Avala Resources Ltd. (TSX VENTURE: AVZ) (the "Company" or "Avala")
is pleased to present an update on progress and drill results from
the Korkan-Bigar trend, part of the sediment-hosted gold belt
within the Cretaceous magmatic arc bordering the Timok Magmatic
Complex ("TMC") in Eastern Serbia.
"With the commencement of resource definition drilling on the
Korkan-Bigar trend, the Company has progressed to the next stage of
its development very much in line with management's expectations,"
said James Crombie, President and CEO of Avala. "We look forward to
establishing continuity of mineralization within the mineralized
'footprints' outlined by Avala to date and providing regular
updates to the market. Additionally, we will continue to
aggressively drill test the recently discovered target areas which
are located in close proximity to the resource definition drilling
areas."
1. HIGHLIGHTS
-- Resource definition drilling has commenced with a Reverse Circulation
(RC) drill rig (GEMEX RC-500) on the Korkan-Bigar trend, initially
drilling the Bigar Hill, Korkan and Kraku Pestar target areas.
-- The resource definition program will focus on establishing continuity of
mineralization, with a nominal 80 meter by 80 meter grid spacing within
the mineralized 'footprints' which have been outlined by Avala during
the earlier, wide-spaced, 160 meter by 160 meter diamond drilling
programs, which have been ongoing since August, 2010.
-- Wide-spaced 'step out' drilling (nominal 160 meter by 160 meter) on the
Korkan-Bigar trend continues to intersect gold mineralization within the
target stratigraphy, a sequence of strongly altered and decarbonatized
conglomerates and sandstones with interbedded fine grained sandstone and
clay-rich siltstones, marls, andesitic volcanics and derivative clastic
rocks.
-- Drilling on the Korkan-Bigar trend (Bigar Hill) returned the following
strong to moderate gold intercepts (0.4g/t cut-off grade), generally
from the edges of the wide-spaced drilling grid:
------------------------------------------------------------------------
Hole From To Interval Au Gram-
ID (m) (m) (m) (g/t) meters
------------------------------------------------------------------------
------------------------------------------------------------------------
BHDD029 68 105 37 4.05 150
BHDD032 101 118 17 1.24 21
BHDD034 126 176 60 2.08 125
------------------------------------------------------------------------
Note: BHDD034 represents a nominal 80 meter by 80 meter infill hole.
Note: 5 meter minimum thickness, 5 meter maximum included waste.
-- Exploration drilling has also begun to test three new target areas,
located in close proximity to the Korkan and Bigar Hill mineralized
'footprints'.
-- Exploration drilling on the Bigar East Target Area, located
approximately 800 meters east-southeast of the Bigar Hill zone returned
the following gold intercept (0.4g/t cut-off grade):
------------------------------------------------------------------------
Hole From To Interval Au Gram-
ID (m) (m) (m) (g/t) meters
------------------------------------------------------------------------
------------------------------------------------------------------------
BIDD013 233 256 23 2.46 57
------------------------------------------------------------------------
Note: 5 meter minimum thickness, 5 meter maximum included waste.
-- Exploration drilling on the Korkan-Bigar trend (Rapture Fault Zone),
located approximately 700 meters southwest of the Bigar Hill zone
returned the following gold intercepts (0.4g/t cut-off grade):
------------------------------------------------------------------------
Hole From To Interval Au Gram-
ID (m) (m) (m) (g/t) meters
------------------------------------------------------------------------
------------------------------------------------------------------------
BIDD007 74.9 83.4 8.5 0.67 6
109.4 127 17.6 1.17 21
210 215 5 1.21 6
------------------------------------------------------------------------
Note: 5 meter minimum thickness, 5 meter maximum included waste.
