Avion Outlines Strategy as Operations in Mali Continue According to Plan During the Military Coup
30 März 2012 - 12:30AM
Marketwired
Avion Gold Corporation (TSX:AVR)(OTCQX:AVGCF) ("Avion" or the
"Company") announces that it continues to monitor the situation in
Mali where members of the National Army have mounted a coup.
Avion's management team together with its Board of Directors and
members of the Forbes & Manhattan advisory board meet daily to
review and discuss information that has been gathered from a
variety of sources. The Company notes that the re-opening of land
and air borders in Mali are positive developments towards the
restoration of normalcy to the economy and return of stability to
the country.
The Company also reports that operations at site are continuing
without interference and that mine activities are progressing
uninterrupted. Management notes the successful transition to
underground mining at Tabakoto has exceeded production
expectations.
Despite the ongoing operations and excellent progress at site,
there continues to be a risk that the political uncertainty in Mali
will cause delays in the ongoing mill expansion if Avion encounters
interruptions in receiving supplies and equipment. There have been
minimal delays to date and management is pursing contingency plans
to reduce future delays, but the actual effect on the mill
expansion schedule will not be known until after the political
situation stabilizes.
Avion also announces that the board and management felt it
prudent to have additional cash reserves to ensure the current mill
and mine expansion continues on time and according to schedule.
Although the board and management are generally not inclined to
enter into any type of forward selling or hedging, the Company
decided to enter into a sale of call options over a three year term
to strengthen the Company's balance sheet. This was a non-dilutive
form of financing that was relatively inexpensive considering the
situation in Mali and the Company's stock price. Avion received
cash proceeds of US$25 million by entering into the agreement for
the sale of European style calls on gold for the next twelve
quarters in an aggregate amount of approximately 36,000 ounces with
an average strike price of approximately $833 per ounce. The calls
represent less than 8% of the Company's planned gold production for
the next twelve quarters. There are no margin or covenant
requirements associated with this transaction. Funds from the sale
of the forward calls will be used to maintain Avion's exploration
and development programs and general corporate purposes.
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. 2011 production was 91,200 ounces of gold. The
current mineral reserve estimate (as of January 1, 2011) of 7.24
million tonnes grading 3.92 g/t Au totaling 913,100 ounces of gold
(proven and probable), for the Tabakoto project property,
demonstrates several sources of excellent grade open pit and good
grade underground mineral resources thus providing significant
flexibility for Avion's future mining plans. The Company has
developed an underground mine at the Tabakoto deposit, and is
developing another underground mine at the Segala deposit. The
Tabakoto project property also contains several producing open pit
mines. Production sustainability will continue to be supported by
exploration programs over an approximately 600 km2 exploration
package that both surrounds and is near to the Company's existing
mine infrastructure, and contains mineral resources on the Kofi
property. Additionally, mineral resources have grown considerably
at Avion's 1,600 km2 Hounde exploration property in Burkina Faso.
Aggressive exploration programs are underway at the Tabakoto, Kofi
and Hounde properties for 2012. Avion continues to progress towards
its short term goal of 200,000 ounces of gold per year and a longer
term goal of 400,000 to 500,000 ounces of gold per year through
development of its exploration properties. Avion has a highly
skilled management team, with a focus on growth and consolidation
within West Africa.
Cautionary Notes
Certain information set forth in this press release contains
"forward-looking statements", and "forward-looking information"
under applicable securities laws. Except for statements of
historical fact, certain information contained herein constitutes
forward-looking statements which include the impact of the
political and social conditions in Mali on the Company, use of
proceeds of the sale of call options, management's assessment of
Avion's targeted production, future plans, operations and mineral
resource estimates and are based on Avion's current internal
expectations, estimates, projections, assumptions and beliefs,
which may prove to be incorrect. Some of the forward-looking
statements may be identified by words such as "expects"
"anticipates", "believes", "projects", "plans", and similar
expressions. These statements are not guarantees of future
performance and undue reliance should not be placed on them. Such
forward-looking statements necessarily involve known and unknown
risks and uncertainties, which may cause Avion's actual performance
and financial results in future periods to differ materially from
any projections of future performance or results expressed or
implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, those risks
described in the annual information form of the Company. There can
be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Avion
undertakes no obligation to update forward-looking statements if
circumstances or management's estimates or opinions should change
except as required by applicable securities laws. The reader is
cautioned not to place undue reliance on forward-looking
statements.
Contacts: Avion Gold Corporation Michael McAllister Manager,
Investor Relations (416) 309-2134info@aviongoldcorp.com