TORONTO, ONTARIO--(Marketwire - July 5, 2011) - ("Avion" or "the Company") (News - Market indicators)(OTCQX:AVGCF), is pleased to announce its initial mineral reserve estimation for seven deposit groups and several ore stockpiles which comprise the Tabakoto Project in Mali, West Africa. Highlights of Avion's mineral reserves and mineral resources are as follows:

• Tabakoto Project open pit and stockpiled Proven and Probable mineral reserves comprise 2,611,000 tonnes grading 2.90 g/t Au for 243,600 ounces of gold.

• Tabakoto Project underground Proven and Probable mineral reserves comprise 4,630,000 tonnes grading 4.50 g/t Au for 669,500 ounces of gold.

• Additional Measured and Indicated mineral resources comprise 1,359,000 tonnes at 3.41 g/t Au containing 149,100 ounces of gold.

• Additional Inferred mineral resources comprise 7,892,000 tonnes at 4.22 g/t Au containing 1,070,500 ounces of gold.

The mineral reserve estimate (see tables below) for the Tabakoto Project demonstrates several sources of open pit and underground mineral reserves that provide significant flexibility for Avion's mining plans. The Company is currently transitioning from an open pit mining operation to primarily an underground mining operation with open pit mining to serve as contingency mill feed. The mineral reserve estimate is as of January 1, 2011.

1. The mineral reserves have been classified in accordance with requirements of NI 43-101 and the CIM standards. Reserve estimates are based on a gold price of USD$1,183 per ounce and a 94% process plant recovery.
2. Andrew Bradfield, P.Eng. and Don Dudek, P.Geo. Sr. Officers of Avion and Qualified Persons, as such term is defined under NI 43-101, are responsible for the mineral reserve estimates and have reviewed and approved the scientific and technical information in this document relating to those estimates.
3. The mineral reserves in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.
4. "UG" indicates Underground, "OP" Open Pit and "SP" Stockpile.

A National Instrument 43-101 ("NI 43-101") compliant technical report to support the above mineral reserve estimate is in progress and is expected to be completed and publicly disclosed within the next 45 days from the date of this press release.

Avion is currently planning to increase its gold production to a rate of 200,000 ounces per year. The mineral reserve of 913,200 ounces of gold represents over five years of mine life based on Avion's current projected production. In 2011, Avion has forecasted production of 100,000 ounces of gold, increasing to approximately 160,000 ounces in 2012 with production thereafter planned at approximately 200,000 ounces of gold per annum.

John Begeman, President and CEO, commented: "The issue of the Company's initial mineral reserve statement marks a significant milestone for Avion. The Company has over two years of operating experience at the Tabakoto Project, and has demonstrated that the mine is profitable. Avion's understanding of the mineralized zones has developed considerably since starting the project, and management firmly believes that there is opportunity to increase the mine's mineral reserves in the future. The conversion from mineral resources to mineral reserves for ore zones at depths up to 300 metres below surface supports Avion's decision to proceed with the underground development of the Tabakoto and Ségala mineralized zones to depth."

Over the past two years, Avion focused on delineating higher grade cross-structures in the Tabakoto pit area, defining additional open pit and underground mineral resources at Dioulafoundou, and better defining the near surface resources at the northern end of the Djambaye II zone. Avion's mineral reserves are concentrated above 300 metres vertical depth from surface, with all zones open down plunge and to some extent along strike. Management believes that the likelihood of adding additional mineral reserves in the future is high.

Avion's mineral reserves comprise a mix of open pit and underground reserves. In management's opinion, this combination of source material provides tremendous flexibility as the Company transitions from primarily an open pit mining operation to primarily an underground mining operation.

In combination with the mineral reserves, additional Measured and Indicated mineral resources of 1,359,000 tonnes at 3.41 g/t Au containing 149,100 ounces of gold and Inferred mineral resources of 7,892,000 tonnes at 4.22 g/t Au containing 1,070,500 ounces of gold have been defined in several deposits. These mineral resources have not yet been supported by open pit or underground mine plans, and require additional work to convert to mineral reserves and to upgrade the Inferred mineral resources to Measured and Indicated mineral resources. Avion management believes that there is a reasonable likelihood of upgrading a significant portion of these mineral resources to mineral reserves with further drilling and exploration work.

Technical Data

Tabakoto Deposit

The Tabakoto Deposit consists of 18 modeled northwest trending (NW Tabakoto zones) mineralized structures and 14 modeled northeast-trending zones (NE Tabakoto zones, Tabakoto South Zone and Dabo zone). Of these zones, seven of the best developed mineralized structures (NE1, NE2, NE hanging wall, NW1, NW2, Tabakoto South and Dabo) were drill tested to approximately 300 metres depth. All zones are open to depth. Additional, un-modeled, mineralized structures have been noted below the Tabakoto pit and north and south of the Tabakoto pit. Avion is currently advancing two mine portals under the Tabakoto pit with the northern portal targeting the northwest-trending zones and the southern portal targeting the northeast-trending zones.

Dioulafoundou Deposit

The Dioulafoundou mineralized system consists of two stronger gold mineralized zones and several, smaller, parallel gold mineralized zones. The strongest of the zones, the Dioulafoundou NW1 zone, has been traced for approximately 400 metres along strike and to approximately 325 metres depth. A second, parallel, zone of gold mineralization, the Dioulafoundou NW2 zone, lies approximately 60 metres to the south and has been traced for approximately 190 metres along strike and to approximately 300 metres depth. Both zones are steeply dipping, steep east plunging and open down plunge and to a lesser extent, to the east. Since the bulk of the mineral resources below the open pit are in the Inferred category, drilling is planned to upgrade these resources to Measured and Indicated status to determine if sufficient underground mineral resources are present to support a third underground mine.

