NEWSAvion Announces Initial Mineral Reserve of 913,100 Ounces of Gold That Supports a 5 Year Mine Life at Tabakoto Project, Mali
7/5/2011 7:00:34 AM - Market Wire
TORONTO, ONTARIO, Jul 05, 2011 (MARKETWIRE via COMTEX News Network) --
("Avion" or "the Company") (TSX:AVR)(OTCQX:AVGCF), is pleased to announce its initial mineral reserve estimation for seven deposit groups and several ore stockpiles which comprise the Tabakoto Project in Mali, West Africa. Highlights of Avion's mineral reserves and mineral resources are as follows:
-- Tabakoto Project open pit and stockpiled Proven and Probable mineral
reserves comprise 2,611,000 tonnes grading 2.90 g/t Au for 243,600
ounces of gold.
-- Tabakoto Project underground Proven and Probable mineral reserves
comprise 4,630,000 tonnes grading 4.50 g/t Au for 669,500 ounces of
gold.
-- Additional Measured and Indicated mineral resources comprise 1,359,000
tonnes at 3.41 g/t Au containing 149,100 ounces of gold.
-- Additional Inferred mineral resources comprise 7,892,000 tonnes at 4.22
g/t Au containing 1,070,500 ounces of gold.
The mineral reserve estimate (see tables below) for the Tabakoto Project demonstrates several sources of open pit and underground mineral reserves that provide significant flexibility for Avion's mining plans. The Company is currently transitioning from an open pit mining operation to primarily an underground mining operation with open pit mining to serve as contingency mill feed. The mineral reserve estimate is as of January 1, 2011.
Mineral Reserve Estimates(1)(2)(3)(4)
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ZONE CATEGORY TONNES GRADE g/t Au OUNCES GOLD TYPE
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Tabakoto NE Proven 22,000 4.19 3,000 UG
Probable 940,000 4.41 133,100 UG
Subtotal 962,000 4.40 136,100 UG
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Tabakoto NW Proven 10,000 6.64 2,100 UG
Probable 535,000 4.55 78,300 UG
Subtotal 545,000 4.59 80,400 UG
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Tabakoto South/Dabo Proven 0 0.00 0 UG
Probable 232,000 5.84 43,600 UG
Proven 65,000 4.31 9,000 OP
Probable 64,000 3.52 7,300 OP
Subtotal 361,000 5.16 59,900 UG & OP
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Segala Main Proven 18,000 4.33 2,400 UG
Probable 2,873,000 4.41 407,000 UG
Subtotal 2,891,000 4.40 409,400 UG
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Segala NW Proven 33,000 2.53 2,700 OP
Probable 84,000 2.82 7,600 OP
Subtotal 117,000 2.74 10,300 OP
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Djambaye II Proven 0 0.00 0 OP
Probable 707,000 3.65 83,100 OP
Subtotal 707,000 3.66 83,100 OP
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Dioulafoundou Proven 283,000 4.75 43,200 OP
Probable 168,000 5.78 31,200 OP
Subtotal 451,000 5.13 74,400 OP
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STOCKPILES
Segala Main ROMPAD Proven 158,000 3.59 18,300 SP
Segala Main Low Grade Proven 762,000 1.12 27,400 SP
Tabakoto Low Grade Proven 287,000 1.50 13,800 SP
Subtotal 1,207,000 1.53 59,500 SP
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GRAND TOTAL 7,241,000 3.92 913,100
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Summary Of Mineral Reserve Estimates By Mine Type(1)(2)(3)
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TYPE CATEGORY TONNES GRADE g/t Au OUNCES GOLD
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Underground Proven 50,000 4.67 7,500
Probable 4,580,000 4.50 662,000
Subtotal 4,630,000 4.50 669,500
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Open Pit Proven 381,000 4.48 54,900
Probable 1,023,000 3.93 129,200
Subtotal 1,404,000 4.08 184,100
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Stockpile Proven 1,207,000 1.53 59,500
Probable 0 0.00 0
Subtotal 1,207,000 1.53 59,500
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GRAND TOTAL Proven 1,638,000 2.31 121,900
Probable 5,603,000 4.39 791,200
Total 7,241,000 3.92 913,100
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1. The mineral reserves have been classified in accordance with
requirements of NI 43-101 and the CIM standards. Reserve estimates are
based on a gold price of USD$1,183 per ounce and a 94% process plant
recovery.