-- Exploration trenching on the Korkan-Bigar trend (Vizur Target Area),
located approximately 3 kilometers north of Korkan returned the
following gold intercept (0.4g/t cut-off grade) from the
limestone/'target stratigraphy' contact:
------------------------------------------------------------------------
Trench From To Interval Au Gram-
ID (m) (m) (m) (g/t) meters
------------------------------------------------------------------------
------------------------------------------------------------------------
KOTR067 - - 10 1.51 15
------------------------------------------------------------------------
-- To date, Avala has outlined gold mineralization at Korkan over an area
of approximately 1,200 meters by 600 meters surrounding the original
discovery hole (KODD001) and an area of 1,000 meters by 1,000 meters on
the Bigar Hill target area (open in all directions). Kraku Pestar has
been traced over 600 meters by 300 meters and is open to the north and
south.
-- Three new target areas have been identified within 3 kilometres of the
core Korkan-Bigar Hill area, within the same target stratigraphy.
-- Avala intends to continue the wide-spaced drilling program, in
conjunction with the recently commenced resource definition program, in
order to test the prospective 'target stratigraphy' within the Korkan-
Bigar trend, to effectively outline the size of the newly defined
sediment-hosted gold system.
-- The combined Korkan-Bigar trend is over 10 kilometers long and 2.5
kilometers wide and represents part of the northern portion of the
sediment-hosted gold belt.
-- Additionally, soil sampling has been extended 5 kilometers to the north
of Korkan and 20 kilometers to the south of Umka on a nominal 400 meter
by 50 meter grid spacing across the target stratigraphy in an attempt to
increase the overall strike length of the sediment-hosted gold belt from
its currently defined 20 kilometers to potentially greater than 50
kilometers; results are expected during Q4, 2011. Wide-spaced (nominal
800 meter centers) exploration trenching programs have been planned for
these areas during the remainder of 2011.
-- Avala currently has eight diamond drill rigs and one RC drill rig
operating on the sediment-hosted gold belt. Two diamond drill rigs have
been allocated to the southern portion of the sediment-hosted gold belt
on the Umka-Strnjak target area where scout drill holes are being
drilled on nominal 320 meter by 320 meter centers within the target
stratigraphy. The remainder of the drill rigs are operating on the
Korkan-Bigar trend.
-- With the assistance of the Ministry of Environment, Mining and Spatial
Planning, Avala has recently consolidated the Korkan-Bigar and Umka-
Strnjak trends into one exploration licence (previously two) which
retains the name 'Potoj Cuka-Tisnica'. The surrounding 'Breza'
exploration licence has also been consolidated into one exploration
licence (previously two); both exploration licences are valid until
September 15th, 2013 and renewable for additional periods following this
date. See Figures 1& 5.
2. GEOLOGY AND MINERALIZATION STYLE
-- Sediment-hosted gold, located along the western margin of the Timok
Magmatic Complex, represents a previously unrecognized style of gold
mineralization within the Timok region.
-- Within the Korkan-Bigar trend, stratabound, fault-controlled breccia
together with minor karst-infill breccia represent the styles of
sediment-hosted gold mineralization recognized to date.
-- Gold mineralization appears to be associated with fine-grained pyrite
(sulfidation reaction) and a number of alteration styles including
kaolinitization, decarbonatization of calcareous sedimentary rock
adjacent to the gold mineralization and occasionally silicification.
-- Gold mineralization is hosted within a favourable sedimentary package -
the 'target stratigraphy' - which is underlain by Jurassic and Lower
Cretaceous limestones and consists predominantly of calcareous
sandstones and conglomerates which include an interbedded fine grained
sandstone and clay-rich siltstone unit.
-- The upper portion of the target stratigraphy consists of 'red'
sandstones and volcanic-lithic clastics which are in turn overlain by
calcareous marls, andesitic volcanics and derivative clastic rocks,
which represent the youngest portion of the stratigraphy.
-- To date gold mineralized intervals have been returned from all portions
of the target stratigraphy, excluding, to a certain extent, the marl
unit and the interbedded fine grained sandstone and clay-rich siltstone
unit which have been only weakly mineralized; Avala believes that these
units may be locally acting as an aquitard, or capping unit, to
hydrothermal fluids.
-- In general the target stratigraphy within the Korkan-Bigar trend appears
to be gently dipping towards the east and may have been gently folded
with a northwest axial plane.
