avion gold corp
TRANSCRIPT
Company PresentationNovember 2009
New Gold Producer in West Africa with Exploration Upside
Forward-Looking Statement
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This press release contains forward-looking statements under Canadian securities legislation. Forward-looking statements include, but arenot limited to, statements with respect to the development potential and timetable of the Mali projects; the Company’s ability to raiseadditional funds as necessary; the future price of gold; the estimation of mineral resources; conclusions of economic evaluation (includingscoping studies); the realization of mineral resource estimates; the timing and amount of estimated future production, development andexploration; 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 canbe 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 orstatements 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. Estimatesregarding the anticipated timing, amount and cost of mining at the Mali projects are based on assumptions underlying mineral resourceestimates and the realization of such estimates; results of previous mining activities at the projects, and detailed research and analysiscompleted by independent of the Company; research and estimates regarding the timing of delivery for long-lead items; knowledgeregarding the factors consultants and management involved in building a mine and other factors that will be described in the technicalreport summarizing the scoping study that will be filed under the profile of the Company on SEDAR. Capital and operating cost estimatesare based on results of previous mining activities, research of the Company and independent consultants, recent estimates of constructionand mining costs and other factors that are set out in the scoping study. Production estimates are based on mine plans and productionschedules, which have been developed by the Company’s personnel and independent consultants. Forward-looking statements are subjectto known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance orachievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including butnot limited to risks related to: timing and availability of external financing on acceptable terms; unexpected events and delays duringconstruction, expansion and start-up; variations in ore grade and recovery rates; receipt and revocation of government approvals; actualresults of exploration and mining activities; changes in project parameters as plans continue to be refined; future prices of gold; failure ofplant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry. Althoughmanagement of the Company has attempted to identify important factors that could cause actual results to differ materially from thosecontained 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 fromthose anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Companydoes 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 mineralreserves and mineral resources be reported separately. Mineral resources that are not mineral reserves do not have demonstratedeconomic viability.
Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated or Inferred ResourcesThe information presented uses the terms “measured”, “indicated” and “inferred” mineral resources. United States investors are advisedthat while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission doesnot recognize these terms. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and as to their economicand 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 Statesinvestors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineralreserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or iseconomically or legally mineable.
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In a Good Neighbourhood
Mali: Africa’s Third Largest Gold Producer
MALI
Anglogold Ashanti / IAMGOLD’sSadiola Mine produces
445,000 oz of gold per year
Randgold’s Loulo Mine produces
270,000 oz of gold per year
2.8 M oz.
35 M oz of
Resources in Western
Mali Gold Belt
Strong Assets
Large, Target-Rich Property with Central Milling Complex
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3 km
Approx. 100 km2
Mill
Roads
Tailings pond
Power
Water
Strong Assets
$US100M Assets Acquired for <$0.20 on the Dollar (2008)
Milling Facility – 2,100 tpd
Fuel Supply – Contracted
Camp – Houses 100 staff
Power Supply
Tabakoto Pit – 300 days water supply
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Segala Blast
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Current Segala Main Pit Mining
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Segala Mine Plan
Acquired a previous producer for a substantial discount
Completed >30,000 metres exploration drilling
Developed a new mine plan and commenced production mid-February, 2009
– Targeting 50,000 ounces Au @ US$ 550/oz op cost in 2009
Completed new technical reports – reported increase in mineral resources
– M&I to 1.2 million ounces @ 3.48 g/t Au
– Inferred to 1.14 Million ounces @ 3.5 g/t Au
Initiated studies to support a longer term mine plan with underground mining studies in progress including possible mill expansion, efficiency improvements and heap leach testing
Continued to invest in project with over 30,000 m of exploration drilling
Finalized a deal to acquire 75% of a 324,000 oz Au resource
Demonstrated to the market that Avion can produce in excess of 6,000 ozsof gold per month - 20,000 oz. Forecast for Q4
Achievements
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Strong Assets
May 2009 Resource Base
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Updated – Mineral Resources*
Tonnes Grade (g/t Au) Ounces (Au)
Measured & Indicated (1 to 2 g/t Au Cut-off)
10,820,000 3.48 1,211,300
Inferred (1 to 2 g/t Au Cut-off)11,920,500 3.57 1,383,000
Mineral Resources 0.5 g/t cut-off
Tonnes Grade (g/t Au) Ounces (Au)
Measured & Indicated 18,440,000 2.55 1,510,000
Inferred 17,680,000 2.58 1,467,000
* The resource study was prepared by Milko Rivera, P.Eng., and Farshid Ghazanfari, GIT, with a third party review and initial open pit versusunderground mining reviews carried out by Eugene Puritch, P.Eng., of P&E Mining Consultants Inc. Note that open pit mineral resourceswere 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.
