April 2010 New Gold Producer In Elephant Country Company Presentation AVR: TSX-V AVGCF: OTCQX
April 2010
New Gold Producer In Elephant Country
Company
PresentationAVR: TSX-V
AVGCF: OTCQX
Forward-Looking Statement
2
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.
A Great Time To Buy Gold Shares….
3
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2 Gold Bull Markets – 2001 to present and 1968 to 1980
Relative Performance (Monthly)
2001 to present
1968-1980
Delivering gold into a bull market
Avion Properties – West Africa Focus
4
5
In a Good Neighbourhood
Mali: Africa’s Third Largest Gold Producer
Strong Assets
April 2010 Resource Base
6
Updated – Mineral Resources*
Tonnes Grade (g/t Au) Ounces (Au)
Measured & Indicated (1 to 2 g/t Au Cut-off)
14,420,000 3.62 1,680,000
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 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.
• Resource updated to include estimated mining drawdown, Great Quest Acquisition and recent Kofi Acquisition
Delivering Production Expansion into Gold’s Bull Market
7
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
A Great Start Up –51,000 oz. Produced In 2009
8
2009 Production of 51,000 oz.
01002003004005006007008009001000
0
5000
10000
15000
20000
25000
Oz. Produced
Cost/Oz.
Production Growth
9
Mine plan presented in the scoping study prepared by M. Rivera, P. Eng, (independent) with the support of T, Mann, P.Eng. (independent) andAndrew Bradfield, P.Eng. (COO). Resource estimate prepared by Eugene Puritch and Antoine Yassa of P&E Mining Consultants. Using CanaccordAdams Research’s gold price forecast of US$900/oz in 2009, US$850/oz in 2010, US$800/oz in 2011 and US$750/oz in 2012, open pit andunderground recoveries of 90% and 85%, respectively, UG equipment will be leased, UG mining by mechanized long hole retreat
Production (000 Au oz) Cash Cost (US$)
Au Production estimates and Cash Costs
$300
$350
$400
$450
$500
$550
0
50
100
150
200
250
2009 2010 2011 2012
Cash Costs
Au Production
Segala (OP) Segala/Taba(UG)
Tabakoto etc.(OP)
Stockpile
Project Timeline
10
2010 2011 2012
Anticipated project milestones Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
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 ◊
How much is an ounce of gold?
Value Proposition
11
US $1169 (April 29, 2010)
How much Did We Pay?
US $7 Per Ounce
Strong Balance Sheet
12
Debt
A Substantial Resource – and Growing
13
TABAKOTO PROJECTRESOURCES (NI 43-101 compliant)
Goldounces
(million)
Measured & Indicated*
1.4
Inferred**1.2
*Average Grade of Approximately 3.9 g/t
** Includes ounces from Great Quest
Low Cost Ounces in the Ground = LEVERAGE
14
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)
Avion Gold Corporation’s Capital Structure
15
Exchange TSX Venture
Ticker AVR
Shares Outstanding – basic
Fully diluted
300 million
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
Strong Assets
Large, Target-Rich Property with Central Milling Complex
16
Approx. 132 km2
Mill – 2100 tpd
Roads
Tailings pond
Power
WaterFougala 1
8.02 g/t Au/22.3 m
Dioulafoundou21.77 g/t Au/21.0 m
7.53 g/t Au/20.0 m
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
17
Current Segala Pit
Current Segala Main Pit Mining
Avion is Mali’s 4th Largest Gold Company
18
Segala Mine Plan
Resource Expansion Potential
19
Four Target Concepts
3 km
Approx. 132 km2
1
2
1
2
3
Segala at depth – underground potential
Tabakoto at depth, and around pit
Remainder of property– numerous targets
3
3
4 New Properties
4
4
4
Target-Rich Exploration Package (~500 km2)
20
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
10 km
21
Hounde – Burkina Faso
Comparable Trading Multiples
P / CFPS
1. NAVPS uses 5% discount rate and long-term metal prices of US$850/oz Au and US$15.50/oz AgNote: Producer Peers include Alamos Gold, Aura Minerals, Centamin Egypt, Gammon Gold, Gold Wheaton, Golden Star Resources, New Gold, Northgate Minerals and Red
Back MiningSource: Canaccord Adams Research and public market research (updated March 11, 2010)
Avion is significantly undervalued relative to its peer group based on cash flow and P/NAV multiples
3.2x
2.1x
9.1x
9.9x
2010 2011
Avion Producer Peers
0.9x
1.4x
P/NAV
Avion Producer Peers
P / NAV1
Low valuation compared to peers
Avion Gold
Average
BTO
ANVSGR NXG GSS
MFL
SMF
NGD
KGI
EGU
ARZ
AGI
GAM
$-
$250
$500
$750
$1,000
$1,250
$1,500
$1,750
$2,000
0 100 200 300 400 500 600
2010E Production (000's oz Au)
Ma
rke
t C
ap
ita
liza
tio
n (
US
$m
m)
AVION GOLD CORPORATION
24
MAJOR SHAREHOLDERS
Sprott Asset Management (14%)
Pinetree Capital (7%)
Maple Leaf Partners (5%)
Front Street (3%)
Aberdeen International (3%)
Management/Insiders ~2%
Analyst Coverage
25
Wellington West:
Canaccord Capital Markets:
Experienced Management Team & Board
26
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
27
Contact:
John Begeman 65 Queen Street West #800
President & CEO PO Box 67
Tel: (416) 861-5884 Toronto, ON M5H 2M5
[email protected] www.aviongoldcorp.com
AVION GOLD CORPORATION