Malian gold intercepts lift Avion

Vancouver – As it gears up to start open pit operations at the Segala project about 200 km south of Kayes, Mali, Avion Resources (AVR-V) confirms Segala gold grades and reports one of its best high-grade gold intercepts from the nearby and past-producing Tabakoto open-pit.

At Segala Avion hit 27 metres in hole 26 grading 4.28 grams gold per tonne starting 6 metres downhole (or 3.46 grams gold after cutting results over 30 grams gold). Hole 25 returned 38 metres grading 3.07 grams gold starting 29 metres downhole (2.64 grams gold, cut).

The highest grades of the latest drill results came from deeper within the Tabakoto zone. Starting at a depth of 125 metres hole 23 hit 17 metres grading 26.94 grams gold (13.02 grams gold, cut).

Avion says results like this one suggest Tabakoto might suit underground mining.

In the meantime, however, Avion plans on having a go at open-pit mining the Segala deposit.

Before Avion acquired the project Nevsun Resources (NSU-T) mined Tabakoto for a year and a half, recovering about 100,000 oz. gold, until it closed up shop in 2007 and sold its 80% interest in the project, along with mill and equipment, to Avion for US$20 million.

The Malian government holds the other 20% while Nevsun retains a 1% net smelter return royalty.

At the time of closure Nevsun said it had operated the mine at loss. But to keep down costs and to profit from the operation Avion says it will start open-pit mining Segala first, not Tabakoto where Nevsun began.

Avion believes Segala’s geology is simpler than Tabakoto and the mineralization is softer, making it easier to run through the mill.

Based on its projections Avion says there are at least two years worth of near-surface resources at Segala. It plans on milling 600,000 tonnes of ore in 2009 for about 56,000 oz. gold.

In 2004 Nevsun pegged Segala’s proven and probable reserves at 3.9 million tonnes grading 2.98 grams gold.

To help fund the Segala startup in October Avion sold half its stake in the Segala project to Dynamite Resources (DNR-V) for US$5 million, leaving both companies with a 40% interest in the Segala project. Avion retained its 80% interest in Tabakoto.

The agreement gives Avion a 20% back in right for US$10 million and a portion of initial gold sales.

Following open pit operations at Segala Avion plans to restart the Tabakoto open-pit mine and go underground at both projects.

News of the drill results boosted Avion’s share price 2¢ to close at 7¢. It has about 76 million shares issued and a 52-week trading range between 3.5¢ and 68¢.