Dec 1 2010
Avion Gold Corporation (TSX VENTURE:AVR)(OTCQX:AVGCF) has announced the results of six additional holes that have tested the Vindaloo Zone and nearby target areas at the Houndé Project in Burkina Faso
The Vindaloo Zone hosts an initial Indicated mineral resource of 883,000 tonnes grading 2.33 g/t Au totaling 63,000 ounces gold and an Inferred mineral resource of 5,725,000 tonnes grading 2.97 g/t Au totaling 547,000 ounces gold.
Highlights of the new results are as follows:
- 2.56 g/t Au over 29.0 metres in hole H-10-25 at Vindaloo Zone
- 3.14 g/t Au over 39.8 metres in hole H-10-26 at Vindaloo Zone
- 1.45 g/t Au over 36.0 metres in hole H-10-27 at Vindaloo Zone
- 2.97 g/t Au over 18.0 metres in hole H-10-27 at Vindaloo Zone
- 1.47 g/t Au over 56.9 metres in hole H-10-28 at Vindaloo Zone
- 2.53 g/t Au over 18.3 metres in hole H-10-24 at Madras Zone
The Vindaloo Zone has been traced for 700 metres along strike, to approximately 200 metres depth and is open to the north, south and to depth. This zone correlates exceptionally well with a 3,400 metre long geophysical anomaly (induced polarization resistivity) that has only been tested for 700 metres of its strike length. Parallel, untested geophysical anomalies of similar character occur both east and west of this target trend on the Houndé Project.
Avion completed two holes 100 metres to the north and two drill holes 100 metres to the south of the Avion's initial Vindaloo Zone drilling (see news release August 3, 2010). All four new holes intersected significant amounts of quartz-pyrite, stockwork-type, gold mineralization that is hosted by an intensely altered gabbroic intrusion. The holes tested the target stratigraphy at approximately 75 metre and 150 metre vertical depths.
John Begeman, Avion's President and CEO, stated: "These drill results continue to highlight the good grades and widths from the Vindaloo Zone on the Houndé Property, demonstrating the continued upside associated with this project. The step-out drilling 100 metres from each end of the known mineralization confirmed that the zone extends, and future drilling will test for further extensions. As a team we are optimistic that the current mineral resource will grow quite quickly with continued exploration drilling."
Avion also tested a known gold occurrence (Madras Zone) and geophysical resistivity anomaly located approximately 3.5 kilometres north of the Vindaloo zone. Avion's core hole returned an intercept of 2.53 g/t Au over 18.3 metres core length. The mineralization in this hole is hosted by a similar rock unit that hosts the Vindaloo zone. A previous intercept in this area returned 4.42 g/t Au over 12.0 metres core length. More work is required in this area not only to trace the Madras zone and associated resistivity anomaly, which is open along strike, but, to follow-up on a nearby intercept of 1.49 g/t Au over 12.0 metres on a parallel resistivity high.
As well, Avion completed a core hole approximately 2 kilometres south of the Vindaloo zone, along what may be the same mineralized trend as the Vindaloo zone. This hole intersected a 75 metre wide zone of sulphidized and altered gabbroic intrusion. This intercept lacked a significant amount of quartz veining and only returned a best value of 3.87 g/t Au over 0.4 metres. However, most of the samples of this intrusion contain low but anomalous amounts of gold. The drill hole did not penetrate the entire width of this altered intrusion. Higher gold grades often occur near the intrusive contacts.
An additional parallel zone of mineralization (Koho Zone, previously referred to as Vindaloo East Zone) is evident to the east of the Vindaloo zone. Historic drill intercept highlights include 1.34 g/t Au over 7.0 metres, 8.7 g/t Au over 1.0 metre, 1.21 g/t Au over 6.0 metres, 1.82 g/t Au over 4.0 metres, 27.2 g/t Au over 2.0 metres and 2.19 g/t Au over 5.0 metres. This distinct mineralized feature is also associated with a strong resistivity high. Through a combination of geophysical data, soil data and artisanal workings, the Koho Zone can be traced for approximately 3,500 metres along strike. Additional drill testing of this zone is planned.
Gold mineralization in this very large 1,670 km2 property displays similar characteristics with SEMAFO's Mana Mine (which hosts estimated mineral reserves and resources totaling 2.35 million ounces of gold and Inferred mineral resources totaling 0.91 million ounces of gold), which is located in the same geological belt, 60 kilometres to the northeast. The property is centered approximately 250 kilometres southwest of Ouagadougou, the capital of Burkina Faso and is cut by both a major highway and a high voltage power line.
Several more holes are planned to test the Vindaloo zone in the fourth quarter of 2010, prior to the cessation of drilling for the Holiday season. The drilling program is currently testing other targets as part of the concession work commitments on the Company's Houndé Property concessions. The drill program is scheduled to resume in early February, 2011 with two drills.
Don Dudek, Avion's Senior Vice President Exploration stated: "The similarity of mineralization styles, the stockwork-type character of the mineralization, the intensity of the alteration system and the strong correlation between gold mineralization and the geophysical anomalies, indicate in management's view, tremendous potential for the discovery of a major deposit in the Vindaloo area. Our exploration team eagerly awaits the continuation of the drill program in this area."
Avion's procedures for handling core have been presented in previous news releases (See for example Avion News Release dated May 13, 2010).
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.
Mining in Burkina Faso
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 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.