Avion adds to its West African portfolio

Avion Gold (AVR-T,AVGCF-O) continues to bulk up on West African gold assets as it has closed a deal to acquire the Kofi property in Mali from Axmin (AXM-V).

In total Avion will pay Axmin $500,000 in cash and issuing 4.5 million shares for the property, but has finalized the deal by handing over 25% of what is due. The remaining 75% will be paid in three equal tranches over the course of 2011.

For its part, Axmin says it is focused on its Passendro gold project in the Central African Republic and that the funds generated from the sale of Kofi will be put towards updating a feasibility study there.

The Kofi property is a large swath of land which sits 5-km northwest of Avion’s Tabakoto project and covers 333 sq. km.

The property wraps around the north side of Randgold Resource’s (GOLD-N, RRS-L) Loulo Mine concessions, which boast measured and indicated resources of 62.69 million tonnes grading 4.55 grams gold.

What is of particular interest to Avion is that four of the nine known mineralized zones at Kofi sit along two linear mineralization trends that are defined by the alignment of deposits at Loulo.

The two trends have a magnetic signature that extend for 15-km on Kofi. Avion says it will target the areas in its upcoming exploration program. It plans to drill 22,000 metres in 2011.

In all Kofi hosts nine mineralized zones with identified mineral resources.

All of the estimated mineral resources lie in the Kofi Nord concession which has indicated resources of 3.24 million tonnes grading 2.55 grams gold for 293,000 oz.

Inferred resources at the property come in at 5.26 million tonnes grading 2.18 grams gold for 368,000 oz.

Avion says that most of the zones are open along strike and to depth and that they have only been tested from 60 to 150 metres below surface.

All of the zones are within 15 to 38 km of Tabakoto.

“The acquisition of the Kofi property allows the Company to take advantage of a resource that can potentially be trucked to our existing milling and processing facility (at Tabakoto),” Avion’s president and chief executive, John Begeman said in a statement.

Avion has a head-start at the project as it has already re-furbished the exploration camp, compiled the historic exploration data and completed 22 drill holes for 4,458 metres over and near to the Kofi C zone.

Before the Kofi acquisition, Avion’s key assets were its 80% stake in the Tabakoto and Segala gold projects which are also in Mali.

Gold production at the two projects began in 2009 with just over 51,000 oz. produced and it is now developing an underground mine at the Tabakoto deposit, and is preparing to mine underground at the Segala deposit

Avion says production for 2010 will come in slightly above its guidance of 85,000 oz. of gold.

The company is also actively exploring its Hounde property in Burkina Faso is returning promising and in total, spent US$ 12 million dollar on 70,000 metres worth of drilling in 2010.