Endeavour Mining Corporation (EDVMF)

[buddhabelly2]

Vancouver, August 7, 2012 - Endeavour Mining Corporation today announced it has entered into a definitive arrangement agreement with Avion Gold Corporation ("Avion") (TSX: AVR, OTCQX: AVGCF) pursuant to which Endeavour will acquire all of the issued and outstanding common shares of Avion via a court-approved plan of arrangement (the "Arrangement Agreement"). To keep pace with the growth of its operations, Endeavour also announced an expanded board and management team.

Summary of the transaction:

•Acquisition of Avion in an all share transaction with each Avion common share exchanged for 0.365 of an Endeavour common share valuing Avion at CDN$0.88 per share or CDN$389 million, using closing prices on the TSX as of August 7, 2012

•The acquisition will immediately increase Endeavour's forecast gold production by approximately 50% to 282,000 - 304,000 ounces for 2012

•Endeavour is providing a US$20 million short term exchangeable loan to Avion ("Bridge Loan") to restart the Tabakoto mill capacity upgrade, leading to further gold production growth to over 450,000 ounces per year when Agbaou reaches steady state production.

•Endeavour's NI 43-101 compliant, attributable Proven and Probable gold reserves will increase by 31% to 2.8 million ounces and Measured and Indicated gold resources increase by 52% to 6.0 million ounces, and Inferred gold resources increase by 167% to 3.3 million ounces (see Tables 1 and 2 for details).

•The acquisition of Avion will create one of the largest West African mining companies with three producing mines, a fourth mine currently in construction, and an attractive pipeline of exploration and resource development properties (see Figure 1 for locations).
Terms of the Arrangement Agreement

Under the Arrangement Agreement, each Avion shareholder will receive in exchange for each Avion common share held 0.365 of an Endeavour common share ("Endeavour Share") via a court-approved plan of arrangement. Certain eligible Avion shareholders may elect to receive their consideration in the form of Exchangeable Shares of Endeavour in lieu of Endeavour Shares. Exchangeable Shares may provide eligible Avion shareholders the opportunity to obtain a deferral of taxable capital gains for Canadian income tax purposes. Also under the Arrangement Agreement, Avion stock options will be varied to become exercisable for Endeavour Shares on the same 0.365 exchange ratio.

Based on the closing price of the Endeavour Shares on the Toronto Stock Exchange of CDN$2.40 on August 7, 2012 the implied transaction value of CDN$0.88 per Avion share yields a premium of 56%. The transaction value on a basic share outstanding basis is approximately CDN$389 million and the Avion shareholders will represent approximately 39.8% of the enlarged shareholder base.

Using the 20-day volume weighted average prices ("VWAP") on the TSX for the period ending August 7, 2012 for both Endeavour and Avion, the exchange ratio yields a premium of 70% to Avion. Applying the 85-day VWAPs on the TSX for the period ending August 7, 2012 for both Endeavour and Avion, the exchange ratio yields a premium of 29% to Avion.

The Arrangement Agreement will be subject to, among other things, approval of 66 2/3% of the Avion shareholder votes cast, approval of 50% of the Endeavour shareholder votes cast, and other customary conditions including court approvals. The two shareholder meetings are expected to occur on or about October 12, 2012 and the transaction is expected to close in October 2012. The record date for the special meeting of the Endeavour shareholders will be announced in the near future.


Neil Woodyer, CEO of Endeavour, commented:

"The acquisition of Avion complements our strategy of becoming a leading and diversified West African gold producer. Avion's Tabakoto Mine and Kofi property in western Mali and the advanced Houndé property in Burkina Faso fit very well into Endeavour's production and development portfolios. At closing, Endeavour's gold production immediately rises to approximately 300,000 ounces per year and including the Tabakoto mill expansion and completion of Agbaou construction, our gold production is forecast to reach approximately 450,000 ounces per year. Endeavour has a well-established track record of using its financial and operating strengths to create value and produce results."