-- Figure 1 shows the location of the Korkan-Bigar trend and the Kraku
Pestar target area within the currently defined 20 kilometer long
sediment-hosted gold belt, defined in this image by anomalous gold soil
geochemistry, together with their respective total metal contour plots
superimposed. The significant potential of the belt can be clearly seen
when the surface area of the 'footprints' of the currently drilled
target areas are compared to the overall extent of the presently defined
gold soil anomalies.
3. DRILLING & TRENCHING AT KORKAN-BIGAR
-- Resource Definition Drilling: Avala commenced RC drilling on a nominal
80 meter by 80 meter grid spacing at Bigar Hill on the 18th August,
2011. Drilling will continue at Bigar Hill and then move to Korkan later
in 2011. A second RC drill rig is expected to be operational in January,
2012 and will commence on the Kraku Pestar target area. Additionally,
selected locations within the target areas will be drilled to a nominal
40 meter by 40 meter grid spacing to provide geostatistical support and
diamond 'twin' drilling of the RC drill holes will be carried out across
the target areas at a nominal rate of 15% of total drilling.
-- Bigar Hill: Avala is continuing the 'step out' drilling program at the
Bigar Hill target area to the immediate east from current drilling, on a
nominal 160 meter by 160 meter spacing. See Table 1 for a summary of all
intersections at various cut-off grades for the results of diamond drill
holes BHDD024 to BHDD034. Figure 2 shows a gram-meter (intervals greater
than 0.4g/t Au x thickness), total metal contour plot of all Bigar Hill
drilling to date superimposed on mapped geology, together with the
locations of the Rapture Fault Zone and Bigar East target areas.
-- Strong gold mineralization is hosted within polymict conglomerate and
sandstone intervals which have been strongly decarbonatized with
intense, sooty, fine grained pyrite matrix infill. Recent drilling
continues to confirm gold mineralization (BHDD032: 17m @ 1.24g/t Au
(from 101m)) within the andesitic volcanics and derivative clastic rocks
which were previously thought to be a poor host to gold. To date gold
mineralization within the footwall Jurassic massive limestone of the
Korkan-Bigar trend has been of an overall low to moderate tenor and is
generally associated with brecciation, either karst or brittle
deformation.
-- Additional drilling, generally peripheral in nature, has been completed
within the Korkan target area and results have been returned for the
following ten drill holes: KODD045 to KODD054. See Table 2 & Figure 4.
-- Multiple gold mineralized intercepts per hole are a common feature of
the gold mineralization outlined to date in the Korkan, Bigar Hill,
Kraku Pestar and Rapture Fault Zone target areas.
-- Bigar East: Initial wide-spaced drilling (nominal 320 meter by 160
meter) has commenced targeting the Jurassic limestone/'target
stratigraphy' contact area which appears to be a faulted contact which
dips steeply (approx. 70 degrees ) towards the east and strikes north;
it is defined by a moderate gold soil anomaly and variously gold
anomalous trenches. Recent drilling (BIDD013: 23m @ 2.46g/t Au (from
233m)) has intersected a previously unrecognized style of mineralization
to date; fault-controlled breccia mineralization within limestone
located at a depth significantly below the limestone/'target
stratigraphy' contact. Avala will continue to drill test the Bigar East
target area northwards towards the Bigar Hill target area. See Figure 2.
-- Rapture Fault Zone: Initial wide-spaced drilling (nominal 160 meter by
160 meter) has commenced targeting the meta-sediment (phyllite)/Jurassic
limestone contact area which appears to be a faulted contact which dips
steeply (approx. 70 degrees ) towards the east and strikes north-
northwest and is defined by a strong gold-arsenic-thallium soil anomaly
(greater than 0.1g/t Au), together with moderately gold anomalous
trenches. Avala is targeting an approximately 1,000 meter long portion
of the Rapture Fault Zone, which may contain gold mineralization within
a 50-80 meter wide corridor. Mineralization is associated with breccia
within the fault zone and stratabound mineralization within the footwall
meta-sediments. See Figure 2.