New Player
Avion Gold Corporation’s Capital Structure
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Exchange TSX Venture
Ticker AVR
Shares Outstanding – basic
Fully diluted
221 million
269 million
52-Week High/Low $0.50 - $0.04
Recent Price (Nov. 13, 2009) $0.45
Market Capitalization ~$100 million
Avion Share Price Graph
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The Avion Advantage
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1. A new, well funded player
2. Good neighbourhood
3. Strong asset base
Emerging,
high growth
regional consolidator
4. Attractive growth profile
Attractive Growth Profile
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Timing is ideal– Producing since February 16th , 2009
– Target to produce 50,000 ozs in 2009 @ <US$540/oz cash cost
– Current run-rate of over 7,000 ozs/month
No debt & no hedging
Five year tax exoneration period for Segala
Significant production growth (Forecast to move to 200,000 ozs/year) – with limited capex
Outstanding reserve and resource growth potentialLarge land position
West African consolidatorCompleted acquisition of Dynamite Resources
Great Quest deal completed
Acquired 16% of Midlands Minerals
Agenda
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The opportunity
The company
The growth plan
The execution
Resource Expansion Potential
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Four Target Concepts
3 km
Approx. 100 km2
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2
1
2
3
Segala at depth – underground potential
Tabakoto at depth, and around pit
Remainder of property– numerous targets
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3
4 New Properties
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4
4
Segala at Depth/Along Strike
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Plan View
Section Looking North
Target Area
Target Area
Target Area
Target Area
Target Area
Target Area
-400m
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Segala Main 2009 Drilling
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4.90 g/t Au/13.8 m
4.55 g/t Au/22.0 m
4.89 g/t Au/26.7 m12.49 g/t Au/24.4 m
28.67 g/t Au/15.9 m
108.68 g/t Au/2.0 m22.86 g/t Au/48.0 m
5.01 g/t Au/34.0 m
2. Expansion Potential Around Tabakoto Pit
3 km
3. Target-Rich Exploration Property (100 km2)
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75% of drill holes have intersected gold!
Segala Deposit
Tabakoto Mine
Dioulafoundou
Fougala
8.51 g/t Au/10.5m
3.88 g/t Au/49.3m
2.72 g/t Au/73.5m
7.41 g/t Au/11.5m
11.6 g/t Au/13.8m
15.27 g/t Au/3.7m
67.08 g/t Au/4.0m
13.56 g/t Au/22.5m
Dar Salam
15.56 g/t Au/24.0m
10.96 g/t Au/6.0m
Great Quest Property
1.33 g/t Au/40.0m
Great Quest Option
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Great Quest Option: Djambaye 2A Zone – Long Section – Looking West
900 m
Agenda
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The opportunity
The company
The growth plan
The execution
Production to end of October, 2009
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MALI
Milled
Month Tonnes Grade Recovery Ounces
February 15400 2.17 94.9 1156
March 60624 2.88 92.7 5201
April 54333 1.82 89.5 2848
May 67601 1.6 94 3281
June 60652 2.57 96.9 4865
July 51151 2.35 93.7 3623
August 51807 3.54 96.3 5680
Sept 22111 4.64 97.6 3215
October 51,754 3.90 96.8 5279**
TOTAL 35,148 ozs
** Without weather disruption October ~7,500 ozs
20,000 oz. forecast for Q4
2008 2009 2010
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Project Timeline
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Tabakoto and Segala Gold Projects
Acquisition
Production Start
Achieve/Sustain commercial production
Technical Reports
Historic NI 43 - 101 Technical Report
Updated Resource Estimates for Segala and Tabakoto
Resource Estimate for Tabakoto Cross Structures
Resource Estimate for Dar Salam
Resource Estimate for Dioulafoundou
Exploration Program
Segala / Tabakoto Drilling
Regional Exploration
Verification of ROM Pad Stockpile and Tailings Grades
Ground magnetic surveys
Leach Test Work on Segala
Production Growth Studies
Potential capacity upgrade completed by 2010 year end
Merger and Acquisition reviews
Why Invest in Avion Resources?
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Emerging W. AfricanConsolidator
Attractivegrowth profile
Unknown and Undervalued
New producer– into bull market
Favourablegold dynamics
Consolidatorsperform best
MALI
No Debt
Strong Board of Directors
Stan Bharti, Executive Chairman
Mr. Bharti is a professional engineer and is currently the President of Forbes & Manhattan, Inc., a private merchant bank operatingin Canada, the United States and Western Europe. From February 2002 to April 2006, he was Chairman and a director of DesertSun Mining Corp., a Toronto Stock Exchange-listed mining company which was acquired by Yamana Gold Inc. He has over 25 yearsof experience in operations, public markets and finance. Mr. Bharti is also a director of several public and private companies.
Bruce Humphrey, Director
Mr. Humphrey brings a lifetime of mining industry experience, including having served as a former Chief Operating Officer atGoldcorp Inc. and most recently as President and Chief Executive Officer of Desert Sun Mining Corp. prior to its sale to YamanaGold Inc.
