Avion Gold Corporation (TSX:AVR)(OTCQX:AVGCF) ("Avion" or the "Company") announces that its mill expansion project has reluctantly been temporarily suspended due to business disruptions associated with the military coup in Mali. Mining and milling operations continue at site with Avion's existing mill. Suspension of the expansion plans is a direct result of some of Avion's contractors demobilizing back to their home bases due to foreign government travel warnings for Mali as well as resultant slowdown of construction supplies moving through customs at Mali's borders. An interim government has been appointed in Mali and is working to re-establish the government ministries. Avion is working with the interim government and the new ministries to return operations and efficiencies to a normal state.

The foreign government travel warnings issued are mostly applicable to the northern half of the country. Avion has taken and is taking prudent precautions to ensure the safety and welfare of its employees at site which is located approximately 350 kilometres from the Capital of Bamako and over 1,000 kilometres from the insurgency in the northern part of Mali.

Andrew Bradfield, Chief Operating Officer at Avion, stated "It is disappointing to have to temporarily halt the mill expansion so close to completion. However, without some of the contactors and upgrade supplies on site we had no choice but to put the project on standby. The suspension of the expansion plans will affect Avion's planned production growth. However, regular supplies and fuel shipments continue to arrive at site, a large amount of consumable inventory exists at the mine, our 2,000 tonne per day mill continues to run well and we are still producing gold. Once the political situation has been resolved, we expect to be able to provide a revised timetable for the completion of the mill upgrade."

The 4,000 tonne per day mill expansion project is approximately 80% complete from a cost spend perspective.

"Management is hopeful that the political situation in Mali will be resolved this year so that Avion can continue with expansion at Tabakoto" stated John Begeman, President and CEO of Avion. "It is unfortunate that Avion has been forced to suspend the mill expansion as this will result in less royalty revenues for the Republic of Mali and lower anticipated production and revenues for the Company."

Avion had previously provided production guidance of between 140,000 and 150,000 ounces of gold. It is difficult for the Company to provide updated guidance until it is known when the government travel warnings will be lifted and the contractors can return to Tabakoto. If the expansion remains on hold for the remainder of 2012, production will be in the order of 90,000 to 100,000 ounces of gold for the year.

Throughout the rest of 2012, Avion will continue to mine from and develop the Tabakoto underground deposit, mine the Dioulafoundou open pit deposit, develop and mine the Djambaye II open pit deposit and develop the Segala underground deposit.

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. 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. 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, the impact of the suspension of the mill expansion on the Company and production, management's assessment of Avion's targeted production, future plans, operations and mineral resource estimates which are based on Avion's current internal expectations, estimates, projections, assumptions and beliefs, and 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