Avala Resources Announces Initial Resource Estimate for Kraku

Avala Resources Announces Initial Resource Estimate for Kraku Pester,
Part of the Timok Gold Project, Serbia 
LONGUEUIL, QUEBEC -- (Marketwire) -- 01/14/13 -- Avala Resources Ltd.
(TSX VENTURE:AVZ) (the "Company" or "Avala") is pleased to announce
the initial resource estimate for the Kraku Pester project area, part
of its Timok Gold Project, a new gold discovery in an emerging
sediment-hosted gold belt located in Eastern Serbia.  
The Kraku Pester National Instrument 43-101 compliant mineral
resource, prepared by AMC Consultants Limited (UK) ("AMC"), an
independent mining consulting firm, has been estimated, using a
0.6g/t gold cut off, at 6,320,000 tonnes grading an average of 1.31
g/t gold in the indicated resource category for 266,000 ounces of
gold and 2,200,000 tonnes grading an average of 1.0 g/t gold in the
inferred resource category for 68,000 ounces of gold. The combined
inferred resources for Kraku Pester, Korkan and Bigar Hill have been
estimated at 48,664,000 tonnes at an average grade of 1.5 g/t gold in
the inferred resource category for 2,397,000 ounces of gold, using a
0.6 g/t gold cut off. 
A summary of the Kraku Pester mineral resource estimate using various
cut-offs is tabulated below: 


 
----------------------------------------------------------------------------
                                KRAKU PESTER                                
                         RESOURCE ESTIMATE(1,2,3,4,5)                       
                        Combined Mineralized Zones                          
                              In Situ Resources                             
                      Local Multiple Indicator Kriging                      
                     5m x 5m x 5m Selective Mining Unit                     
 
Cut Off Grade                Million                  Au            Thousand
(Au g/t)                      Tonnes               (g/t)         Ounces (Au)
----------------------------------------------------------------------------
                                   INDICATED RESOURCES                      
----------------------------------------------------------------------------
0.2                            11.37                0.91                 332
0.4                             8.93                1.07                 308
0.6                             6.32                1.31                 266
0.8                             4.63                1.54                 229
1.0                             3.62                1.72                 200
----------------------------------------------------------------------------
                                    INFERRED RESOURCES                      
----------------------------------------------------------------------------
0.2                              8.1                 0.5                 140
0.4                              4.4                 0.7                 104
0.6                              2.2                 1.0                  68
0.8                              1.3                 1.2                  49
1.0                              0.7                 1.4                  32
----------------------------------------------------------------------------
 
1.  The effective date of the Kraku Pester mineral resource estimate is 9th
    January 2013. 
2.  The gold price used in this estimate was the mean gold price for 2010,
    2011 and 2012 of US$1490/oz. First phase, extensive metallurgical test
    work has been completed and, based on information to date, along with
    possible projected throughput rates for the entire Timok Gold Project,
    typical mining costs and a range of processing costs and indicative
    processing suitable gold cut off grades are considered to lie in the
    range of 0.4g/t to 0.8g/t. 
3.  Mineral resources which are not mineral reserves do not have
    demonstrated economic viability. The estimate of mineral resources may
    be materially affected by environmental, permitting, legal, title,
    taxation, sociopolitical, marketing, or other relevant issues. 
4.  The quantity and grade of reported inferred resources in this estimation
    are uncertain in nature and there has been insufficient exploration to
    define these inferred resources as indicated or measured mineral
    resources. 
5.  Totals and average grades are subject to rounding to the appropriate
    precision. 

