Avion Gold languishing near 52-week low despite almost doubling resources in Mali

Shares of Avion Gold failed to recover on Thursday after taking a pummeling the day before, despite announcing vastly improved mineral resources at its Tabakoto Project in Mali, West Africa.

On Wednesday the Toronto-based company said that it is putting mill expansion plans in Mali on hold following the military coup in March sending its shares down 28% .

Compared to Avion's previous reserve statement on July 5, 2011 measured and indicated mineral resources increased 95% from 149,100 ounces of gold to 292,100 ounces of gold and a grade improvement of 35%.

In midday trade the miner was unchanged at   at $0.59 on the Toronto big board. On Wednesday the company hit a 52-week low of $0.51 after almost 10 times the usual number of shares changed hands. The mining sector was generally flat on Thursday with the TSX S&P Global Mining index adding 0.25%.

The counter is down a whopping 63% year to date.

Avion said that the suspension of the 4,000-tonne-per-day mill expansion project due to its contractors leaving the country and supply problems means it should  produce 90,000 to 100,000 ounces of gold this year, down from previous guidance of 140,000-150,000 ounces.

Last week Randgold Resources, which has two thirds of its production in Mali, confirmed its 2012 gold production target of 825,000-865,000 ounces saying it expects its operations in the country to run at full capacity for the rest of the year.

Mali is no.3 in Africa for gold production after South Africa and Ghana.