-- See Tables 4 & 5 for a summary of all intersections in diamond drill
holes BIDD003 to BIDD013 from the Bigar East and the Rapture Fault Zone
areas, at various cut-off grades.
-- Vizur: Recent exploration trenching has intersected moderate gold
mineralization (KOTR067: 10m @ 1.51g/t) at the Jurassic
limestone/'target stratigraphy' contact located approximately 3
kilometers north from Korkan discovery hole (KODD001). Exposed sediments
within the area (marls and andesite volcanics/volcaniclastics) represent
the upper portion of the target stratigraphy (i.e. youngest) and
drilling has recently commenced targeting the calcareous sandstones and
conglomerates that should lie stratigraphically beneath these units. See
Figure 1 for Vizur target area location.
4. DISCUSSION
-- A major sediment-hosted gold belt bordering the western boundary of the
Timok Magmatic Complex, identified by soil and trench samples, extends
over 20 kilometers along strike and is up to 8 kilometers wide. Soil
sampling is being completed to the north and south of the currently
defined 20 kilometer strike in order to attempt to determine the overall
extent of the sediment-hosted gold belt.
-- The geology, geochemistry and available drill intersections suggest a
strong similarity to the style of gold mineralization typified by the
North Carlin Trend, Nevada, USA.
-- The recognition that the majority of the significant trench and diamond
drill intercepts returned to date occur within the same flat lying or
shallow dipping sedimentary package has significant implications for the
gold potential of the Korkan-Bigar trend and the entire sediment-hosted
gold belt.
-- The mineralized intersections detailed in Tables 1, 2 and 3 (for Bigar
Hill, Korkan and Kraku Pestar respectively) have been compiled using a
minimum 5 meter thickness and a maximum of 5 meters of included waste
and a variety of lower cut off grades. Weighted mean gold grades and
intersection thicknesses have been compiled for each area and are
displayed in Table 6. Very encouraging grades and thicknesses have been
returned. Multiple intercepts per hole are commonly encountered,
particularly at Korkan and Bigar Hill.
Table 6: Weighted average intersection grades and intersection
thickness per hole for the three target areas drilled to date in
the 160 meter by 160 meter diamond drilling program.
-------------------------------------------------
0.4g/t Au Cut Off
-----------------------------------------
Weighted
Weighted Weighted Intersection
Average Average Thickness Per
Target No. of Grade Grade Hole
Area Holes (Au g/t) (S %) (meters)
-------------------------------------------------
-------------------------------------------------
BIGAR
HILL 23 1.53 1.38 32
KORKAN 19 1.69 1.27 21
KRAKU
PESTAR 10 1.16 3.51 39
-------------------------------------------------
-------------------------------------------------
0.8g/t Au Cut Off
-----------------------------------------
Weighted
Weighted Weighted Intersection
Average Average Thickness Per
Target No. of Grade Grade Hole
Area Holes (Au g/t) (S %) (meters)
-------------------------------------------------
-------------------------------------------------
BIGAR
HILL 18 2.11 1.55 26
KORKAN 13 2.61 1.38 17
KRAKU
PESTAR 8 1.87 4.19 22
-------------------------------------------------
-------------------------------------------------
1.0 g/t Au Cut Off
-----------------------------------------
Weighted
Weighted Weighted Intersection
Average Average Thickness Per
Target No. of Grade Grade Hole
Area Holes (Au g/t) (S %) (meters)
-------------------------------------------------
-------------------------------------------------
BIGAR
HILL 17 2.40 1.58 22
KORKAN 10 2.89 1.49 19
KRAKU
PESTAR 6 2.30 4.10 21
-------------------------------------------------
(Note: Down hole intersections do not necessarily represent true thickness)
-- Bulk density data is also routinely collected from diamond drill core as
part of the standard set of procedures employed by Avala. To date some
329 density samples have been collected and measured from samples
returning greater than 0.1g/t Au and 122 density measurements from
samples grading over 0.4g/t Au within the sediment-hosted gold belt.
