Kofi results encourage Avion Gold

Drill results from the C zone of the Kofi property in Mali, West Africa show “excellent potential” for Avion Gold (AVR-T, AVGCF-O) to define a “near-surface, high grade, mineable gold deposit” says the company’s senior vice president of exploration, Don Dudek.

And Avion has discovered another near-surface pocket of gold mineralization about 5.3 km northeast of the Kofi C zone called the Bassindi Zone, which the company says underscores the prospectivity of the property.

The Kofi property wraps around the north side of Randgold Resource‘s (GOLD-Q, RRS-L) Loulo mine concessions.

Drill results from the final 94 drill holes (13,936 metres) completed at Kofi this year–mainly in the C Zone–include intercepts such as 7.52 grams gold over 40.8 metres and 11.61 grams gold over 21.3 metres in hole C-11-18; 8.37 grams gold over 14 metres in hole C-11-20, and 7.57 grams over 2 metres and 11.61 grams gold over 19.2 metres in hole C-11-21. The new Bassindi zone returned an intercept of 4.6 grams gold over 12 metres. 

Canaccord Genuity has a buy rating on Avion Gold and believes it is among the five most undervalued gold stocks based on potential return to the best-fit line (share price vs. spot gold).

Drilling at the Kofi C zone area has defined 10 mineralized zones over a 700 metre by 200 metre area to a maximum depth of 275 metres. 

Most of the zones are open along strike and to depth with zones only tested from 60 to 275 metres below surface.

The Kofi property is roughly a 470 square km property package situated at its nearest point within about 5 km to the northwest of Avion’s Tabakoto mine, which started producing gold in 2009. 

All of the zones at Kofi are within 15 to 38 km of Tabakoto’s mine infrastructure, placing the zones including the estimated mineral resources within trucking distance of the Tabakoto mill.

Avion plans to update its resource estimate for the Kofi project before the end of the year and to start drilling again in early 2012.

Drilling in 2011 was focused in and around the Kofi C zone, which contains an historic National Instrument 43-101 estimated indicated resource of 873,000 tonnes grading 3.6 grams gold per tonne for 99,000 ounces of contained gold and an inferred  resource of 913,000 tonnes at 3.7 grams gold for 109,000 ounces gold.  

The Kofi C zone lies within a north-northeast trending structural corridor that is at least 40 km long by 5 km wide. This corridor contains at least nineteen deposits and zones that have been discovered, fifteen of which are on the adjacent Randgold property. A clear break, defined by the airborne geophysical conductivity data, suggests that this trend continues onto the Kofi property for at least 19 km.

In Toronto at presstime Avion was trading at $1.66 within a 52-week trading range of $1.26-$2.57. The junior has about 440 million shares outstanding.