Oct 27 2010
Avion Gold Corporation (TSX VENTURE:AVR)(OTCQX:AVGCF) has announced an initial resource estimate for the Vindaloo zone on the Houndé Property in Burkina Faso.
Avion recently finalized its acquisition of the property from Avocet Mining PLC (see Avion news releases dated January 29, 2010, July 5, 2010, and, October 7, 2010).
Highlights of the Vindaloo initial resource estimate at a 1.0 g/t Au cut-off grade defined within an optimized pit shell are as follows:
- 883,000 tonnes Indicated Mineral Resources at 2.23 g/t Au totaling 63,000 Ounces
- 5,725,000 tonnes Inferred Mineral Resources at 2.97 g/t Au totaling 547,000 Ounces
- 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 and are subject to the findings of a definitive feasibility study.
- 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.
- The Vindaloo Zone Resource Estimates were prepared by 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
- 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 December 11, 2005.
- The gold price used in this estimate was the June 30, 2010 two year trailing average of US$1,027/oz. Au recovery was 92% and mining costs were US$2.75/tonne of ore and US$1.50/tonne of waste. Processing and G&A costs combined were US$30/tonne. Pit optimization slopes were 50 degrees.
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 km southwest of Ouagadougou, the capital of Burkina Faso.
Avion has intersected gold mineralization along a 500 metre strike length to at depth of approximately 200 metres from surface with drill hole step-outs of 75 to 100 metres horizontally and vertically. This zone is open along strike and to depth and has been defined by approximately 23 drill holes. The mineralization trend, associated with the Vindaloo zones, can be traced through drilling, soil survey data and magnetic surveys for over 2,500 metres along strike.
The Vindaloo zone is hosted near the contact between an intensely sericite- and silica-altered mafic intrusion and similarly-altered, intensely sheared and altered intermediate to mafic volcanoclastics. The mineralization is often quartz stockwork-style, intrusion-hosted and weakly to moderately pyritic. The entire mineralized package strikes north-northeast and dips steeply to the west. Higher gold grade zones have been intersected where the intrusion narrows.
John Begeman, Avion's President and CEO, stated: "The initial resource for the Vindaloo zone is very encouraging especially as the zone is open in all directions and that the overall grade is similar to that at Semafo's Mana mine. Avion's management is excited by what we believe are an abundance of quality drill targets, some of which will be tested in October and November."
Additional drill testing is planned in the fourth quarter of 2010. However, due to work commitments on the Company's other Houndé Property concessions, further drill testing at the Vindaloo zone will be limited, at this time, to 4 to 6 holes to test for strike extensions of the zone.
Technical Data
In order to determine the resources for Vindaloo, Avion initially interpreted the mineralized zone wireframes with an approximate 0.5 g/t Au cut-off grade. This zone definition was subsequently provided to P&E Mining Consultants Inc. ("P&E") who carried out a site visit, collected verification samples, finalized the mineralization wireframes and prepared the deposit mineral resource estimate. The mineral resource is constrained by two zones varying in true width from approximately 3.5 to 40 metres. Grade capping of gold assays was at 10 to 35 g/t Au, depending whether in a fresh or saprolite mineralized lens. Au grade model blocks were interpolated with the inverse distance cubed (1/d3) method. Assumptions of a gold price of US$1,027 per oz (Sep 30, 2010 24 month trailing average), 92% process recovery, ore mining costs of US$2.75/tonne, waste mining costs of US$1.50 /tonne, process costs of US$22/tonne and G&A costs of US$8.00 tonne were used to determine the 1.0 g/t Au open pit cut-off grade.
The Vindaloo resource calculation was prepared by Eugene Puritch, P. Eng. and Antoine Yassa, P. Geo. of P&E Mining Consultants Inc., both "Qualified Persons" as defined by NI 43-101who are independent of the Company. Mr. Puritch, President of P&E and Don Dudek, P.Geo., Senior Vice President, Exploration of the Company and a qualified person under National Instrument 43-101, have reviewed and approved the scientific and technical information in this press release.
Avion's procedures for handling core have been presented in previous news releases (See for example Avion News Release dated May 13, 2010).
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 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.