 
A summary of the Kraku Pester, Korkan and Bigar Hill resource
estimates is tabulated below: 


 
----------------------------------------------------------------------------
                             TIMOK GOLD PROJECT                             
               INIDCATED AND INFERRED RESOURCE ESTIMATES(1,2)               
                         Combined Mineralized Zones                         
                              In Situ Resources                             
                      Local Multiple Indicator Kriging                      
                     5m x 5m x 5m Selective Mining Unit                     
----------------------------------------------------------------------------
Cut Off Grade                Million                  Au             Million
(Au g/t)                      Tonnes               (g/t)         Ounces (Au)
----------------------------------------------------------------------------
                                     INDICATED RESOURCES                    
----------------------------------------------------------------------------
                                        KRAKU PESTER                        
----------------------------------------------------------------------------
0.2                            11.37                 0.9                0.33
0.4                             8.93                 1.1                0.31
0.6                             6.32                 1.3                0.27
0.8                             4.63                 1.5                0.23
1.0                             3.62                 1.7                0.20
----------------------------------------------------------------------------
                                     INFERRED RESOURCES                     
----------------------------------------------------------------------------
                                           KORKAN                           
----------------------------------------------------------------------------
0.2                             49.5                 0.8                 1.3
0.4                             31.0                 1.2                 1.2
0.6                             20.1                 1.5                 1.0
0.8                             13.5                 1.9                 0.8
1.0                             10.0                 2.3                 0.7
----------------------------------------------------------------------------
                                         BIGAR HILL                         
----------------------------------------------------------------------------
0.2                             63.9                 0.9                 1.8
0.4                             38.0                 1.3                 1.5
0.6                             26.4                 1.6                 1.4
0.8                             20.4                 1.9                 1.2
1.0                             16.5                 2.1                 1.1
----------------------------------------------------------------------------
                                        KRAKU PESTER                        
----------------------------------------------------------------------------
0.2                              8.1                 0.5                0.14
0.4                              4.4                 0.7                0.10
0.6                              2.2                 1.0                0.07
0.8                              1.3                 1.2                0.05
1.0                              0.7                 1.4                0.03
----------------------------------------------------------------------------
                                  TOTAL INFERRED RESOURCES                  
----------------------------------------------------------------------------
0.2                            121.5                 0.8                 3.2
0.4                             73.4                 1.2                 2.8
0.6                             48.7                 1.5                 2.4
0.8                             35.2                 1.9                 2.1
1.0                             27.2                 2.1                 1.9
----------------------------------------------------------------------------
 
1.  The effective dates of the mineral resource estimates are: Kraku Pester,
    9th January 2013, Korkan, 30th October 2012 and Bigar Hill, 30th June
    2012. 
2.  See notes 2 to 5 in the Kraku Pester Resource Estimate table above. 

 
The Timok Gold Project comprises several targets including Bigar
Hill, Korkan and Kraku Pester. The Kraku Pester resource estimate is
the last of three scheduled initial resource estimates.  
Infill drilling at 40 meter by 40 meter spacing has now been
completed at Korkan and Bigar Hill. Once all assay and QAQC data for
the 40 meter by 40 meter drilling over the deposits has been
received, the resource estimates will be updated with the aim of
upgrading the estimates to Indicated Resources. The databases are
expected to be completed and 'closed off' during February 2013 with
revised resource estimates planned for completion in Q2 2013.   
Avala controls 100% of this newly identified sediment-hosted gold
belt which totals approximately 250 square kilometers. 


 
1.  HIGHLIGHTS 
 
--  Independent resource estimation has been completed by Chris Arnold
    MAusIMM CP(Geo) of AMC. 
--  The Kraku Pester resource estimate is based on 139 drill holes (38
    diamond drill holes and 94 reverse circulation drill holes, including 7
    RC holes with diamond drill core 'tails'). Details of the drilling and
    sampling program are summarised in the table below.  
 
----------------------------------------------------------------------------
Item                                        DD             RC          Total
----------------------------------------------------------------------------
HOLES                                       45             94            139
METERS DRILLED                          10,713         14,962         25,675
SAMPLES                                 10,007         14,962         24,969
AVERAGE RECOVERY                           96%            86%            90%
PRIMARY ASSAYS (Au)                     10,007         14,962         24,969
BULK DENSITIES                                                         1,482
TWIN DRILL PAIRS                                                           7
TWIN DRILL METERS                                                      1,111
40m x 40m (%)                                                            86%
----------------------------------------------------------------------------
 