2. Andrew Bradfield, P.Eng. and Don Dudek, P.Geo. Sr. Officers of Avion and
Qualified Persons, as such term is defined under NI 43-101, are
responsible for the mineral reserve estimates and have reviewed and
approved the scientific and technical information in this document
relating to those estimates.
3. The mineral reserves in this press release were estimated using the
Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM
Standards on Mineral Resources and Reserves, Definitions and Guidelines
prepared by the CIM Standing Committee on Reserve Definitions and
adopted by CIM Council.
4. "UG" indicates Underground, "OP" Open Pit and "SP" Stockpile.
A National Instrument 43-101 ("NI 43-101") compliant technical report to support the above mineral reserve estimate is in progress and is expected to be completed and publicly disclosed within the next 45 days from the date of this press release.
Avion is currently planning to increase its gold production to a rate of 200,000 ounces per year. The mineral reserve of 913,200 ounces of gold represents over five years of mine life based on Avion's current projected production. In 2011, Avion has forecasted production of 100,000 ounces of gold, increasing to approximately 160,000 ounces in 2012 with production thereafter planned at approximately 200,000 ounces of gold per annum.
John Begeman, President and CEO, commented: "The issue of the Company's initial mineral reserve statement marks a significant milestone for Avion. The Company has over two years of operating experience at the Tabakoto Project, and has demonstrated that the mine is profitable. Avion's understanding of the mineralized zones has developed considerably since starting the project, and management firmly believes that there is opportunity to increase the mine's mineral reserves in the future. The conversion from mineral resources to mineral reserves for ore zones at depths up to 300 metres below surface supports Avion's decision to proceed with the underground development of the Tabakoto and Segala mineralized zones to depth."
Over the past two years, Avion focused on delineating higher grade cross-structures in the Tabakoto pit area, defining additional open pit and underground mineral resources at Dioulafoundou, and better defining the near surface resources at the northern end of the Djambaye II zone. Avion's mineral reserves are concentrated above 300 metres vertical depth from surface, with all zones open down plunge and to some extent along strike. Management believes that the likelihood of adding additional mineral reserves in the future is high.
Avion's mineral reserves comprise a mix of open pit and underground reserves. In management's opinion, this combination of source material provides tremendous flexibility as the Company transitions from primarily an open pit mining operation to primarily an underground mining operation.
In combination with the mineral reserves, additional Measured and Indicated mineral resources of 1,359,000 tonnes at 3.41 g/t Au containing 149,100 ounces of gold and Inferred mineral resources of 7,892,000 tonnes at 4.22 g/t Au containing 1,070,500 ounces of gold have been defined in several deposits. These mineral resources have not yet been supported by open pit or underground mine plans, and require additional work to convert to mineral reserves and to upgrade the Inferred mineral resources to Measured and Indicated mineral resources. Avion management believes that there is a reasonable likelihood of upgrading a significant portion of these mineral resources to mineral reserves with further drilling and exploration work.
Technical Data
Tabakoto Deposit
The Tabakoto Deposit consists of 18 modeled northwest trending (NW Tabakoto zones) mineralized structures and 14 modeled northeast-trending zones (NE Tabakoto zones, Tabakoto South Zone and Dabo zone). Of these zones, seven of the best developed mineralized structures (NE1, NE2, NE hanging wall, NW1, NW2, Tabakoto South and Dabo) were drill tested to approximately 300 metres depth. All zones are open to depth. Additional, un-modeled, mineralized structures have been noted below the Tabakoto pit and north and south of the Tabakoto pit. Avion is currently advancing two mine portals under the Tabakoto pit with the northern portal targeting the northwest-trending zones and the southern portal targeting the northeast-trending zones.
