AVR Avaron Mining Corp

Avion Gold Corporation (TSX: AVR)(OTCQX: AVGCF) ("Avion" or the "Company") today announces its financial results for the first quarter ended March 31, 2011. All amounts are in United States dollars unless otherwise indicated.

Avion plans to host a conference call at 10:30 AM (EST) on June 2, 2011. To participate in the call please dial:

International:                           +1 416 340 9432
Toll Free North America:                 877 440 9795
Toronto Area:                            416 340 9432

A play-back recording will be available shortly after the completion of the call on Avion's website at www.aviongoldcorp.com.

Complete audited financial statements and related Management's Discussion and Analysis will be available under the Company's profile on www.sedar.com before the market opens on June 2, 2011.

First Quarter Highlights:

--  The Company had earnings of $8.3 million, or $0.02 per share for the
    quarter as compared to $0.7 million in earnings, or $0.00 per share for
    the comparable quarter last year.

--  The Company produced 20,270 ounces of gold at a cash cost per ounce of
    $462 and total cash costs produced of $534. The Company continues to
    generate significant cash flow from its operations with $15.4 million
    generated this quarter as compared to $1.9 million for the comparable
    quarter last year. The Company generated cash flow of approximately $762
    per ounce of gold produced. Please see Non-GAAP measures below.

--  Before share based compensation, the Company had earnings of $11.8
    million, or $0.03 per share for the quarter as compared to $3.0 million
    in earnings, or $0.01 per share for the comparable quarter last year.

--  The Company achieved revenues of $27.5 million this quarter compared to
    revenues of $19.5 million for the comparable quarter last year
    representing a 29% increase.

--  During the quarter, the Company's gold sales at an average realized
    price of $1,394 per ounce, which was $8 higher than the London PM fix
    average for the quarter ended March 31, 2011.

--  During the quarter the Company expended $38.6 million on its extensive
    capital programs including underground development, mill plant expansion
    activities and exploration. These capital programs continue to proceed
    on time and on schedule.

--  The Company completed the quarter with a strong balance sheet having
    $24.4 million in working capital, which included $ 19.1 million in cash
    and cash equivalents, as at March 31, 2011.

--  In May 2011 the Company completed a $35 million credit facility through
    Atlantic Financial Group which is available for a three year term with
    an annual interest rate of 7% and no hedging requirements, as is
    normally requested by lenders.

Commenting on the first quarter 2011 results, Avion's Chief Financial Officer, Mr. Gregory Duras stated: "The Company generated strong earnings this quarter, resulting in significant operating cash flow, allowing the Company to maintain a strong financial position to sustain its extensive capital programs, including underground development, plant expansion and an aggressive exploration program. Our capital program will position us well for continued growth".

Capital Expansion Programs

Expansion plans continued at Tabakoto, consisting of the following activities:

--  1,332 metres of underground development was completed at the Tabakoto
    deposit, plus a ventilation raise. Over 13,000 tonnes of development ore
    was mined from various zones within the deposit. Development remains on
    plan to enable production in the 1st quarter of 2012.

--  Over 1.87 million tonnes of oxide waste material was mined at the
    Dioulafoundou deposit, and over 46,000 tonnes of ore was mined during
    Q1-2011. By the end of the quarter, the waste pre-stripping program was
    completed, allowing access to ore in the future at a reduced strip
    ratio.

--  Purchase orders and down payments were submitted to vendors for the
    remaining long lead time equipment required for the planned plant
    expansion to 4,000 tonnes per day in 2012. The project remained on
    schedule and within budget.

Financial Discussion: three months ended March 31, 2011

The Company reported net income of $8,271,205 ($0.02 per share, basic and diluted) for the three months ended March 31, 2011 compared to $663,279 ($0.00 per share, basic and diluted) for the three months ended March 31, 2010.

During Q1-2011, the Company sold 22,583 ounces of gold and generated $27,494,390 in gold sales revenue. In Q1-2010, 17,298 ounces of gold was sold generating $19,466,619 in gold sales revenue. Mining and processing costs were $13,017,240 (Q1-2010: $11,409,242), which includes $385,304 (Q1-2010: $191,150) in amortized deferred stripping costs, and the Company recorded amortization and depletion of $1,560,056 (Q1-2010: $1,407,716). The Company is amortizing deferred property, plant and equipment related to the Mali projects on a unit of production basis from the current mine plan. The Company was subject to a 6% royalty on metal sales during Q1-2011. Royalties expense totaled $1,473,593 (Q1-2010: $1,358,440) for the ounces of gold sold during Q1-2011. The Company previously bought out an aggregate 3% royalty in late 2009 and 2010 for a combined $3,000,000 in cash, shares and warrants valued at $1,107,116. These amounts have been deferred and will be amortized over the life of the mine.

The Company realized a cash cost per ounce produced of $462 per ounce for Q1-2011 compared to $886 for Q1-2010. Please see "Non-GAAP Measures" below.