--  A very large amount of check sampling and assaying has been completed,
    as part of Avala's standard QAQC procedures. 
--  Block model preparation and resource estimation has been completed using
    Datamine and Isatis. One-meter composites (the standard Avala sampling
    unit) were used to define geological boundaries and mineralized
    wireframes, whilst three-meter down hole composites were used for
    statistical analysis, variography and resource estimation. 
--  Resource estimation has been completed using the geostatistical
    technique, Local Multiple Indicator Kriging ("Local MIK"). Local MIK is
    a form of Multiple Indicator Kriging ("MIK") where the grades are
    'mapped' directly into selective mining unit ("SMU") sized blocks from a
    MIK estimate. Bulk density has been estimated into the block model using
    inverse distance weighting. One main mineralized zone was defined;
    predominantly within the main sediment package with part of the
    mineralization being hosted in monzonite. A total of 11 indicator cut
    offs were used to define the metal distribution within the model cells.
    Statistical analysis of the composite grade distribution confirmed that
    the application of an upper cut was not required prior to grade
    estimation. 
--  The mineral resource was estimated using the Canadian Institute of
    Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral
    Resources and Reserves, Definitions and Guidelines prepared by the CIM
    Standing Committee on Reserve Definitions and adopted by CIM Council.
    The in-situ resource estimate is within the defined mineralized
    wireframes and is reported at a wide range of lower cut off grades. An
    initial, comprehensive, phase of metallurgical test work has been
    completed. 
 
2.  ADDITIONAL INFORMATION 

 
Drilling and Sampling 


 
--  Figure 1 shows the location of the Kraku Pester deposit within the Timok
    Gold Project, whilst Figure 2 displays the drilling carried out to date
    at Kraku Pester along with a gram-meter map of mineralization. Figure 3
    shows a typical cross section through the Kraku Pester deposit,
    illustrating the near-surface, shallow dipping nature of gold
    mineralization. Drilling and sampling of the Kraku Pester deposit has
    utilised Avala's full set of detailed and extensive procedures. 

 
Density Measurements  


 
--  Density measurements are routinely taken every three meters down hole
    from diamond drill core. The bulk density of the core billets is
    measured at the SGS managed laboratory at Bor using the industry
    standard wax-seal immersion method.  

 
Twin Drilling 


 
--  Twin drilling has been routinely performed with some 7.4% of all RC
    holes being twinned with diamond drilling. 
--  At Kraku Pester 7 DD 'twin holes' have been completed, for 1,111 meters.
--  The routine reverse circulation-diamond 'twin' drilling program
    continues to confirm that the majority of mineralized intercepts and
    hence the deposit style, is dominated by layer-parallel, lithology-
    controlled gold mineralization and that there can be close spaced
    variation in gold grade, as is typical for gold deposits. 

 
Variography 


 
--  Detailed variography has been carried out for six of the 11 indicator
    cut offs that have been used in the Local MIK grade estimation. 

 
Grade-Tonnage Reporting 


 
--  The Kraku Pester resource model has been categorized as Indicated and
    Inferred Resources using the CIM Standards on Mineral Resources and
    Reserves, Definitions and Guidelines. The table below summarizes the
    grade-tonnage data for the Bigar Hill, Korkan and Kraku Pester deposits,
    subdivided by the principal interpreted mineralized zones.
 
--  In the table below, the reported tonnes, grade and contained gold have
    been rounded to the appropriate level of precision for the reporting of
    Indicated and Inferred Resources, and the numbers may not correlate
    exactly due to rounding errors. 
--  A series of significant gold deposits has been defined at Kraku Pester,
    Korkan and Bigar Hill and Avala considers the potential for further
    discoveries in the Timok Gold Project to be very high. 
 