Dioulafoundou Deposit
The Dioulafoundou mineralized system consists of two stronger gold mineralized zones and several, smaller, parallel gold mineralized zones. The strongest of the zones, the Dioulafoundou NW1 zone, has been traced for approximately 400 metres along strike and to approximately 325 metres depth. A second, parallel, zone of gold mineralization, the Dioulafoundou NW2 zone, lies approximately 60 metres to the south and has been traced for approximately 190 metres along strike and to approximately 300 metres depth. Both zones are steeply dipping, steep east plunging and open down plunge and to a lesser extent, to the east. Since the bulk of the mineral resources below the open pit are in the Inferred category, drilling is planned to upgrade these resources to Measured and Indicated status to determine if sufficient underground mineral resources are present to support a third underground mine.
Segala Deposit
The Segala Deposit consists of the Segala Main and Segala NW zone, both of which have been subject to open pit mining in 2009 and 2010. The Segala Main deposit has provided the bulk of the mill feed over Avion's first two production years. This zone has been traced for 350 to 400 metres along strike and remains open at depth on the Segala Main Zone with intersections as deep as 600 metres below surface. 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. The Segala NW zone has been traced for approximately 550 metres along strike and is open below approximately 220 metres depth. Drilling to further develop the depth potential will be carried out prior to defining mineral reserves.
Djambaye II Deposit
The Djambaye II mineralized structure/zone dips at -70 degrees to the east and has now been traced by drilling for approximately 4,400 metres and is still open to the north, south and below 200 metres depth. Locally the Djambaye II zone comprises two parallel zones and there is local evidence of gold-bearing cross structures. The Djambaye II zone is the longest continually mineralized structure on the Tabakoto Project and provides an excellent opportunity to define additional open pit and underground mineral resources. Current open pit mineral reserves are for a 900 metre long section at the north end of the Djambaye II zone. A review of the sectional data indicates that the currently designed pit depth and extent is limited by a lack of drilling data verses an end to the mineralization. Additional drilling is a priority. As well, based on results to date, management believes that there is a reasonable potential to define sufficient underground mineral resources at Djambaye II to consider underground mining in the future.
Mineral Resources
At the Tabakoto Project, open pit mineral resources have been defined in six deposits: Dioulafoundou, Tabakoto South/Dabo, Djambaye II, Dar Salam and just north of the Tabakoto pit.
The majority of the underground mineral resources are currently defined below and near to the Segala Main and Tabakoto pits. Avion will continue to work toward converting Inferred mineral resources to Measured and Indicated mineral resources with in-fill drill holes and will further test the Segala Main and Tabakoto zones to depth. Additional underground mineral resources have been defined at Dioulafoundou, Djambaye II, Segala NW and Dar Salam; more drilling is required in these four zones to define sufficient underground mineral resources to support underground mining.
In order to document the Tabakoto Project resources, Avion, with the assistance of Antoine Yassa, P.Geo. of P&E Mining Consultants Inc. (P&E), first interpreted the zones with a 0.5 g/t Au to 1 g/t Au grade shell to define open pit resources and then defined a 2.0 g/t Au grade shell to define underground resources. This zone definition was then provided to P&E who has carried out a site visit, collected verification samples, finalized the mineralization wire frames and updated the deposit mineral resources. The updated mineral resource capped gold assays at 15 to 50 g/t Au, depending on the individual zone. A 2.0 g/t Au cut-off grade was used to determine underground mineral resources, and for potentially open pittable resources, a 1.0 g/t Au cut-off grade was used.
A current mineral resource table is presented below. The table summarizes mineral resource estimates presented in press releases issued by Avion on December 30, 2010 and May 3, 2011. The mineral resource estimates are current as of January 1, 2011, with the exception of Tabakoto NW and Djambaye II which were updated on May 3, 2011.