Density data from the three target areas return very similar average
bulk densities at 2.62 tonnes per cubic meter, as summarised in Table 7
(note that there is currently a backlog of density samples from the
Bigar Hill drilling).
Table 7: Bulk density data from the Sediment-Hosted Gold
project.
----------------------------------------------------------------------
0.1g/t Au Cut Off 0.4g/t Au Cut Off
------------------------------------------------------------
Average Average
Target Bulk Density Number of Bulk Density Number of
Area (t/cm) Measurements (t/cm) Measurements
----------------------------------------------------------------------
BIGAR HILL 2.62 86 2.62 40
----------------------------------------------------------------------
KORKAN 2.63 148 2.62 52
----------------------------------------------------------------------
KRAKU
PESTAR 2.63 95 2.59 30
----------------------------------------------------------------------
Average/To
tal 2.63 329 2.61 122
----------------------------------------------------------------------
(Note: Densities determined using the wax coating immersion method by SGS
Bor)
-- Diamond drill core recovery statistics are routinely monitored as part
of the standard set of procedures employed by Avala. Diamond core
recovery data from the three target areas return very similar and
consistent values, as summarised in Table 8.
Table 8: Diamond drill core recovery statistics from the
Sediment-Hosted Gold project.
----------------------------------------------------------
0.1g/t Au Cut Off 0.4g/t Au Cut Off
----------------------------------------------
Average Sample Average Sample
Target Recovery Recovery
Area (Diamond Drilling) (Diamond Drilling)
----------------------------------------------------------
BIGAR HILL 95.0% 92.7%
----------------------------------------------------------
KORKAN 95.6% 95.7%
----------------------------------------------------------
KRAKU PESTAR 91.9% 92.0%
----------------------------------------------------------
Average 94.2% 93.5%
----------------------------------------------------------
-- Exploration drill testing of the Korkan-Bigar trend will continue with
wide spaced (nominal 160 meter by 160 meter) diamond drill holes, in
conjunction with the ongoing resource definition drilling program, to
allow Avala to outline the potential size of the sediment-hosted gold
system.
-- In addition, the Jurassic limestone package has strongly anomalous gold
in soil geochemistry where it is exposed in the Korkan-Bigar & Umka-
Strnjak trends and numerous gold mineralized trench intercepts have been
returned to date, hosted in limestone, which require drill follow-up in
due course.
-- Avala controls 100% of the newly identified sediment-hosted gold belt
which totals approximately 250 square kilometers and intends to
systematically drill test all currently defined priority target areas.
-- Please see the following link to view all Korkan-Bigar and Kraku Pestar
drill holes located spatially in three dimensions:
http://www.corebox.net/properties/potoj-cuka-gold-belt
5. SAMPLING AND ANALYSIS
The majority of soil samples have been assayed at the ALS Chemex
laboratory, Perth, Australia. More recent programs have been
assayed at the SGS managed laboratory at Chelopech in Bulgaria
using a combination of ICP-OES and ICP-MS whereas gold has been
assayed by low level detection fire assay method with an AAS
finish. The Company has established a laboratory facility at Bor,
Eastern Serbia which is independently managed by SGS. Trench
samples were prepared at the laboratory facility at Bor and the
samples have been assayed at the SGS managed laboratory at
Chelopech in Bulgaria or the laboratory facility at Bor. Diamond
drill core has been prepared at the laboratory facility at Bor and
assayed at either the SGS managed laboratory at Chelopech in
Bulgaria or the assay laboratory at Bor. A one metre sampling
interval has been used where possible for the Sediment-Hosted Gold
project diamond drilling program. Half core is routinely submitted
to the laboratory for analysis. Following Avala standard quality
assurance procedures, a full suite of field and laboratory
duplicates and replicates along with internationally accredited
standards and blanks, have been submitted with each batch of
samples.