----------------------------------------------------------------------------
                      KORKAN, BIGAR HILL AND KRAKU PESTER                   
                 INDICATED AND INFERRED RESOURCE ESTIMATE (1)               
                   Subdivided By Mineralized Zone Domain                    
                      Local Multiple Indicator Kriging                      
                     5m x 5m x 5m Selective Mining Unit                     
----------------------------------------------------------------------------
         Andesite/Mozonite         S1/LMST             S1/S2                
                   MMVO(2)            MSSL           MSSS(3)           TOTAL
Cut Off                                                                     
 Grade            Au               Au               Au               Au     
(Au g/t)    Mt (g/t)   Moz    Mt(g/t)  Moz    Mt (g/t)   Moz    Mt(g/t)  Moz
----------------------------------------------------------------------------
                             INDICATED RESOURCES                            
----------------------------------------------------------------------------
                                KRAKU PESTER                                
----------------------------------------------------------------------------
0.2       4.17  0.87  0.12                  7.20  0.93  0.22 11.37 0.91 0.33
0.4       3.16  1.05  0.11                  5.77  1.09  0.20  8.93 1.07 0.31
0.6       2.27  1.26  0.09                  4.05  1.34  0.17  6.32 1.31 0.27
0.8       1.68  1.46  0.08                  2.96  1.58  0.15  4.63 1.54 0.23
1.0       1.29  1.64  0.07                  2.33  1.76  0.13  3.62 1.72 0.20
----------------------------------------------------------------------------
                             INFERRED RESOURCES                             
----------------------------------------------------------------------------
                                KRAKU PESTER                                
----------------------------------------------------------------------------
0.2        5.7   0.5   0.1                   2.4   0.5   0.0   8.1  0.5  0.1
0.4        3.1   0.7   0.1                   1.3   0.7   0.0   4.4  0.7  0.1
0.6        1.6   0.9   0.0                   0.6   1.0   0.0   2.2  1.0  0.0
0.8        0.9   1.2   0.0                   0.4   1.2   0.0   1.3  1.2  0.0
1.0        0.5   1.4   0.0                   0.2   1.5   0.0   0.7  1.4  0.0
----------------------------------------------------------------------------
                                   KORKAN                                   
----------------------------------------------------------------------------
0.2        1.5   0.4   0.0  41.6  0.9  1.2   6.4   0.6   0.1  49.5  0.8  1.3
0.4        0.7   0.6   0.0  27.3  1.2  1.0   2.9   1.0   0.1  31.0  1.2  1.2
0.6        0.2   0.7   0.0  18.3  1.5  0.9   1.6   1.3   0.1  20.1  1.5  1.0
0.8        0.0   0.9   0.0  12.5  1.9  0.8   1.0   1.8   0.0  13.5  1.9  0.8
1.0                          9.4  2.3  0.7   0.6   2.3   0.0  10.0  2.3  0.7
----------------------------------------------------------------------------
                                 BIGAR HILL                                 
----------------------------------------------------------------------------
0.2        4.1   0.6   0.1  25.2  0.6  0.5  34.6   1.0   1.2  63.9  0.9  1.8
0.4        2.2   1.0   0.1  13.2  1.0  0.4  22.7   1.4   1.1  38.0  1.3  1.5
0.6        1.4   1.2   0.1   8.0  1.3  0.3  17.0   1.8   1.0  26.4  1.6  1.4
0.8        1.0   1.4   0.0   5.5  1.6  0.3  14.0   2.0   0.9  20.5  1.9  1.2
1.0        0.7   1.7   0.0   4.0  1.8  0.2  11.9   2.2   0.8  16.5  2.1  1.1
----------------------------------------------------------------------------
                          TOTAL INFERRED RESOURCES                          
----------------------------------------------------------------------------
0.2       11.3   0.6   0.2  66.7  0.8  1.7  43.5   0.9   1.3 121.5  0.8  3.2
0.4        6.0   0.8   0.2  40.5  1.1  1.5  26.9   1.4   1.2  73.4  1.2  2.8
0.6        3.2   1.1   0.1  26.2  1.5  1.2  19.2   1.7   1.1  48.7  1.5  2.4
0.8        1.9   1.3   0.0  17.9  1.8  1.1  15.3   2.0   1.0  35.2  1.9  2.1
1.0        1.2   1.6   0.0  13.3  2.1  0.9  12.7   2.2   0.9  27.2  2.1  1.9
----------------------------------------------------------------------------
 
1.  See notes on page 1-2. 
2.  For Kraku Pester the proportion of the resource that is hosted in
    monzonite is reported here. 
3.  For Kraku Pester, the remainder of the deposit (dominantly sediments
    with minor volcanics) is reported here. 

