TORONTO (miningweekly.com) – Toronto-based Avion Resources has achieved commercial production at its Segala and Tabakoto gold operation, in Mali, two months ahead of schedule, the firm reported on Wednesday.

The company is now evaluating the possibility of increasing production throughput at Segala and Tabakoto by adding plant capacity, such as crushing and grinding equipment and related gold-recovery capacity.

Engineering studies on the expansion will begin “shortly”, which will evaluate increasing the annual production to 100 000 oz/y by 2010, and will quantify a schedule of equipment required and a mine plan to produce the annual equivalent of 200 000 oz in 2011.

This year, Avion expects to produce 66 000 oz of gold, at a cash cost of $509/oz, said CEO John Begeman.

Since operations began in mid-February, the company has started the crusher and mill, which is now operating at 1 800 t/d, and begun processing oxide ore from the Segala pit.

Costs were significantly lower than budgeted for, because the company processed stockpiled ore while the development of the Segala pit was under way.

The company has now reached the fresh-ore horizon at Segala, and continuous ore feed of this material is being delivered at a rate of 2 200 t/d.

"Avion restarted the crusher, mill, and gold recovery plant in mid-February as planned, and has realised steady, uninterrupted production at average daily rates of 1 800 t (planned maintenance and mechanical availability included) a day for two and a half months,” Begeman said.

“Avion has achieved a sustainable commercial production rate two months ahead of schedule."

The company has also signed an earth-moving contract with a Malian Contractor, SFTP.

Avion bought the Tabakoto mine and the nearby Segala deposit last year from fellow Canadian Nevsun Resources.

Nevsun began production at Tabakoto in June 2006, but failed to turn a profit at the mine, and finally placed it on care-and-maintenance in 2007, to allow the company to focus on its lucrative Bisha project, in Eritrea.

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