Avion Corporate Presentation, April 2010


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  • Production to dateIncreasing ouncesIncreasing gold grade and recovery
  • 3 main mineralization trendsNorth –south early along intrusions NE well defined – at least 5 features in pitLongest traced for 700 metresLikely a regional featureNW – less well defined – at least 12 features in pitBoth NE and NW structures display generally higher grades
  • Avion Corporate Presentation, April 2010

    1. 1. Company April 2010 Presentation AVR: TSX-V AVGCF: OTCQX New Gold Producer In Elephant Country
    2. 2. Forward-Looking Statement This press release contains forward-looking statements under Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the development potential and timetable of the Mali projects; the Company’s ability to raise additional funds as necessary; 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 statements 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 statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward- looking statements are based on the opinions and estimates of management as of the date such statements are made. Estimates regarding the anticipated timing, amount and cost of mining at the Mali projects are based on assumptions underlying mineral resource estimates and the realization of such estimates; results of previous mining activities at the projects, and detailed research and analysis completed by independent of the Company; research and estimates regarding the timing of delivery for long-lead items; knowledge regarding the factors consultants and management involved in building a mine and other factors that will be described in the technical report summarizing the scoping study that will be filed under the profile of the Company on SEDAR. Capital and operating cost estimates are based on results of previous mining activities, research of the Company and independent consultants, recent estimates of construction and mining costs and other factors that are set out in the scoping study. Production estimates are based on mine plans and production schedules, which have been developed by the Company’s personnel and independent consultants. Forward-looking statements are 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 statements, including but not limited to risks related to: timing and availability of external financing on acceptable terms; unexpected events and delays during construction, expansion and start-up; variations in ore grade and recovery rates; receipt and revocation of government approvals; actual results of exploration and mining activities; changes in project parameters as plans continue to be refined; future prices of gold; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements 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 statements. The Company does not undertake to update any forward-looking statements except in accordance with applicable securities laws. Investors are advised that National Instrument NI 43-101 of the Canadian Securities Administrators requires that each category of mineral reserves and mineral resources be reported separately. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated or Inferred Resources The information presented uses the terms “measured”, “indicated” and “inferred” mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize these terms. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable. 2
    3. 3. A Great Time To Buy Gold Shares…. 2 Gold Bull Markets – 2001 to present and 1968 to 1980 2000 1800 1600 1400 Relative Performance (Monthly) 1968-1980 1200 1000 800 Delivering gold into a bull market 600 400 200 2001 to present 0 3
    4. 4. Avion Properties – West Africa Focus 4
    5. 5. In a Good Neighbourhood Mali: Africa’s Third Largest Gold Producer 5
    6. 6. Strong Assets April 2010 Resource Base Updated – Mineral Resources* Tonnes Grade (g/t Au) Ounces (Au) Measured & Indicated (1 to 2 14,420,000 3.62 1,680,000 g/t Au Cut-off) Inferred (1 to 2 g/t Au Cut-off) 15,140,000 3.23 1,570,000 • The resource study was prepared by Milko Rivera, P.Eng., and Farshid Ghazanfari, GIT, with a third party review and initial open pit versus underground mining reviews carried out by Eugene Puritch, P.Eng., of P&E Mining Consultants Inc. Note that open pit mineral resources were calculated at a cut-off of 1.0 g/t Au and underground mineral resources were calculated using a 2.0 g/t cut-off. • Resource updated to include estimated mining drawdown, Great Quest Acquisition and recent Kofi Acquisition 6
    7. 7. Delivering Production Expansion into Gold’s Bull Market 51,000 ounces in 2009 75 – 85,000 ounces in 2010 (Forecast) Plan to ramp up to 200,000 ounces in 2012 Three major exploration packages 7
    8. 8. A Great Start Up – 51,000 oz. Produced In 2009 25000 1000 900 20000 800 700 15000 600 500 10000 400 Oz. Produced 300 Cost/Oz. 5000 200 100 0 0 2009 Production of 51,000 oz. 8