Trench sampling was carried out as channels in the wall just
above the trench floor on 2m intervals. Except where extensive soil
cover is encountered, trenches were sampled in their entirety. The
samples were routinely weighed prior to final bagging to maintain
an even sample size and to avoid sampling bias in harder rock
types. An average channel sample weight was maintained at 3kg/m,
which produces a consistent sample weight approximating half HQ
core samples. Field duplicate samples were taken every 20 samples
and known standards were inserted into the sample stream after
every 20th sample. A geological and structural log was completed as
for diamond drilling. All data collected in the field was routinely
entered into geology and structural geology spread sheets using
Field Marshal software for subsequent entry to an acQuire database
and validation.
Dr Julian F. H. Barnes, a qualified person under National
Instrument 43-101, a Director and the Company's Special Consultant,
has supervised the preparation of the technical data in this press
release.
Previously released data refers to data included in the "Potoj
Cuka Gold Project, Serbia National Instrument 43-101 Technical
Report" by Paul Mazzoni dated March 10, 2010 (the "Technical
Report"), filed on SEDAR at www.sedar.com. Further information in
respect of results, investigations, interpretations, quality
assurance and quality control measures, along with geology,
mineralogy, sampling, and analytical procedures is included in the
Technical Report.
About Avala Resources Ltd.: Avala is a recently-formed company
focused on the exploration and development of the Potoj Cuka
sediment-hosted gold project and the Timok gold-copper project in
Serbia. The common shares of Avala trade on the TSX Venture
Exchange under the symbol AVZ.
Avala is well-capitalized, with approximately $37 million in its
treasury at August 31, 2011, which it plans to use for the
exploration and development of its mineral projects in Serbia.
Avala's issued and outstanding share capital totals 214,492,223
common shares, of which approximately 51.4% is held by Dundee
Precious Metals Inc. (TSX: DPM).
Cautionary Statement
The potential quantity and grade described in this press release
are conceptual in nature. There has been insufficient exploration
to define a mineral resource and it is uncertain if further
exploration will result in the Korkan-Bigar target area being
delineated as a mineral resource.
This press release contains forward-looking information.
Although the Company believes in light of the experience of its
officers and directors, current conditions and expected future
developments and other factors that have been considered
appropriate that the expectations reflected in this forward-looking
information are reasonable, undue reliance should not be placed on
them because the Company can give no assurance that they will prove
to be correct. Forward looking information in this news release
includes statements regarding the nature of the mineralization of
the project, the results of the exploration activities and
interpretation of such results, the gold potential of the project,
the potential size of the sediment-hosted gold system, the
suggested similarity to the style of gold mineralization of the
North Carlin Trend project and the similarities suggested and with
timing and location of future work programs. Forward-looking
information involves known and unknown risks, uncertainties,
assumptions and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking information. The forward-looking statements
contained in this press release are made as of the date hereof and
the Company undertakes no obligations to update publicly or revise
any forward-looking statements or information, whether as a result
of new information, future events or otherwise, unless so required
by applicable securities laws.
To view Figure 1, please click on the following link:
http://media3.marketwire.com/docs/avalafigure1.pdf
To view Figure 2, please click on the following link:
http://media3.marketwire.com/docs/avalafigure2.pdf
To view Figure 3, please click on the following link:
http://media3.marketwire.com/docs/avalafigure3.pdf
To view Figure 4, please click on the following link:
http://media3.marketwire.com/docs/avalafigure4.pdf
To view Figure 5, please click on the following link:
http://media3.marketwire.com/docs/avalafigure5.pdf
To view Table 1, please click on the following link:
http://media3.marketwire.com/docs/avalatable1.pdf
To view Table 2, please click on the following link:
http://media3.marketwire.com/docs/avalatable2.pdf
To view Table 3, please click on the following link:
http://media3.marketwire.com/docs/avalatable3.pdf
To view Table 4, please click on the following link:
http://media3.marketwire.com/docs/avalatable4.pdf
To view Table 5, please click on the following link:
http://media3.marketwire.com/docs/avalatable5.pdf
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this press release.
Contacts: Avala Resources Ltd. James Crombie, President and
Chief Executive Officer +1.450.640.0810 info@avalaresources.com
www.avalaresources.com
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