HIGHLIGHTS OF THE ACQUISITION
•A pro forma market capitalization of $977 million using Endeavour's closing price on the TSX as of August 7, 2012

•Endeavour has a pro forma 2012 gold production range of 282,000 to 304,000 ounces, with substantial operating cash flows

•Avion's 80% owned Tabakoto mine produced 91,200 ounces at cash costs of $652 per ounce in 2011, with 2012 production guidance on track to deliver between 95,000 and 102,000 ounces

•Endeavour's financial strength to address immediate cash needs at Avion, and get the Tabakoto mill expansion, from 2,000 tpd to 4,000 tpd, back on track

•Increased operating and geographical diversification, with three operating mines (Ghana, Burkina Faso, western Mali) and a fourth mine in construction (Côte d'Ivoire)

•Addition of Avion's Houndé exploration concession in Burkina Faso includes the highly prospective Vindaloo Deposit, which is progressing towards a Preliminary Economic Assessment by year end. Current resources on the Houndé concession are 893,000 indicated ounces and 712,000 inferred ounces (see Table 2 for mineral resource details)

•Addition of Avion's Kofi exploration concession in western Mali, that is approximately 30km to 60km North of the Tabakoto processing plant, which currently hosts 500,000 indicated ounces and 702,000 inferred ounces (see Table 2 for mineral resource details)

•Addition of 1,800 km2 of exploration ground for a total of 11,800 km2

•Through an all-stock transaction, Avion shareholders can continue to participate in future growth

•Valuation upside as Endeavour continues to progress toward becoming a mid-tier gold producer
Figure 1 - Mine & Project Location Map




For more details about the transaction, please refer to the investor presentation on Endeavour's website at www.endeavourmining.com.

Board and Management Changes

In line with the growth of the business, Endeavour is strengthening its board and management teams. The Board of Directors will be increased from seven to eight directors, with both John Begeman and another member of the current Avion board joining, and one member of the current Endeavour board will resign. John Begeman is currently President and CEO of Avion and a mining engineer with over 30 years of mining experience.

Mark Connelly, currently the Chief Operating Officer ("COO") of Endeavour, has elected to step down from his role as COO effective August 31, 2012 in order to pursue other interests. Mark will remain on the Endeavour board. Mark is replaced as COO by Adriaan ("Attie") Roux, formerly Senior VP Operations. Attie Roux joined Endeavour following the completion of the merger with Adamus in December 2011, having been responsible for commissioning the Nzema processing plant in Ghana. As Senior VP Operations at Endeavour, he managed Endeavour's two operating mines - Youga and Nzema. Prior to joining Adamus in 2010, Attie worked for AngloGold Ashanti as a metallurgist for more than 30 years, including some of AngloGold's most successful mines in West Africa, including Siquiri (Guinea), Iduapriem and Obuasi (both Ghana).

Endeavour is also pleased to announce the further strengthening of its technical team based in Accra, Ghana, with the appointment of Gérard De Hert as Vice President of Exploration. As part of the management progression, two members of Endeavour's Technical Services team have been promoted: David Laing is now Executive Vice President Technical Services and Doug Reddy has been named Senior Vice President Technical Services.

Neil Woodyer, CEO of Endeavour, commented

"Mark Connelly built Adamus Resources into a successful mining operation and has been key in developing Endeavour into the business it is today - a fast growing and profitable gold producer with projects throughout West Africa. We look forward to his valued contribution as a member of our board. Attie Roux, with his proven operational management and technical expertise in commissioning the Nzema project on time and on budget, will ensure continuity as COO as we progress with the construction of Agbaou and the integration of Tabakoto into our operating platform.
We are also pleased to welcome Gérard de Hert to our technical team based in Accra, Ghana; his 14 years plus of experience in Africa in both mining and exploration is ideally suited to lead our near-mine and regional exploration programs. Endeavour is continuing to build upon its strong team based in Accra, Ghana, which is the principal technical hub for the Company's expansion throughout the region. The Accra team is complemented by our technical services group in Vancouver; David Laing and Doug Reddy, who between them have over 60 years experience in engineering, mine management, construction, exploration, technical reporting and consulting."

