(REUTERS) -- Avion Gold Corp said production has started at its newly developed underground mine at the Tabakoto gold deposit in Mali, West Africa.

The West Africa-focused company, which holds 80 percent of the Tabakoto and Segala gold projects in Mali, said the Tabakoto underground mine is scheduled to produce about 470,000 tonnes of ore in 2012.

It (commencement of production) is an important step in the company's goal of achieving 4,000 tonnes per day of process plant capacity in 2012, Chief Operating Officer Andrew Bradfield said in a statement.

The increase in capacity is expected to achieve a run-rate of 200,000 ounces of gold per annum by the fourth quarter, Bradfield said.

Ore is currently being extracted from the stope, a steplike excavation made in a mine. The entire stope is estimated to contain 10,600 tonnes of ore at an average diluted grade of 4.11 gram/tonne of gold, the company said.

Avion Gold shares closed at C$1.48 on Friday on the Toronto Stock Exchange.