 
Please see the following link to view all Korkan, Bigar Hill and
Kraku Pestar drill holes located spatially in three dimensions:
http://www.corebox.net/properties/timok-gold-project 


 
3.  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 meter sampling interval has been used where possible for the
Timok Gold Project diamond drilling program. Half core is routinely
submitted to the laboratory for analysis. Reverse circulation drill
samples have been prepared at the laboratory facility at Bor and
assayed at the laboratory at Bor. A one meter sampling interval has
been used for the Timok Gold Project reverse circulation drilling
program. 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 are 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 is routinely entered into geology and
structural geology spread sheets using Field Marshal software for
subsequent inclusion in an acQuire database and validation. 


 
4.  QUALIFIED PERSONS 

 
The Kraku Pester resource estimate was undertaken by independent
qualified person Chris Arnold MAusIMM CP(Geo) of AMC. Mr. Arnold of
AMC has reviewed and approved the contents of this press release
insofar as the Kraku Pester mineral resource estimate is concerned.  
AMC is completing a technical report for the mineral resource
estimate in compliance with NI 43-101 to be filed on SEDA
R within 45
days of this press release. 
The other technical information contained in this press release was
prepared and approved by Dr Julian F. H. Barnes, FAusIMM, MAIG, a
director of the Company and special consultant. Dr. Barnes is a
'qualified person' within the meaning of that term under NI 43-101.  
About Avala Resources Ltd.: Avala Resources is a mineral exploration
company focused on the exploration and development of the Timok Gold
Project in Eastern Serbia. The Timok Gold Project comprises several
targets, including Korkan, Bigar Hill and Kraku Pester. Avala
controls 100% of this newly identified sediment-hosted gold belt
which totals approximately 250 square kilometers. The common shares
of Avala trade on the TSX Venture Exchange under the symbol AVZ.  
Avala had approximately $4.4 million in its treasury at November 30,
2012. 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 Regarding Forward-Looking Information  
This press release contains 'forward-looking information' within the
meaning of applicable Canadian securities legislation. Generally,
forward-looking information can be identified by the use of
forward-looking terminology such as "believe", "plan", "expect",
"intend", "estimate", "project", "schedule", "may", "will", "could",
"might", "should" or variations of such words or similar words or
expressions. Forward looking information in this press release
includes information about mineral resource estimates, the potential
expansion and upgrade of such the resource estimates, the timing and
location of future work programs, the results and interpretation of
studies and exploration activities, the nature of the mineralization
of the project, and the potential for further discoveries. Since
forward-looking information are based on assumptions and address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ
materially from those currently anticipated in such statements for
many reasons such as: changes in general economic conditions and
conditions in the financial markets; changes in demand and prices for
gold; legislative, environmental and other regulatory, political and
competitive developments; operational difficulties encountered in
connection with the activities of the Company; the Company's
financial condition, and other matters discussed in this news
release. This list is not exhaustive of the factors that may affect
any of the Company's forward-looking information. These and other
factors made in public disclosures and filings by the Company should
be considered carefully and readers should not place undue reliance
on the Company's forward-looking information. The Company does not
undertake to update any forward-looking statement that may be made
from time to time by the Company or on its behalf, except in
accordance with applicable securities laws.  
"Inferred Resources" have a great amount of uncertainty as to their
existence, and economic and legal feasibility. Investors are
cautioned not to assume that all or any part of an inferred mineral
resource reported in this news release will ever be upgraded to a
higher category or to reserves. Mineral resources are not mineral
reserves and do not have demonstrated economic viability. U.S.
persons are advised that while mineral resources are recognized under
Canadian regulations, the U.S. Securities and Exchange Commission
does not recognize them. U.S. persons are also cautioned not to
assume that all or any part of an inferred mineral resource is
economically or legally mineable. 
Figures 1, 2 and 3 are available at the following address:
http://media3.marketwire.com/docs/avz_figures0114.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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