Additional details of the Transaction

The proceeds of the US$20 million Bridge Loan will be used by Avion to fund capital expenditures for the mill expansion at the Tabakoto operation in western Mali, and for other corporate needs. The terms of the Bridge Loan include a repayment date which is 6 months from the date of the loan; the loan may be repaid (a) in cash or (b) by Avion giving notice that it wishes to repay by delivering common shares of Avion to Endeavour. If Avion elects option (b) above, Endeavour may accept or may instead give notice to Avion electing to extend the repayment date by a further 6 month period. The loan is secured by the shares of certain of Avion's subsidiary companies which are holding companies for the Tabakoto, Houndé and Kofi properties.

Subject to pending TSX approval, the Bridge Loan contains an exchange feature enabling Endeavour in its sole discretion to exchange the Bridge Loan principal at any time into Avion common shares at an exchange price of US$0.4323. If Endeavour has not previously exercised its exchange right before the initial repayment date and Avion elects to deliver common shares in lieu of a cash repayment, the exchange price shall be the lower of (i) US$0.4323, and (ii) the 5-day VWAP for Avion on the TSX to the close of trading on the date immediately preceding the initial repayment date.

The Arrangement Agreement includes customary deal protections. Avion has agreed not to solicit any alternative transactions and has agreed to pay Endeavour a break fee of approximately CDN$11.5 million and an Expense Fee of $2 million in certain circumstances. In addition, Endeavour has been granted the right to match any competing offer and has agreed to pay Avion an Expense Fee of $1 million in certain circumstances.

Both the Endeavour and Avion Boards of Directors have determined that the proposed acquisition is in the best interests of their respective companies based on a number of factors, including fairness opinions received from their financial advisors, and have unanimously approved the terms of the Arrangement Agreement and recommend that their respective shareholders vote in favour of the proposed acquisition.

The directors and officers of Endeavour, Avion, Forbes and Manhattan and Stan Bharti have agreed to execute agreements to vote their shares in favour of the proposed acquisition, subject to customary fiduciary waivers in the case of a superior offer.

Stikeman Elliott LLP has provided Endeavour with legal counsel, and Canaccord Genuity Corp. has provided Endeavour's Board of Directors with an opinion that, as of the date thereof and subject to the assumptions, limitations and qualifications set out therein, the exchange ratio is fair, from a financial point of view, to the shareholders of Endeavour.

For the benefit of Endeavour's shareholders, full details of the proposed transaction will be included in a management information circular to be filed with regulatory authorities in both Canada and Australia and mailed to the Endeavour shareholders in accordance with applicable securities laws. For the benefit of Avion's shareholders, Avion will be mailing a management information circular to its shareholders.

Conference Call and Webcast Details

Endeavour will host a conference call and webcast to discuss the transaction as part of its previously announced Q2 results webcast on Thursday, August 9, 2012 at

5:00 AM in Vancouver
8:00 AM in Toronto and New York
1:00 PM in London
8:00 PM in Perth
10:00 PM in Sydney
Participating on the call will be Neil Woodyer, CEO of Endeavour, John Begeman, CEO of Avion, and also from Endeavour: Mark Connelly, COO, Christian Milau, CFO, David Laing, Executive VP - Technical Services, and Doug Bowlby, Executive VP - Corporate Development. Analysts and interested investors are invited to participate in the conference call using the dial in numbers below.

International: [phone]
North American toll-free: [phone]
Australian toll-free: 0011-800-2246-2666

The conference call can also be accessed through the following link: http://www.endeavourmining.com/s/Webcasts.asp
The call will be archived for later playback on Endeavour's website until August 9, 2013.