    9. 9. Production Growth Au Production estimates and Cash Costs Production (000 Au oz) Cash Cost (US$) 250 $550 Cash Costs 200 $500 150 $450 100 $400 50 $350 Au Production 0 $300 2009 2010 2011 2012 Segala (OP) Segala/Taba Tabakoto etc. Stockpile (UG) (OP) Mine plan presented in the scoping study prepared by M. Rivera, P. Eng, (independent) with the support of T, Mann, P.Eng. (independent) and Andrew Bradfield, P.Eng. (COO). Resource estimate prepared by Eugene Puritch and Antoine Yassa of P&E Mining Consultants. Using Canaccord Adams Research’s gold price forecast of US$900/oz in 2009, US$850/oz in 2010, US$800/oz in 2011 and US$750/oz in 2012, open pit and underground recoveries of 90% and 85%, respectively, UG equipment will be leased, UG mining by mechanized long hole retreat 9
    10. 10. Project Timeline 2010 2011 2012 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Anticipated project milestones 60,000 metre exploration program Update plant expansion study ◊ Gravity gold vs leach study ◊ Order plant long lead time equipment ◊ Order and construct gravity gold recovery plant (under review) Tabakoto underground development Fast-track two Tabakoto u/g devel. areas Update mineral resource statement ◊ Issue NI43-101 report with mine plan ◊ Plant expansion construction Segala underground development 200,000 oz/year gold production ◊ 10
    11. 11. Value Proposition How much is an ounce of gold? US $1169 (April 29, 2010) How much Did We Pay? US $7 Per Ounce 11
    12. 12. Strong Balance Sheet Debt 12
    13. 13. A Substantial Resource – and Growing TABAKOTO PROJECT RESOURCES (NI 43-101 compliant) Gold ounces (million) Measured & 1.4 Indicated* Inferred** 1.2 *Average Grade of Approximately 3.9 g/t ** Includes ounces from Great Quest 13
    14. 14. Low Cost Ounces in the Ground = LEVERAGE What Does the Market Pay? US $200 Per Total Resource Ounce What is Market Paying Avion? US $87 Per Ounce More Ounces to Come! Organic Growth – recent drilling Great Quest (324,000 oz.) Hounde Acquisition Kofi Acquisition (670,000 oz) 14
    15. 15. Avion Gold Corporation’s Capital Structure Exchange TSX Venture Ticker AVR Shares Outstanding – basic 300 million Fully diluted 357 million 52-Week High/Low $0.83- $0.25 Recent Price (April 29, 2010) $0.61 Market Capitalization ~183 million *Current Cash position of ~$10 Million 15
    16. 16. Strong Assets Large, Target-Rich Property with Central Milling Complex Approx. 132 km2 Mill – 2100 tpd Roads Tailings pond Dioulafoundou Power 21.77 g/t Au/21.0 m Fougala 1 Water 8.02 g/t Au/22.3 m 7.53 g/t Au/20.0 m 16
    17. 17. Strong Assets $US100M Assets Acquired for <$0.20 on the Dollar (2008) Camp – Houses 100 staff Milling Facility – 2,100 tpd Power Supply Fuel Supply – Contracted Current Segala Pit 17
    18. 18. Current Segala Main Pit Mining Avion is Mali’s 4th Largest Gold Company Segala Mine Plan 18
    19. 19. Resource Expansion Potential Four Target Concepts 1 Segala at depth – underground potential 2 Tabakoto at depth, and around pit 4 Approx. 132 km2 3 Remainder of property – numerous targets 4 4 New Properties 1 3 2 3 3 km 4 19
    20. 20. Target-Rich Exploration Package (~500 km2) 10 km  75% of drill holes have intersected gold!  $10 Million Exploration Budget for 2010  Total Project (Avion + Great Quest+Kofi) Resource 3.65 M ozs* * At 0.5 g/t cut-off 20
    21. 21. Hounde – Burkina Faso 21
    22. 22. Comparable Trading Multiples Avion is significantly undervalued relative to its peer group based on cash flow and P/NAV multiples P / CFPS P / NAV1 1.4x 9.9x 9.1x 0.9x 3.2x 2.1x 2010 2011 P/NAV Avion Producer Peers Avion Producer Peers 1. NAVPS uses 5% discount rate and long-term metal prices of US$850/oz Au and US$15.50/oz Ag Note: Producer Peers include Alamos Gold, Aura Minerals, Centamin Egypt, Gammon Gold, Gold Wheaton, Golden Star Resources, New Gold, Northgate Minerals and Red Back Mining Source: Canaccord Adams Research and public market research (updated March 11, 2010)
    23. 23. Low valuation compared to peers $2,000 $1,750 GAM Market Capitalization (US$mm) $1,500 AGI NGD EGU Average $1,250 SGR NXG GSS ANV SMF $1,000 ARZ $750 MFL KGI $500 BTO $250 Avion Gold $- 0 100 200 300 400 500 600 2010E Production (000's oz Au)
    24. 24. AVION GOLD CORPORATION MAJOR SHAREHOLDERS  Sprott Asset Management (14%)  Pinetree Capital (7%)  Maple Leaf Partners (5%)  Front Street (3%)  Aberdeen International (3%)  Management/Insiders ~2% 24
    25. 25. Analyst Coverage Wellington West: Canaccord Capital Markets: 25
    26. 26. Experienced Management Team & Board MANAGEMENT John Begeman, President, CEO and Director Don Dudek, Senior VP Exploration and Director Greg Duras, CFO Andrew Bradfield, Chief Operating Officer Chris Bradbrook, M.Sc. VP Strategic Development BOARD OF DIRECTORS Stan Bharti – Executive Chairman John Begeman Bruce Humphrey Lewis Mackenzie, Major General (Ret.) Don Dudek Honorable Pierre Pettigrew 26
    27. 27. AVION GOLD CORPORATION Contact: John Begeman 65 Queen Street West #800 President & CEO PO Box 67 Tel: (416) 861-5884 Toronto, ON M5H 2M5 info@aviongoldcorp.com www.aviongoldcorp.com 27