Avion Acquires 290,000 Ozs Indicated and 380,000 Ozs Inferred Mineral Resources With Acquisition of Kofi Project From AXMIN

TORONTO, ONTARIO, Dec 29, 2010 (MARKETWIRE via COMTEX News Network) --

Avion Gold Corporation (TSX: AVR)(OTCQX: AVGCF) ("Avion" or the 'Company') is pleased to announce that it has closed the acquisition of the Kofi Nord, Kofi Dabora, Walia (ACGRI) and Dianissi Concessions, which form part of the Kofi Property, from AXMIN Inc. ("AXMIN") (See news release dated March 31, 2010).

In consideration for 100% of AXMIN's interest in the Kofi Property, Avion shall pay an aggregate amount of CAD $500,000 and issue 4,500,000 shares of Avion to AXMIN, of which CAD $81,250 and 731,250 shares have been issued. This represents 25% of the consideration due to AXMIN in relation to Kofi Nord, Kofi Dobora, Walia (ACGRI) and Dianissi concessions. The remaining 75% of the consideration, for these four concessions, will be paid in three equal tranches on March 24, 2011, June 24, 2011 and September 24, 2011. The closing of the remaining five concessions will take place once the concessions are transferred to Avion's Malian subsidiary.

The Kofi property is large, 333 sq. km (after renewals), property package situated, at its nearest point, within approximately 5 kilometres to the northwest of Avion's Tabakoto Project. The Kofi property wraps around the north side of Randgold's Loulo Mine concessions (Historic Measured and Indicated resources of 62.69 million tonnes grading 4.55 g/t Au) (see Figure below). Four of the nine known mineralized zones on the Kofi property are located along two linear mineralization trends that are defined by the alignment of deposits within the nearby Randgold Property. These two trends, which intersect on the Kofi property, are associated with a magnetic feature that extends for fifteen kilometers on the Kofi Property. Avion believes that this magnetic feature represents a high quality exploration target.

The Kofi property contains nine mineralized zones with identified mineral resources. All of the estimated mineral resources lie in the Kofi Nord concession of which Avion's interest is 81.25% with 12.5% held by African Mining Selection Corporation and 6.25% held by Societe Financiere d'Exploration d'Or au Mali. These interests are prior to a 10% or 20% interest due to the Mali government upon commencement of production. Therefore, indicated mineral resources of 238,000 ounces and inferred mineral resources of 299,000 ounces can now be credited to Avion based on the closing of the acquisition. Total estimated Indicated Mineral Resources are approximately 3.24 million tonnes grading 2.55 g/t Au totaling 293,000 ounces Au (Roberts, 2008 43-101 compliant report). In addition, the Kofi property hosts total Inferred Mineral Resources of approximately 5.26 million tonnes grading 2.18 g/t Au totaling 368,000 ounces (Dec. 11, 2007 AXMIN news release, Roberts, 2008 43-101 compliant report). Most of the zones are open along strike and to depth with zones only tested from 60 to 150 metres below surface. All of the zones are within 15 to 38 kilometers of Tabakoto's mine infrastructure, potentially placing these zones, including the estimated mineral resources, within trucking distance to Tabakoto. A summary of the main mineralized zones is as follows:

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Zone                  Tonnes(i) g/t Au  Ounces Comment
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INDICATED RESOURCES
C Zone                  873,000    3.5  99,000 Tested to less than -100 m
                                               depth
B Zone                1,216,000    2.1  83,000 Tested to -140 m depth
Betea Central         1,154,000    2.3 111,000 Tested to -150 m depth
TOTAL                 3,243,000   2.55 293,000
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INFERRED RESOURCES
C Zone                  913,000    3.7 109,000 Tested to less than -100 m
                                               depth
A zone                  378,000    2.0  25,000 Tested to 150 m depth
A Zone Linear           675,000    1.7  36,000 Tested to -60 m depth
B Zone                  160,000    1.7   9,000 Tested to -140 m depth
Blanaid                 510,000    2.4  39,000 Tested to -85 m depth
Betea Central           981,000    1.6  52,000 Tested to -150 m depth
Betea North             473,000    1.6  25,000 Tested to -150 m depth
Betea South           1,169,000    2.0  74,000 Tested to -150 m depth
TOTAL                 5,259,000   2.18 368,000
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(i) Mineral resources presented by AXMIN on December 11, 2007 and supported
    by a 43-101 compliant technical report by Roberts, 2008.

John Begeman, Avion's President and CEO, stated previously, "The acquisition of the Kofi property allows the Company to take advantage of a resource that can potentially be trucked to our existing milling and processing facility. Randgold, through their exploration success, has demonstrated tremendous value in the area immediately to the south of the Kofi property. Avion believes that the potential exists for similar success on the Kofi property, which has proven stratigraphy that is rich in resources."

Subsequent to the Kofi Nord concession being transferred to Avion's Malian subsidiary and the closure of the acquisition of this concession, Avion re-furbished the exploration camp, compiled the historic exploration data and completed 22 drill holes totaling 4,458 metres over and near to the Kofi C zone. Avion continues to compile the project data and develop targets in preparation for an aggressive drill program of approximately 22,000 metres in 2011. A VTEM survey is planned to cover the concessions in early January 2011. The results from the drill program will be presented in early 2011.

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.

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 is estimated at slightly above Avion's upper end guidance of 85,000 ounces of gold. Production sustainability is supported and enhanced by an aggressive 2010 drill program over an approximately 600 km2 exploration package that both surrounds and is near to the Company's existing mine infrastructure. Additionally, the 1,670 km2 Hounde exploration property in Burkina Faso is returning promising results from an ongoing exploration program. These properties are the subject of an approximate US$ 12 million dollar, approximate 70,000 metre, drill-focused, exploration program in 2010, which management expects, based on results to date, to add new resources and future opportunities for Avion. 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.

About AXMIN

AXMIN is a Canadian exploration and development company with a strong focus on Central and West Africa. AXMIN has projects in Central African Republic, Mali, Sierra Leone and Senegal. For more information regarding AXMIN visit its website at www.axmininc.com.

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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 likelihood, impact and timing of the Company's acquisition of the Kofi Property; statements with respect to the development potential and timetable of the Tabakoto, Kofi and Hounde 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 those 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.

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

SOURCE: Avion Gold Corporation

mailto:info@aviongoldcorp.com

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