Avion completes Kenieba concession purchase

Avion Gold Corp (C:AVR)
Shares Issued 285,733,117
Last Close 1/7/2010 $0.71
Friday January 08 2010 - News Release

Mr. Rene Bharti reports

AVION COMPLETES ACQUISITION OF INFERRED RESOURCE OF 324,000 OUNCES AU

Avion Gold Corp. has closed its previously announced acquisition of 100 per cent of Great Quest Metals Ltd.'s interest in the Kenieba concessions (see news release in Stockwatch dated Dec. 21, 2009).

The Kenieba concessions are located adjacent to the south and west sides of Avion Gold's Tabakoto property and comprise the Kenieba (Sansanto), Kenieba Est and Comifa concessions totaling approximately 32 km2, which increases Avion's local property package by approximately 30%. The Kenieba concession hosts a inferred mineral resource estimate in the Djambaye 2 gold zone of 324,000 ounces of gold comprising 2,574,000 tonnes grading 3.92 grams per tonne gold (see Carl Verley (P. Geo.), January 28, 2008 Great Quest news release). This mineralized zone remains open along strike and to depth. The interests of Great Quest in the concessions vary from 95% to 100% and are subject to a carried interest to the Government of Mali ranging between 10% and 20%.

Commenting on the acquisition, Avion's President and CEO, John Begeman stated: "We are excited about the completion of the Great Quest acquisition. With 100% ownership of the concession, we are now set to begin integrating the Kenieba Project exploration opportunities into the Tabakoto and Segala exploration program. Avion's Exploration Team looks forward to expanding the mineral resources on the property."

Pursuant to the Acquisition Avion Gold has paid Great Quest total consideration of US$4,000,000, which is comprised of the payment of CAD$500,000 in cash and the issue of 7,608,696 Avion Gold common shares (at a deemed price of $0.46 per share). A total of 1,902,174 common shares (25% of the total share consideration) (the "Escrowed Shares") are being held in escrow pending Avion's receipt of the arrete for the Comifa concession, which at present remains outstanding. In the event that Great Quest is unable to obtain the arrete on or before January 8, 2011, then 20% of the Escrowed Shares shall be released to Avion on each anniversary of the closing date until the earlier of five years and the date Great Quest receives an arrete for the Comifa Concession. Avion has also agreed to make future contingent payments of up to $2.1 million in the event that it produces more than 400,000 ounces of gold from the Kenieba concessions, payable in increments for each 50,000 ounces of additional production. If production from the concessions exceeds 600,000 ounces, Avion would be required to make up to a further $ 1.4 million in payments to complete its obligations under this new agreement.

Don Dudek, P.Geo., the Senior Vice President, Exploration of the Company and a qualified person under National Instrument 43-101, has reviewed the scientific and technical information in this press release.