Corporate and administrative expenses for the quarter ended March 31, 2011 totaled $1,067,176 compared to $711,958 for Q1-2010. This moderate increase in corporate and administrative expenses reflects the increased level of activities of the Company, increased executive travel requirements, and higher expenses associated with a TSX listing. The Company continues to share office space and other resources with companies that have common directors and officers.

Non-cash share based compensation expense for Q1-2011 was $3,479,773 (Q1-2010: $2,382,567) related to the estimated fair value of stock options that were granted and vested during Q1-2011. A total of 4,455,000 stock options were granted during Q1-2011 compared to 3,905,000 during Q1-2010. Share based compensation was estimated using the Black-Scholes option pricing model as at the date of grant.

During Q1-2011, the Company incurred a non-cash accretion expense of $61,750 related to the Company's asset retirement obligations acquired through the acquisition of the Mali projects (Q1-2010: $55,500).

The Company recognized a nominal unrealized loss of $10,916 during Q1-2011 (Q1-2010: an unrealized loss of $711,958) related to their held-for-trading investments based on the fair market value of these investments as at March 31, 2011.

The Company also incurred a foreign exchange translation gain of $1,477,095 during Q1-2011 compared to a loss of $309,349 during Q1-2010. The Mali franc, which is pegged to the Euro, strengthened compared to the US dollar during the quarter and a large proportion of the Company's net monetary assets are carried in Mali franc.

Andrew Bradfield, P.Eng., 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.

About Avion Gold Corporation

Avion is a Canadian-based gold mining company focused in West Africa that holds 80% of the Tabakoto and Segala gold projects in Mali. Gold production commenced at these projects in 2009 with just over 51,000 ounces produced. 2010 production was 87,630 ounces of gold. Production sustainability will continue to be supported and enhanced by an aggressive 2011 drill program over an approximately 600 km2 exploration package that both surrounds and is near to the Company's existing mine infrastructure. The current mineral resources estimate for the Tabakoto project demonstrates several sources of excellent grade open pit and good grade underground mineral resources thus providing significant flexibility for Avion's future mining plans. Additionally, the 1,670 km2 Hounde exploration property in Burkina Faso continues to return promising results. These properties will be subject to a preliminary US$ 10 million dollar, approximate 60,000 metre, drill-focused, exploration program in 2011. Avion continues to progress towards its medium term goal of 200,000 ounces of gold per year and a longer term goal of organic growth through development of its exploration properties. The Company is developing an underground mine at the Tabakoto deposit, and is preparing to mine underground at the Segala deposit. Avion has a highly skilled management team, with a focus on growth and consolidation within West Africa.

Cautionary Notes

The ability of Avion to increase production to 200,000 ounces of gold per year has not been the subject of a feasibility study and there is no certainty that the proposed expansion will be economically viable.

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements regarding the impact of the financial results on the Company, development potential and timetable of the Mali projects; 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 information 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 state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is 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 information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; the actual results of current exploration activities; foreign operations risks; other risks inherent in the mining industry and other risks described in the annual information form of the Company, which is available under the profile of the Company on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information 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 information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

Cautionary Non-GAAP Statements

Avion believes that investors use certain indicators to assess gold mining companies. The indicators are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared with GAAP. "Cash flow from operating activities before changes in non-cash working capital" is a non-GAAP performance measure which could provide an indication of the Company's ability to generate cash flows from operations, and is calculated by adding back the change in non-cash working capital to "Cash provided by (used for) operating activities" as presented on the Company's consolidated statements of cash flows. "Cash flow per share" is calculated by dividing "Cash provided by (used for) operating activities" and adding back the change in non-cash working capital by the fully diluted number of shares outstanding for the period. "Cash cost per ounce produced" is a non-GAAP performance measure which could provide an indication of the mining and processing efficiency and effectiveness at the mine. It is determined by dividing the relevant mining and processing costs excluding royalties by the ounces produced in the period. There may be some variation in the method of computation of "cash cost per ounce produced" as determined by the Company compared with other mining companies. In this context, "ounces produced" includes in-process and dore inventory along with ounces of gold sold in the period. "Cash costs per ounce produced" may vary from one period to another due to operating efficiencies, waste to ore ratios, grade of ore processed and gold recovery rates in the period.

The following table provides a reconciliation of mining and processing costs per the financial statements and cash operating for the purposes of calculating cash costs per ounce produced and total cash costs produced.

                                    Three months ended   Three months ended
                                        March 31, 2011       March 31, 2010
                                    ----------------------------------------
Mining and processing expenses              13,017,240           11,409,422
By-product silver sales credit                (298,022)             (41,237)
Inventory movements and adjustments         (3,364,038)           2,512,881
Cash operating costs                         9,355,180           13,881,066
Divided by ounces of gold produced              20,270               15,716
Cash cost per ounce produced                       462                  883
Royalties                                    1,473,593            1,358,440
Total cash cost per ounce produced                 534                  970
Operating cashflow                          15,397,626            2,454,619
Operating cashflow per ounce
 produced                                          760                  156

Contacts: Avion Gold Corporation Michael McAllister Manager, Investor Relations (416) 309-2134 info@aviongoldcorp.com www.aviongoldcorp.com