Oct 7 2010
Avion Gold Corporation (TSX VENTURE:AVR)(OTCQX:AVGCF) ("Avion") and Avocet Mining PLC (AIM:AVM) ("Avocet") are pleased to announce that they have closed Avion's previously announced acquisition of a 100% interest in the Hounde Group concessions ("Hounde") in Burkina Faso (see Avion news releases dated January 29, 2010 and July 5, 2010).
In consideration for 100% of the Hounde assets, Avion has issued Avocet 10,300,000 shares of Avion.
This very large property lies within a new emerging gold camp, along more than 60 kilometres of the same geological package that hosts SEMAFO's Mana Mine to the northeast, which has Reserves of 1.77 million ounces, Measured and Indicated resources of 0.52 million ounces of gold and anticipated 2010 production of over 235,000 ounces. ACC Resources Ltd.'s ("ACC") 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).
Avion has conducted an airborne magnetic and radiometric survey over the entire property. As well, Avion has completed 21 holes totaling approximately 3,900 metres of drilling that tested the Vindaloo zone and targets at the southern end of the property. A resource estimation of the Vindaloo zone is in progress. Drilling will resume in mid-October with an additional 3,000 to 4,000 metres of drilling planned. Metallurgical testing will commence once all assay results have been received. This property has never been subjected to a regional type exploration survey. Avion believes that the chance for the extension of known zones and the discovery of additional zones is high, when considering the abundance and strike extent of the known zones and untested artisanal mining areas.
Don Dudek, Avion Senior Vice President, Exploration stated: "The Hounde acquisition not only provides Avion with an excellent strategic position south of Semafo's Mana project it also provides a new platform for growth. Avion has gotten off to a great start on the Hounde property, first through the expansion of the Vindaloo zone and secondly by the identification of an extensive, largely untested trend of artisanal workings and gold-in-soil anomalies that extends for more than 25 kilometres along strike. We strongly believe that we will both define extensions to the Vindaloo zones and discover new zones on the property."
The mining industry in Burkina Faso is growing at a fast rate due to a combination of a stable elected democratic government, good prospective 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% or 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. In addition, two of the eight Houndé concessions, which include the Vindaloo zone, are subject to a 2% NSR on gold production and certain back-in rights to Barrick Exploration Africa Limited.
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.