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Avion Gold loses $545,740 (U.S.) in Q1

2010-05-20 09:35 ET - News Release

Mr. John Begeman reports

AVION ANNOUNCES FIRST QUARTER 2010 FINANCIAL RESULTS

Avion Gold Corp. has released its financial results for the first quarter of 2010.

Commenting on the first-quarter results of 2010, Avion's president and chief executive officer, John Begeman, stated, "The first quarter presented the company with some unforeseen challenges and I am extremely proud of the efforts of our team in resolving them such that we can look forward to meeting our production guidance, for 2010, of 75,000 to 85,000 ounces."

Complete interim financial statements and related management's discussion and analysis are filed under Avion Gold's profile on SEDAR. All amounts are in United States dollars unless otherwise indicated. Key summary:

* For the first quarter, the company produced approximately 15,716 ounces at a cash cost per ounce of $886. The cash costs were negatively affected by a previously announced slump in the Segala pit which delayed access to the planned higher-grade ore. This situation was temporary and has now been rectified. Avion Gold is forecasting substantially lower costs for the rest of the year and anticipates averaging $650 per ounce for the remaining three quarters of the year. Cash costs do not include royalties.
* During the first quarter, the company sold 17,298 ounces of gold at an average realized price of $1,123 per ounce, higher than the average London fix $1,109 over the period.
* Avion Gold had a net loss of $545,740 (zero cent per share, diluted) for the quarter ended March 31, 2010, compared with a net loss of $1,241,360 (loss of one cent per share) for the quarter ended March 31, 2009.
* Gold revenue for the first quarter ended March 31, 2010, was $19.4-million compared with nil for the comparable quarter last year.
* Operating cash flow before the working capital adjustment for the first quarter ended March 31, 2010, was $5.6-million.
* Net working capital as at March 31, 2009, was $20.5-million (including cash and cash equivalents of $8.3-million).
* Avion announced a 100-per-cent increase in the measured and indicated resources and a 38-per-cent increase in grade in the Segala Main deposit.

Andrew Bradfield, PEng, the chief operating officer of the company and a qualified person under National Instrument 43-101, has reviewed the scientific and technical information in this press release.

We seek Safe Harbor.