Table 1 - Pro Forma Mineral Reserves a

Mine / Project Reserves
Proven Probable Proven & Probable Gold
Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Price
Mt g/t Mt g/t Mt g/t US$/oz
Nzema1,2,3,4- Total 11.938 2.0 770,000 2.664 2.3 193,000 14.603 2.0 964,000 US$900
Attributable - 90% 693,000 174,000 867,000
Youga5,6,7 - Total 3.517 2.1 235,000 3.792 1.7 212,000 7.308 1.9 448,000 US$1200
Attributable - 90% 211,000 191,000 403,000
Agbaou8 - Total 5.407 2.3 390,000 5.668 2.8 515,000 11.075 2.5 905,000 US$1200
Attributable - 85% 332,000 438,000 769,000
Finkolo9 - Total 1.037 3.3 109,000 1.381 2.9 127,000 2.418 3.0 237,000 US$900
Attributable - 40% 44,000 51,000 95,000
Tabakoto Underground10, 11 - Total 0.355 5.4 61,000 4.251 4.4 604,000 4.606 4.5 665,000 US$1183
Attributable - 80% 49,000 483,000 532,000
Tabakoto Open Pit10, 11, - Total 0.078 3.7 9,000 0.931 3.6 107,000 1.009 3.6 116,000 US$1183
Attributable - 80% 7,000 86,000 93,000
Tabakoto Stockpile10, 11,- Total 1.291 1.1 46,000 1.291 1.1 46,000 na
Attributable - 80% 37,000 37,000

Pro Forma Total 1,620,000 1,758,000 3,381,000
Pro Forma Attributable 1,373,000 1,423,000 2,796,000


Table 2 - Pro Forma Mineral Resources a

Mine / Project Resources (including reserves) Lower cutoff
Measured Indicated Measured & Indicated Inferred
Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces
Mt Au g/t Mt Au g/t Mt Au g/t Mt Au g/t Au g/t
Nzema1,2,3,4 - Total 31.658 1.4 1,409,000 16.671 1.2 656,000 48.329 1.3 2,064,000 17.725 1.1 652,000 0.5
Attributable - 90% 1,268,000 590,000 1,858,000 587,000 0.5
Youga5 - Total 3.526 2.3 266,000 7.897 1.6 398,000 11.422 1.8 664,000 3.462 1.2 138,000 0.5
Attributable - 90% 239,000 358,000 598,000 124,000 0.5
Youga Satellite6 - Total 3.220 1.1 118,000 3.731 1.2 146,000 6.951 1.2 264,000 1.211 1.4 55,000 0.5
Attributable - 90% 106,000 131,000 238,000 50,000 0.5
Ouare9 - Total 4.738 2.1 323,000 0.5
Attributable - 90% 291,000 0.5
Agbaou8 - Total 6.262 2.2 438,000 8.708 2.6 719,000 14.970 2.4 1,157,000 1.473 1.5 73,000 0.5
Attributable - 85% 373,000 611,000 983,000 62,000 0.5
Finkolo9 - Total 3.290 2.3 242,000 6.820 2.0 445,000 10.110 2.1 687,000 6.730 1.4 301,000 0.5
Attributable - 40% 97,000 178,000 275,000 120,000 0.5
Tabakoto Underground10, 11, - Total 0.341 7.0 76,000 4.773 5.5 848,000 5.114 5.6 925,000 6.007 5.0 968,000 2.0
Attributable - 80% 61,000 678,000 740,000 774,000 2.0
Tabakoto Open Pit10, 11 - Total 0.054 4.9 9,000 1.604 3.5 182,000 1.658 3.6 190,000 1.591 2.9 149,000 1.0
Attributable - 80% 7,000 146,000 152,000 119,000 1.0
Kofi12 - Total 6.901 2.3 500,000 6.901 2.3 500,000 12.355 1.8 702,000 0.5
Attributable - 75% 375,000 375,000 527,000 0.5
Houndé13 - Total 13.407 2.1 893,000 13.407 2.1 893,000 10.717 2.1 712,000 0.5
Attributable - 90% 804,000 804,000 641,000 0.5

Pro Forma Total 2,558,000 4,787,000 7,344,000 4,073,000
Pro Forma Attributable 2,151,000 3,871,000 6,023,000 3,295,000

Notes to Mineral Resource and Reserve Tables

a Effective dates are as follows: Nzema & Youga - December 31, 2011, Ouare - June 16 2009, Agbaou - May 25, 2012, Finkolo - June 10, 2010, Tabakoto - January 1, 2012, Kofi - December 21, 2011, Houndé - December 19, 2011

1 Technical Report Southern Ashanti Gold Project, Ghana, West Africa effective August 17, 2009, prepared by Ron Heeks (M.AusIMM), Technical Manager Adamus Resources Limited. Qualified Persons not independent of Endeavour Mining Corporation, Depleted as of December 31, 2011.