Mineral Resource Estimates(1)(2)(3)(4)(5)(6)
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ZONE CATEGORY TONNES GRADE g/t Au OUNCES GOLD TYPE
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Tabakoto NE Measured 26,900 5.28 4,600 UG
Zones Indicated 1,047,000 5.57 187,600 UG
Inferred 496,000 5.19 82,900 UG
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Tabakoto NW Measured 5,000 7.75 1,200 OP
Zones Indicated 102,000 4.48 14,800 OP
Inferred 86,000 3.31 9,100 OP
Measured 17,000 5.92 3,200 UG
Indicated 627,000 5.81 117,100 UG
Inferred 660,000 5.67 120,200 UG
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Tabakoto South Indicated 120,000 4.22 16,300 OP
/Dabo Zones Inferred 194,000 4.83 30,100 OP
Indicated 271,000 7.70 67,100 UG
inferred 697,000 5.28 118,400 UG
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Djambaye II Indicated 751,000 3.78 91,300 OP
Inferred 1,595,000 3.30 169,200 OP
Indicated 3,000 2.52 200 UG
Inferred 950,000 3.43 104,700 UG
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Segala Main Measured 3,000 4.41 400 UG
Indicated 2,548,000 5.29 433,000 UG
Inferred 1,442,000 4.35 201,500 UG
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Segala NW Measured 4,000 4.43 600 UG
Indicated 885,000 3.61 98,200 UG
Inferred 257,000 3.40 28,100 UG
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Dioulafoundou Indicated 598,000 4.99 95,900 OP
Inferred 257,000 6.35 52,500 OP
Indicated 49,000 4.64 7,300 UG
Inferred 395,000 5.41 68,700 UG
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Dar Salam Indicated 266,000 2.57 22,000 OP
Inferred 445,000 2.53 36,200 OP
Indicated 45,000 3.37 4,800 UG
Inferred 418,000 3.64 48,900 UG
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1. Mineral resource estimates based on a gold price of USD$1,000 per ounce
and a 96% process plant recovery.
2. Eugene Puritch, P.Eng. and Antoine Yassa, P.Geo. from P&E Mining
Consultants Inc., Qualified Persons under NI 43-101 who are independent
of the Company, are responsible for the mineral resource estimates
presented herein.
3. Mineral resources which are not mineral reserves do not have
demonstrated economic viability. The estimate of mineral resources may
be materially affected by environmental, permitting, legal, title,
taxation, sociopolitical, marketing, or other relevant issues.
4. The quantity and grade of reported Inferred resources in this estimation
are uncertain in nature and there has been insufficient exploration to
define these Inferred resources as an Indicated or Measured mineral
resource and it is uncertain if further exploration will result in
upgrading them to an Indicated or Measured mineral resource category.
5. The mineral resources in this press release were estimated using the
Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM
Standards on Mineral Resources and Reserves, Definitions and Guidelines
prepared by the CIM Standing Committee on Reserve Definitions and
adopted by CIM Council.
6. "UG" indicates Underground and "OP" Open Pit.
During 2011 Avion is carrying out a US$ 4 million dollar, approximate 30,000 metre, exploration drill program over the Tabakoto Project area. To date, approximately 14,200 metres of drilling in 132 holes has been completed. The remaining program will focus on continuing to define the mineralized cross-structures north and south of the Tabakoto Pit, defining the underground potential of the Dioulafoundou zone, tracing the Djambaye II zone along strike and to depth, in-fill drilling along the Djambaye II zone, testing for additional cross-structures near Dioulafoundou, trenching over the Dar Salam zone and to test structural and Au-in-soil targets on the remainder of the property.
Andrew Bradfield, P.Eng., the Chief Operating Officer, and Don Dudek, P.Geo., the Senior Vice President, Exploration, of the Company and qualified persons under National Instrument 43-101 have reviewed and approved the scientific and technical information in this press release.