John Begeman, President, CEO and Director
Mr Begeman is a mining engineer with over 30 years of mining experience. He is currently the Chief Executive Officer of ValenciaVentures Inc. and was recently the Operating Officer of Zinifex Canada Inc. He has previously served as Vice President, WesternOperations of Goldcorp Inc. where Mr. Begeman ran the Wharf Mine open-pit, a consistent low-cost producer
Lewis Mackenzie, Major General (ret'd), Director
General MacKenzie is a distinguished Canadian that retired from the Canadian Forces in 1993 after 36 years of service. One of hismany accomplishments includes commanding Sector Sarajevo, Yugoslavia, under the United Nations Protection Force in 1992.
General MacKenzie brings a variety of skills to the board reflective of the breadth of his experience in the Canadian Forces and inhis role on numerous boards and advisory assignments since his retirement.
Gerald McCarvill, Director
Gerald McCarvill has more than 20 years experience in the financial sector holding senior positions with major investment firmsincluding as a member of the executive committee of Wood Gundy. Most recently, Mr. McCarvill was CEO of McCarvill Corporation, adiversified financial services company and previously was CEO of Repadre Capital Corporation, a mining royalty company.
Don Dudek, Senior VP Exploration and DirectorMr. Dudek has held increasingly senior roles with junior to senior exploration and mining companies over the past 25 years. Mostrecently Mr. Dudek served as Exploration Manager for Aur Resources Inc. which provided him the opportunity to evaluate 100’s ofgrass roots to advanced projects in Latin America and Africa. During his career Mr. Dudek was part of the team that discovered 7new base and precious metal deposits in Canada, one of which has been mined. He also supervised work at Teck Cominco’s highprofile La Verde Cu-porphyry deposit in Mexico. Mr. Dudek holds a B.Sc. Geology (honors) from the University of Saskatchewan.
Honorable Pierre Pettigrew, Director
The Honorable Pierre S. Pettigrew has had a most distinguished career as a Canadian federal cabinet minister, serving as Minister ofForeign Affairs and Minister for International Trade in his last positions in public office. Mr. Pierre Pettigrew also served as Ministerof Health, Minister of Intergovernmental Affairs, Minister of Human Resources Development and Minister of InternationalCooperation. As a cabinet minister, he chaired numerous working groups on difficult international trade issues and lead trademissions to China, India, Russia, Germany, Algeria, Morocco, South Africa, Nigeria, Mexico, and other countries. From 1985 to 1995,he was an International Business Consultant with Deloitte. 26
Experienced Management Team
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John Begeman, President, CEO and Director (see “Board of Directors”)
Rene Bharti, VP Corporate DevelopmentMr. Bharti has held roles in several public and private companies, including those in the resource, technology, andentertainment sectors. Previously, Mr. Bharti also served as Vice President of Business Development for a publicly listedresource company with gold assets in the former Soviet Union. Mr. Bharti holds a Bachelor of Commerce (Honors) degreefrom Queen’s University.
Don Dudek, Senior VP Exploration and Director (see “Board of Directors”)
Greg Duras, CFOMr. Duras joined Avion Resources Corp. in May 2008, bringing with him more than a decade of corporate and project financeexperience in the resource sector. Prior to assuming this role, he held the position of Vice President of Finance andAdministration at S.C. Rosia Montana Gold Corporation S.A. (RMGC), a mineral exploration and mining development companybased in Romania with responsibility for financial reporting, project financing, taxation, auditing and budgeting activities. Priorto RMGC, Mr. Duras held a number of senior finance roles, including Controller of TSX-listed Gabriel Resources Ltd. and HighRiver Gold Mines Ltd. Mr. Duras is a Certified General Accountant and a Certified Professional Accountant, and holds aBachelor of Administration from Lakehead University.
Andrew Bradfield, Chief Operating OfficerAndrew Bradfield has over 26 years of operations, technical, and management experience in the mineral resource industry.He has held positions at mines in Australia, Canada, China, Ethiopia, the Philippines, South Africa and Sweden. His experienceincludes start-up, development, operations, as well as technical and financial evaluations. Mr. Bradfield was most recently VP,Operations for TVI Pacific. Prior to joining TVI, he was the Chief Operating Officer for a mining and exploration company,which operates a diamond mine, and explores for diamonds and gold in China. He holds a Bachelor of Science (B.Sc. withhonours) in Mining Engineering from Queen’s University, Canada.
Chris Bradbrook, M.Sc. VP Strategic Development30 years experience in Mining and Financial Industries. Demonstrated skills in development, management and growth ofjunior mining companies through application of strong financing, strategic and marketing skills. Founder of New Gold Inc., forwhich he raised $500 million. Former Vice President, Corporate Development for Goldcorp Inc. during company's mostexplosive growth phase.
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Contact:
Rene Bharti
VP Corporate Development
Tel: (416) 861-5913
Don Dudek, P.Geo, the Senior Vice President, Exploration of the Company and qualified person under National Instrument 43-101, has reviewed the scientific and technical information in this presentation