Avion Gold Reports Updated Resource Estimation for Tabakoto Project

Avion Gold Corporation (TSX:AVR)(OTCQX:AVGCF), today announced its updated resource estimation for eight deposit groups which comprise the Tabakoto Project.

Highlights for the Tabakoto Project are as follows:

• Average grade of the Tabakoto Deposit (including Tabakoto NE, Tabakoto NW, Tabakoto South and Dabo zones) Measured and Indicated mineral resources increased 72% from 3.47 g/t Au to 5.98 g/t Au

• Average grade of the Tabakoto Deposit (including Tabakoto NE, Tabakoto NW, Tabakoto South and Dabo zones) Inferred mineral resource increased 46% from 3.66 g/t Au to 5.33 g/t Au

• Tabakoto Project Indicated open pit mineral resources comprise 992,000 tonnes grading 4.27 g/t Au for 136,300 ounces³

• Tabakoto Project Inferred open pit mineral resources comprise 2,954,000 tonnes grading 3.57 g/t Au for 339,100 ounces³

• Tabakoto Project Measured and Indicated underground mineral resources comprise 5,014,000 tonnes grading 5.23 g/t Au for 842,700 ounces³

• Tabakoto Project Inferred underground mineral resources comprise 6,063,000 tonnes grading 4.55 g/t Au for 887,000 ounces³

The current mineral resources estimate for the Tabakoto project demonstrates several sources of excellent grade open pit and good grade underground mineral resources thus providing significant flexibility for Avion's future mining plans. Compared to the initial Tabakoto Deposit resource, presented on May 19, 2009, through additional drilling and refining of the geological models, the average grade of the Measured and Indicated Tabakoto Resources (including the Tabakoto, Tabakoto NW zones, Tabakoto NE zones, Dar Salam and Dioulafoundou deposits) increased 72% from 3.47 g/t Au to 5.98 g/t Au and the average grade of the Inferred mineral resource increased 46% from 3.66 g/t Au to 5.33 g/t Au. This change is considered by Avion to be material as it demonstrates higher grades, which in turn supports Avion's plans to commence underground mining at the Tabakoto Deposit.

Mineral Resource Estimates

1. The Inferred Resources are in addition to the Measured and Indicated Resources.
2. The mineral resources have been classified in accordance with requirements of NI 43-101 and the CIM standards. Resource estimates based on a gold price of USD$1000 per ounce and a 96% recovery.
3. 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 on December 12, 2008 and have reviewed the scientific and technical information in this document relating to those estimates.
4. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

John Begeman, President and CEO, commented: "The increase in grade of the Measured, Indicated and Inferred mineral resources for both open pit and underground mineral resources demonstrates Avion's improved understanding of the mineralized zones and the opportunity to further increase the project's mineral resources in the future. The increase in grade also further demonstrates the viability of Avion's decision to proceed with the development of these mineralized zones to depth."

Don Dudek, Senior Vice President Exploration, Commented: "Information gained from the 2010 drill program significantly improved Avion's understanding of the orientation and plunge of the mineralized zones. This understanding now allows Avion to more effectively target the higher grade core of the individual mineralized zones at depth and focus our exploration expenditures into those targets that will provide the best payback."

During 2010, Avion continued to focus 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 current resources are concentrated above 300 metres vertical depth from surface with most zones open down plunge and to some extent along strike. Thus, management believes that the likelihood of adding additional resources in the future is high.

Subsequent to the resource estimate for the Tabakoto South/Dabo, Tabakoto NE and Tabakoto NW zones, Avion has drilled another 15 drill holes. These holes were drilled to further define the high grade zones and management believes they may support the conversion of some Inferred mineral resources to Measured and Indicated mineral resources.

Avion's current resources comprise a mix of open pit and underground resources. In management's opinion this combination of source material provides tremendous flexibility as the Company transitions from open pit mining at Ségala to underground mining at Tabakoto and Ségala.

Technical Data

Open Pit Mineral Resources

At the Tabakoto Project, open pit resources have been defined in six deposits. The currently estimated open pit Indicated mineral resources include 992,000 tonnes grading 4.27 g/t Au containing 136,300 ounces of gold and open pit Inferred resources of 2,954,000 tonnes grading 3.58 g/t Au containing 339,100 ounces of gold. An open pit has been designed for the Dioulafoundou zone using Whittle software. Open pits are being designed for both the Tabakoto South/Dabo zones and for the Djambaye II zone. Additional drilling and trenching will be carried out at the Dar Salam zone and north of the Tabakoto pit prior to designing open pits in these areas. More drilling is also required along the Djambaye II trend which has some large gaps between drill holes and is open to the north and south. Of particular interest are those areas where the gold mineralized Tabakoto cross structures would intersect the Djambaye II trend. Avion plans to convert as much open pit resources to reserves as the available data will permit by the end of Q1, 2011.

Dioulafoundou hosts open pit Indicated resources of 598,000 tonnes grading 4.99 g/t comprising 95,900 ounces of gold and open pit Inferred resources of 257,000 tonnes grading 6.35 g/t Au comprising 52,500 ounces of gold. The current resource represents a 76% increase in contained gold resources compared to the resource statement presented in July (Avion news release July 14, 2010). Mining of the open pit commenced in October. The Dioulafoundou open pit is expected to provide at least 50% of the ore feed to the Tabakoto Mill in 2011.

Underground Mineral Resources

Underground mineral resources are currently focused below and near to the Ségala Main and Tabakoto pits; initial underground development is planned in both of these areas. Avion will continue to work toward converting Inferred mineral resources to Measured and Indicated resources with in-fill drill holes and will further test the Ségala Main and Tabakoto zones to depth. Additional underground resources have been defined at Dioulafoundou, Djambaye II and Dar Salam zones; more drilling is required in these three zones in order to define sufficient underground resources to support underground mining.

Tabakoto Deposit

The Tabakoto Deposit consists of 18 northwest trending (NW Tabakoto zones) mineralized structures and 14 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. 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 NW 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.

Ségala Deposit

The Ségala Deposit consists of the Ségala Main and Ségala NW zone, both of which have been subject to open pit mining in 2009 and 2010. The Ségala Main deposit has provided the bulk of the mill feed over the past 23 months. This zone has been traced for 350 to 400 metres along strike and remains open at depth on the Ségala 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 Ségala 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 likely be carried out once underground mining has commenced.

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 resources.

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 gold price of US$1000 per oz, a 96% process recovery, mining costs of US$34/tonne, process costs of US$20/tonne and G&A costs of US$8 tonne were used to determine the 2.0 g/t underground cut-off grade. For potentially open pittable resources a 1.0 g/t cut-off grade was used.

The updated resource calculations were prepared by Eugene Puritch, P. Eng. and Antoine Yassa, P. Geo. from P&E, Qualified Persons under NI 43-101 who are independent of the Company and have reviewed the scientific and technical information in this document relating to those estimates. Eugene Puritch, P. Eng. and Don Dudek, P.Geo., Senior Vice President Exploration of Avion both Qualified Persons under National Instrument 43-101 have reviewed and approved the updated resources and the technical data presented in this press release. Avion has not completed a feasibility study in regards to the mineral resources presented herein and there is no certainty the proposed operations will be economically viable.

A NI 43-101 compliant report to support the above mineral resource update is in progress and is expected to be completed in early 2011.

In 2011 Avion is planning a US$ 4 million dollar, approximate 30,000 metre, exploration drill program over the Tabakoto Project area. This program will initially 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.