Avion Gold Corporation is pleased to announce third quarter of 2011 production of approximately 21,687 ounces of gold from its Tabakoto/ Segala operations in Mali, West Africa.
Gold production during the period was lower by 4,413 ounces than the third quarter budget of 26,100 ounces. Contributing factors to the production shortfall included long delays in getting parts and supplies through customs at the port of Dakar, Senegal and through the Senegal/Mali border. This resulted in lower mechanical availability of the open pit mining fleet, and consequently lower grade ore was processed. Heavy rains during August also impacted production, reducing access to higher grade ore from the Dioulafoundou pit. As a result of the lower than planned production in the third quarter, Avion is providing guidance for 2011 between 95,000 ounces and 100,000 ounces of gold.
During the third quarter of 2011, the Company milled 227,900 tonnes of ore at an average grade of 3.12 g/t Au, with a 95.4% mill recovery. This represents the highest tonnage milled in one quarter that the Company has achieved, averaging 2,477 tonnes per day during the quarter. The table below presents 2011 year-to-date production results:
Q1 Q2 Q3 YTD
Ore Milled (000's tonnes) 180.8 197.1 227.9 605.7
Head Grade (g/t Au) 3.64 4.21 3.12 3.63
Plant Recovery (%) 96.2 96.8 95.4 96.2
Gold Production (oz)(1) 20,272 25,823 21,687 67,783
(1) Ounces adjusted to final refined product
Commenting on the third quarter 2011 production numbers, Avion's Chief Operating Officer, Mr. Andrew Bradfield, stated: Closure of the main shipping port in the Ivory Coast for several months meant that most shipments to West Africa were diverted to the port of Dakar, Senegal, which is where Avion transports all of its sea containers. This caused substantial delays in moving supplies through the port of Dakar due to congestion. As a result, many spare parts for Avion's fleet of mining equipment did not arrive as planned, and equipment availabilities were lower than anticipated. Additionally, open pit operations were subject to normal rainy season delays. Avion management is confident that it can exceed its budgeted production plan for the fourth quarter of 2011, but advises that its guidance for the year has been revised to between 95,000 ounces and 100,000 ounces of gold.
Tabakoto underground development has exceeded the planned advances for the last two quarters of 2011. Ore zones continue to be developed on multiple levels in preparation for production stoping in the first quarter of 2012.
Preparations for starting the underground portal at the Segala deposit are nearly complete, and advance of the main ramp decline is anticipated to begin this month.
The Company continues on plan and budget for its plant expansion project to increase processing capacity from 2,000 tonnes per day to 4,000 tonnes per day. Construction remains on schedule to be completed in Q1 of 2012. The production forecast for 2012 is 160,000 ounces of gold. All of the plant equipment has been ordered and most of the major equipment items are due to arrive at the mine site in November. Detailed engineering is 85% complete. Civil and earthworks are approximately 75% complete. The SAG mill, gold room, gravity tower, CIL and leach tanks, electrical room, and stockpile foundations are completed. Mechanical and piping installations are due to commence in October. Electrical and automation installations are due to begin in early November.
Andrew Bradfield, P.Eng., the Chief Operating Officer of the Company, and a qualified person under National Instrument 43-101, has reviewed and approved the scientific and technical information in this press release.
About Avion Gold Corporation
Avion is a Canadian-based gold mining company focused in West Africa that holds 80% of the Tabakoto and Segala gold projects in Mali. Gold production commenced at these projects in 2009 with approximately 51,290 ounces produced. 2010 production was 87,630 ounces of gold. Production sustainability will continue to be supported and enhanced by an aggressive 2011 drill program over an approximately 600 km2 exploration package that both surrounds and is near to the Company's existing mine infrastructure. 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. On July 5, 2011 Avion announced its initial proven or probable mineral reserve estimate of 7.24 million tonnes grading 3.92 g/t Au totaling 913,100 ounces of gold at the Tabakoto Project. Additionally, the 1,670 km2 Hounde exploration property in Burkina Faso continues to return promising results. These properties are subject to a US$ 16 million dollars, greater than 75,000 metre, drill-focused, exploration program in 2011. Avion continues to progress towards its medium term goal of 200,000 ounces of gold per year and a longer term goal of organic growth through development of its exploration properties. The Company is developing an underground mine at the Tabakoto deposit, and is preparing to mine underground at the Segala deposit. Avion has a highly skilled management team, with a focus on growth and consolidation within West Africa.
This press release contains forward-looking information within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements with respect to the timing and amount of estimated future production, the development potential and timetable of the Tabakoto, Segala, Kofi and Hounde projects; the future price of gold; the estimation of mineral resources and mineral reserves; conclusions of economic evaluation (including scoping studies); the realization of mineral resource and mineral reserve estimates; development and exploration; costs of future activities; capital and operating expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks. Generally, forward-looking information can be identified by the use of forward-looking terminology such as plans, expects or does not expect, is expected, budget, scheduled, estimates, forecasts, intends, anticipates or does not anticipate, or believes, or variations of such words and phrases or state that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to those risks described in the annual information form of the Company which is available under the profile of the Company on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
For additional information, please visit our website at www.aviongoldcorp.com. Follow us on Facebook and Twitter at: @AvionGoldAVR.
Avion Gold Corporation
Manager, Investor Relations