TORONTO, ONTARIO, Jan. 29, 2010 (Marketwire) -- Avion Gold Corporation (TSX VENTURE:AVR) ("Avion") and Avocet Mining PLC (AIM:AVM) ("Avocet") are pleased to announce that they have executed an agreement under which Avion has agreed to acquire a 100% interest in the Hounde Group concessions ("Hounde") in Burkina Faso.
This very large property lies within a new emerging gold camp, along more than 60 kilometres of what appears to be the same stratigraphy that hosts SEMAFO's Mana Mine to the northeast, which has Measured and Indicated resources of 1.93 million ounces Au and produced 153,500 ounces in 2009 (see attached Figure). ACC Resources Ltd.'s Dossi zone is adjacent to the east of the Hounde Group, and is estimated to contain approximately 1 million ounces of non-43-101 compliant Au resources (as per ACC's corporate web site).
The Hounde Group contains eight mineralized zones with the best results returned from the Vindaloo Zone. A summary of the main mineralized zones is as follows:
-- Vindaloo - All drill holes have intersected gold mineralization to a
depth of less than 100 metres along a 400 metre strike. Most significant
intersection is 8.91 g/t Au over 29.0 metres, and the average of ten
intersections is 4.71 g/t Au over 21.0 metres. Mineralization remains
open along strike and at depth. True width is estimated at 70% of core
-- Dohoun - Mineralized trend can be traced for approximately 12.5
kilometres with the best intercept of 4.86 g/t Au over 17.0 metres core
-- Grand Espoir - Mineralized trend traced for over 5 kilometres with the
best intersection of 2.65 g/t Au over 12.0 metres core length.
-- Kari Pompe - best intercept 31.92 g/t Au over 3 metres core length.
-- Kopoi - New, non-artisanal target area near main highway with a best
intercept 3.43 g/t Au over 4 metres core length.
-- Kueredougou - Mineralized zone can be traced for 5 kilometres with the
best intersection of 4.67 g/t Au over 15.0 metres core length.
-- Diosso South - Mineralized trend can be traced for approximately 3.5
kilometres with the best intersection of 19.5 g/t Au over 1.0 metres
-- Kyen Prospect - Artisanal mining traced zone for at least 500 metres,
with the best intercept of 17.3 g/t Au over 1.0 metre core length.
Commenting on the executed Heads of Agreement, Avion's President and CEO, Mr. John Begeman stated, "Avion has been very successful at adding ounces through exploration since it began operating in West Africa in 2008. Through the acquisition of the Hounde property, Avion believes that it has an excellent opportunity to build additional value through exploration in an area that is a emerging as a significant new gold camp in Burkina Faso."
In order to earn 100% of Hounde, Avion, will, upon signing a definitive agreement, issue Avocet 10.3 million shares of Avion. Completion of the proposed acquisition is subject to the completion of due diligence, approval of the TSX Venture Exchange, the royalty holder and Government approval in Burkina Faso of the license transfers.
Part of the Hounde Group (Kari Nord and Kari Sud licenses comprising 480 km2 or 29% of the property) is subject to a 2% NSR due to Barrick Gold ("Barrick") and certain back-in rights. Should Avion be successful in defining a greater than3 Moz gold deposit on the Kari Nord and Kari Sud licenses, Barrick has the option to claw-back 75% indirect interest in the Kari properties by paying Avion an amount equal to the value of this interest subject to an independent valuation report. Should Avion be successful in defining a less than3 Moz gold deposit, Barrick has the option to claw-back 25% equity in the Hounde by paying Avion an amount equal to the value of this interest determined from an independent valuation. If the claw-back option in either case is exercised, Barrick will relinquish the NSR over that license(s). If the claw-back option in either case is exercised, Avion and Barrick will form a Joint Venture company under the terms in the Agreement with the majority holder taking on the role of operator.
Upon signing of a definitive agreement, Avion plans to conduct an airborne magnetic, radiometric and resistivity survey over the entire property. As well, Avion plans to test the Vindaloo zone both to depth and along strike with the goal to produce a mineral resource estimate before year-end. This property has never been subjected to a regional type survey and considering the abundance and strike extent of the known zones, Avion believes that the chance for the discovery of additional zones is high.
The mining industry in Burkina Faso is growing at a fast rate due to a combination of a stable elected democratic government, good 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 enjoys 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.
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.
About Avion Gold Corporation
Avion is a Canadian-based gold company focused in West Africa. The Company holds 80% of the Tabakoto and Segala gold projects in Mali. Gold production at these projects has commenced, with approximately 100,000 ounces of production forecast for 2010 with an expected cash cost of US$450 per ounce of gold. Avion has a highly skilled management team, with a focus on growth and consolidation within West Africa.
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements regarding the impact of the results on the Company; statements with respect to the development potential and timetable of the Mali projects; the future price of gold; the estimation of mineral resources; conclusions of economic evaluation (including scoping studies); the realization of mineral resource estimates; the timing and amount of estimated future production, development and exploration; costs of future activities; capital and operating expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; the actual results of current exploration activities; ability to successfully integrate the purchased properties; foreign operations risks; other risks inherent in the mining industry and other risks described in the annual information form of the Company which is available under the profile of the Company on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
To view the figures associated with this release, please visit the following links:
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