Vancouver, British Columbia, July 13, 2012 - Investment firm Canaccord Genuity has reiterated its buy recommendation for Avion Gold (TSX:AVR) (OTCQX:AVGCF). Analyst Steven Butler maintains his buy rating and target price of $1.75, a premium of 250% above today's price of $0.50.
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Avion is a Canadian-based gold mining company focused in West Africa, where the company holds 80% of the Tabakoto and Segala gold projects in Mali.
The Canaccord report follows the announcement of increased production guidance, and news that a planned mill expansion is back on the table.
Despite the recent coup in Mali, operations at Tabakoto have been progressing with minimal disruption. The political situation appears to have mostly stabilized in the southern part of Mali, where Tabakoto is located, as a result of which the Canadian government has lowered its travel warning advisory by one level.
On July 9th, the company reported record second quarter production of approximately 28,600 ounces of gold from its Tabakoto operation. Management believes the company is well on its way to achieving its upgraded production guidance of 95,000 to 102,000 ounces of gold for 2012. During the second quarter of 2012, the company milled 191,500 tonnes of ore at an average grade of 5.05 grams per tonne, with a 92.5% mill recovery. As at January 1st, the company had a mineral reserve estimate of 6.91 million tonnes grading 3.73 grams per tonne gold totalling 187,100 ounces of gold in the proven and probable categories, for the Tabakoto project property.
Avion's COO, Andrew Bradfield comment, "The Tabakoto Mine has had two consecutive record production quarters that were achieved despite a military coup in the first quarter of 2012, and subsequent destabilization of the Malian government. The Tabakoto underground mine continues to produce higher than expected ore grades with a lower amount of ore dilution at higher processing recoveries than planned, that when combined with good open pit grades resulted in an excellent quarter."
Considering the improvement in the situation, management has indicated that the temporarily suspended mill expansion is anticipated to resume in late 2012 or early 2013, with all parts and supplies required to complete the expansion now at to the site.
Steven Butler stated "In our view, continued strong operating results from Tabakoto are a testament to the team's ability to successfully operate even in difficult environments. We believe the announcement by the company should reassure investors regarding mill expansion timelines and the Mali situation in general."
For more information about Avion Gold, please visit the company's website www.aviongoldcorp.com (http://www.aviongoldcorp.com), or contact Michael McAllister at 416-309-2134 or email info@aviongoldcorp.com (mailto:info@aviongoldcorp.com).
For a copy of Canaccord Genuity's research, contact your nearest Canaccord Genuity office, which are listed on their website at www.canaccord.com.
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