and has been defined byapproximately 23 drill holes. The mineralization trend, associated withthe Vindaloo zones, can be traced through drilling, soil survey data andmagnetic surveys for over 2,500 metres along strike.
The Vindaloozone is hosted near the contact between an intensely sericite- andsilica-altered mafic intrusion and similarly-altered, intensely shearedand altered intermediate to mafic volcanoclastics. The mineralization isoften quartz stockwork-style, intrusion-hosted and weakly to moderatelypyritic. The entire mineralized package strikes north-northeast anddips steeply to the west. Higher gold grade zones have been intersectedwhere the intrusion narrows.
John Begeman, Avion's President andCEO, stated: "The initial resource for the Vindaloo zone is veryencouraging especially as the zone is open in all directions and thatthe overall grade is similar to that at Semafo's Mana mine. Avion'smanagement is excited by what we believe are an abundance of qualitydrill targets, some of which will be tested in October and November."
Additionaldrill testing is planned in the fourth quarter of 2010. However, due towork commitments on the Company's other Hounde Property concessions,further drill testing at the Vindaloo zone will be limited, at thistime, to 4 to 6 holes to test for strike extensions of the zone.
Technical Data
Inorder to determine the resources for Vindaloo, Avion initiallyinterpreted the mineralized zone wireframes with an approximate 0.5 g/tAu cut-off grade. This zone definition was subsequently provided toP&E Mining Consultants Inc. ("P&E") who carried out a sitevisit, collected verification samples, finalized the mineralizationwireframes and prepared the deposit mineral resource estimate. Themineral resource is constrained by two zones varying in true width fromapproximately 3.5 to 40 metres. Grade capping of gold assays was at 10to 35 g/t Au, depending whether in a fresh or saprolite mineralizedlens. Au grade model blocks were interpolated with the inverse distancecubed (1/d3) method. Assumptions of a gold price of US$1,027 per oz (Sep30, 2010 24 month trailing average), 92% process recovery, ore miningcosts of US$2.75/tonne, waste mining costs of US$1.50 /tonne, processcosts of US$22/tonne and G&A costs of US$8.00 tonne were used todetermine the 1.0 g/t Au open pit cut-off grade.
The Vindalooresource calculation was prepared by Eugene Puritch, P. Eng. and AntoineYassa, P. Geo. of P&E Mining Consultants Inc., both "QualifiedPersons" as defined by NI 43-101who are independent of the Company. Mr.Puritch, President of P&E and Don Dudek, P.Geo., Senior VicePresident, Exploration of the Company and a qualified person underNational Instrument 43-101, have reviewed and approved the scientificand technical information in this press release.
Avion'sprocedures for handling core have been presented in previous newsreleases (See for example Avion News Release dated May 13, 2010).
Mining in Burkina Faso
Themining industry in Burkina Faso is growing at a rapid rate due to acombination of a stable elected democratic government, excellent geologyand a competitive fiscal regime. Currently six gold mines are inproduction or development in Burkina Faso (Essakane - IAMGOLDCorporation, Mana - SEMAFO, Inata - Avocet Mining PLC, Youga - EtruscanResources Inc., Taparko - High River Gold Mines Ltd., Kalsaka - CluffGold PLC). In 2011, it is expected that Burkina Faso will become thefourth largest gold producing country in Africa. The country haslegislated low taxes, with an income tax rate of 20% and a corporateprofits tax of 20% for mining companies. There is a three-year taxholiday during construction that includes relief from VAT and customduties during construction and reduced customs duties of 7.5% duringmining operations. The government is entitled to a 10% free carriedinterest and a reasonable 3% Royalty on gold production.
We seek Safe Harbor.