Ségala Deposit

The Ségala Deposit consists of the Ségala Main and Ségala NW zone, both of which have been subject to open pit mining in 2009 and 2010. The Ségala Main deposit has provided the bulk of the mill feed over Avion's first two production years. This zone has been traced for 350 to 400 metres along strike and remains open at depth on the Ségala Main Zone with intersections as deep as 600 metres below surface. Avion also believes there is a reasonable expectation that additional mineral resources can be defined between 300 metres to 600 metres below surface and below the 600 metre level. The Ségala NW zone has been traced for approximately 550 metres along strike and is open below approximately 220 metres depth. Drilling to further develop the depth potential will be carried out prior to defining mineral reserves.

Djambaye II Deposit

The Djambaye II mineralized structure/zone dips at -70 degrees to the east and has now been traced by drilling for approximately 4,400 metres and is still open to the north, south and below 200 metres depth. Locally the Djambaye II zone comprises two parallel zones and there is local evidence of gold-bearing cross structures. The Djambaye II zone is the longest continually mineralized structure on the Tabakoto Project and provides an excellent opportunity to define additional open pit and underground mineral resources. Current open pit mineral reserves are for a 900 metre long section at the north end of the Djambaye II zone. A review of the sectional data indicates that the currently designed pit depth and extent is limited by a lack of drilling data verses an end to the mineralization. Additional drilling is a priority. As well, based on results to date, management believes that there is a reasonable potential to define sufficient underground mineral resources at Djambaye II to consider underground mining in the future.

Mineral Resources

At the Tabakoto Project, open pit mineral resources have been defined in six deposits: Dioulafoundou, Tabakoto South/Dabo, Djambaye II, Dar Salam and just north of the Tabakoto pit.

The majority of the underground mineral resources are currently defined below and near to the Ségala Main and Tabakoto pits. Avion will continue to work toward converting Inferred mineral resources to Measured and Indicated mineral resources with in-fill drill holes and will further test the Ségala Main and Tabakoto zones to depth. Additional underground mineral resources have been defined at Dioulafoundou, Djambaye II, Ségala NW and Dar Salam; more drilling is required in these four zones to define sufficient underground mineral resources to support underground mining.

In order to document the Tabakoto Project resources, Avion, with the assistance of Antoine Yassa, P.Geo. of P&E Mining Consultants Inc. (P&E), first interpreted the zones with a 0.5 g/t Au to 1 g/t Au grade shell to define open pit resources and then defined a 2.0 g/t Au grade shell to define underground resources. This zone definition was then provided to P&E who has carried out a site visit, collected verification samples, finalized the mineralization wire frames and updated the deposit mineral resources. The updated mineral resource capped gold assays at 15 to 50 g/t Au, depending on the individual zone. A 2.0 g/t Au cut-off grade was used to determine underground mineral resources, and for potentially open pittable resources, a 1.0 g/t Au cut-off grade was used.

A current mineral resource table is presented below. The table summarizes mineral resource estimates presented in press releases issued by Avion on December 30, 2010 and May 3, 2011. The mineral resource estimates are current as of January 1, 2011, with the exception of Tabakoto NW and Djambaye II which were updated on May 3, 2011.

1. Mineral resource estimates based on a gold price of USD$1,000 per ounce and a 96% process plant recovery.
2. Eugene Puritch, P.Eng. and Antoine Yassa, P.Geo. from P&E Mining Consultants Inc., Qualified Persons under NI 43-101 who are independent of the Company, are responsible for the mineral resource estimates presented herein.
3. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
4. The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured mineral resource category.
5. The mineral resources in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.
6. "UG" indicates Underground and "OP" Open Pit.

During 2011 Avion is carrying out a US$ 4 million dollar, approximate 30,000 metre, exploration drill program over the Tabakoto Project area. To date, approximately 14,200 metres of drilling in 132 holes has been completed. The remaining program will focus on continuing to define the mineralized cross-structures north and south of the Tabakoto Pit, defining the underground potential of the Dioulafoundou zone, tracing the Djambaye II zone along strike and to depth, in-fill drilling along the Djambaye II zone, testing for additional cross-structures near Dioulafoundou, trenching over the Dar Salam zone and to test structural and Au-in-soil targets on the remainder of the property.

Andrew Bradfield, P.Eng., the Chief Operating Officer, and Don Dudek, P.Geo., the Senior Vice President, Exploration, of the Company and qualified persons under National Instrument 43-101 have 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 Ségala 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 reserve estimate for the Tabakoto Project demonstrates several sources of excellent grade open pit and good grade underground mineral reserves that provide significant flexibility for Avion's future mining plans. Additionally, the 1,670 km² Houndé exploration property in Burkina Faso continues to return promising results. These properties are subject to a current US$ 13 million dollar, approximate 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 with over 3,500 metres of development completed to date and is preparing to mine underground at the Ségala deposit. Avion has a highly skilled management team, with a focus on growth and consolidation within West Africa.

Cautionary Notes

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements regarding the impact of the mineral reserve statement on the Company and the timing of the NI 43-101 compliant report; statements with respect to the development potential and timetable of the Tabakoto, Kofi and Houndé projects; the future price of gold; the estimation of mineral resources; conclusions of economic evaluation (including scoping studies); the realization of mineral resource and mineral reserve estimates; the timing and amount of estimated future production, 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.