TORONTO, ONTARIO--(Marketwire - June 9, 2011) - Avion Gold Corporation (News - Market indicators)(OTCQX:AVGCF) ("Avion" or "The Company") is pleased to announce the results of drilling carried out over the Vindaloo area, Houndé Project, Burkina Faso to date during its 2011 exploration program. This work has been successful in tracing the Vindaloo zone mineralization both north and south of the previously reported Vindaloo zone. The strike length has increased from 1,200 metres to a distance of 2,300 metres. This mineralized trend is still open to the north and south. Additional mineralization was intersected at the Koho zone, located 350 metres east, the Madras zone, located 300 metres west and the Madras NW zone located 600 metres west, of the Vindaloo zone trend. Highlights of the current drill program include the following intercepts:

• 2.80 g/t Au over 53.7 metres at Vindaloo zone
• 3.25 g/t Au over 11.0 metres at Vindaloo zone
• 3.88 g/t Au over 11.0 metres at Vindaloo zone
• 8.16 g/t Au over 8.9 metres at Vindaloo zone
• 3.74 g/t Au over 16.0 metres at Vindaloo zone
• 5.98 g/t Au over 22.0 metres at Vindaloo zone
• 11.48 g/t Au over 32.0 metres at Vindaloo zone
• 3.15 g/t Au over 21.0 metres at Vindaloo zone
• 5.34 g/t Au over 7.2 metres at Vindaloo zone
• 0.46 g/t Au over 111.0 metres at Koho zone

Drill testing has the Vindaloo trend traced mineralization for at least 2,300 metres (see attached Figure) and is open to the north, south and to depth. Management believes it is also possible that the Vindaloo mineralized trend extends another 1,300 metres to the north where 1.86 g/t Au over 17.0 metres was intersected. Most of the gold-bearing mineralization is hosted by stockwork style, quartz-carbonate-epidote-fuchsite-pyrite altered gabbroic intrusions within a fragmental mafic volcanic rock package. Additional gold mineralization has also been noted in shears within the mafic volcanics with intercepts to 8.57 g/t Au over 8.0 metres. A summary of significant intercepts in attached at the end of the release.

John Begeman, President and CEO of Avion stated: "Management believes the results to date demonstrate an apparent clear path to increase the mineral resources at the Houndé Property with more drilling. As such, Avion has decided to double the Houndé exploration budget from US$3 million to US$6 million. This increase in funding has the potential, in management's opinion, to develop a significant gold mineral resource and provide sufficient support for the initiation of a Preliminary Economic Assessment study in the latter part of 2011."

In the initial drilling program, step-out holes were positioned every 100 to 200 metres along the Vindaloo mineralized trend. In addition, a series of parallel resistivity and resistivity anomalies were tested. To date, 79 holes have been completed with results returned for 41 of these holes. An additional 12,000 metres, are planned in 67 drill holes within the Vindaloo zone trend with the goal to upgrade and increase the existing mineral resources. To accomplish this task Avion has secured a second core drill, with which to accelerate the Vindaloo zone drilling. Delivery of the second drill is expected near the end of June.

A significant, but lower grade zone of gold mineralization (Koho zone – previously referred to as Vin East Zone), lies approximately 350 metres to the east of the Vindaloo zone. Holes that tested this zone in 2011 returned up to 0.46 g/t Au over 111.0 metres and 0.48 g/t Au over 21.0 metres. Previous holes returned up to 27.2 g/t Au over 2.0 metres and 2.19 g/t Au over 5.0 metres. Drill, soil and geophysical data suggest that this trend can be traced for at least 3.0 kilometres.

Avion also tested a known gold occurrence (Madras Zone) and geophysical resistivity anomaly located approximately 300 metres west of the Vindaloo trend. Avion's 2010 core hole returned an intercept of 2.53 g/t Au over 18.3 metres core length. The mineralization in this hole is hosted by a similar rock unit that hosts the Vindaloo zone. A previous intercept in this area returned 4.42 g/t Au over 12.0 metres core length. Six holes have been drilled in this area to not only trace the Madras zone and associated resistivity/conductivity anomaly, which is open along strike, but, to follow-up on a nearby intercept of 1.49 g/t Au over 12.0 metres on a parallel resistivity/conductivity high. Results are pending.

Don Dudek, Avion's Senior Vice President Exploration stated: "With the increased strike length of the Vindaloo zone, more drilling seems to be an obvious way to enhance the value of the project. Our next steps will be to first to drill at least two holes per every 100 metre section and then start in-fill holes at 50 metre intervals and to continue to trace the zone along strike. Our goal is to both define a material-size resource and to better define the size of the mineralized system that we are working on."

Don Dudek, P.Geo., the Senior Vice President, Exploration of the Company and a qualified person under National Instrument 43-101, has reviewed the scientific and technical information in this press release. 

Mining in Burkina Faso

The mining industry in Burkina Faso is growing at a rapid rate due to a combination of a stable elected democratic government, excellent geology and a competitive fiscal regime. Currently six gold mines are in production or development in Burkina Faso (Essakane – IAMGOLD Corporation, Mana - SEMAFO, Inata – Avocet Mining PLC, Youga - Etruscan Resources Inc., Taparko – High River Gold Mines Ltd., Kalsaka – Cluff Gold PLC). In 2011, it is expected that Burkina Faso will become the fourth largest gold producing country in Africa. The country has legislated low taxes, with an income tax rate of 20% and a corporate profits tax of 20% for mining companies. There is a three-year tax holiday that includes relief from VAT and custom duties during construction and reduced customs duties of 7.5% during mining operations. The government is entitled to a 10% free carried interest and a reasonable 3% Royalty on gold production.

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 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. 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, 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

The ability of Avion to increase production to 200,000 ounces of gold per year has not been the subject of a feasibility study and there is no certainty that the proposed expansion will be economically viable.

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 drilling results on the Company; statements with respect to the development potential and timetable of the Hounde project; the future price of gold; the estimation of mineral resources; conclusions of economic evaluation (including scoping studies); the realization of mineral resource 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.

Summary of New Significant Drill Holes Results*

To view the map associated with this release, please visit the following link: http://media3.marketwire.com/docs/avgcf0609map.pdf.