2 2012 Mineral Resource update of the Salman Gold Deposit effective February 16 2012, prepared by Nic Johnson (M.AIG), MPR Geological Consultants.

3 2012 Mineral Resource update of the Aliva and Nfutu Gold Deposits effective February 17, 2012, prepared by Nic Johnson (M.AIG), MPR Geological Consultants.

4 Mineral Resource for the Akropon Gold Deposit, Internal Resource Estimate effective February 20, 2012, prepared by William Yeo, Qualified Persons not independent of Endeavour Mining Corporation.

5 Technical Report and Update of Mineral Resources and Mineral Reserves for the Youga Gold Mine, Burkina Faso, West Africa, effective December 31, 2010 and dated March 15, 2011, prepared by A. de Freitas and K. Woodman, Qualified Persons not independent of Endeavour Mining Corporation, Depleted as of December 31, 2011.

6 Youga Satellite Deposits, Internal Resource Estimates, prepared by AMEC under supervision of K. Woodman; Internal Reserve Estimates, prepared by SEMS under supervision of A. de Freitas Qualified Persons not independent of Endeavour Mining Corporation.

7 Ouaré Deposit, Internal Resource Estimate, dated June 16 2009 prepared by A. Mouton under supervision of K. Woodman Qualified Persons not independent of Endeavour Mining Corporation.

8 Agbaou Gold Project Technical Report, Cote d'Ivoire, West Africa for Endeavour Mining Corp. effective date of May 25, 2012, prepared by SRK Consulting South Africa (Pty) Ltd, SENET , Knight Piésold Consulting.

9 Tabakoroni Feasibility Study Report, Tabakoroni Gold Deposit, Mali, West Africa, dated June 10, 2010, prepared by S. Stein and K. Woodman, Qualified Persons not independent of Endeavour Mining Corporation.

10 Andrew Bradfield, P.Eng. and Don Dudek, P.Geo. Sr. Officers of Avion and Qualified Persons, as such term is defined under NI 43-101, are responsible for the Mineral Reserve estimates and have reviewed and approved the scientific and technical information in this document relating to those estimates.

11 The Mineral Reserves have been classified in accordance with requirements of NI 43-101 and the CIM standards. Mineral Reserve estimates are based on a gold price of USD$1,183 per ounce and a 94% process plant recovery. Additional parameters used to define the reserves are presented in a NI 43-101 compliant report filed on SEDAR on August 17, 2011, entitled Technical Report on the Tabakoto Mining Operations Mali, West Africa for Avion Gold Corporation and prepared by P&E Mining Consultants Inc

12 Technical Report and Updated Resource Estimate on the Kofi Project, Mali, Africa for Avion Gold Corp, dated December 21, 2011, and prepared by P&E Mining Consultants Inc.

13 Technical Report and Updated Resource Estimate on the Houndé Property, Burkina Faso, Africa for Avion Gold Corp, dated December 19, 2011, and prepared by P&E Mining Consultants Inc.

Qualified Person

Adriaan "Attie" Roux, Pr. Sci.Nat, Endeavour's Senior VP - Operations, is a Qualified Person under NI 43-101, and has reviewed and approved the technical information in this news release, except if noted otherwise.

About Endeavour Mining Corporation

Endeavour is a gold producer delivering growth. Endeavour owns two gold mines producing approximately 195,000 ounces per year in Ghana and Burkina Faso that are generating significant operating cash flows to fund exploration and development growth. In addition to upside potential at its current operations, Endeavour's third gold mine, Agbaou in Côte d'Ivoire has entered the construction phase for an additional 100,000 ounces per year during Q1 2014. Endeavour's strong financial base encourages investments in long-term operational growth, exploration to replace and increase reserves, and funding for acquisitions.

Endeavour Mining Corporation is listed on the TSX (symbol EDV) and ASX (symbol EVR), and also trades on the OTCQX (symbol EDVMF).


On behalf of Endeavour Mining Corporation

Neil Woodyer
Chief Executive Officer

This news release contains "forward-looking statements" including but not limited to, statements with respect to Endeavour and Avion's plans and operating performance, the estimation of mineral reserves and resources, the timing and amount of estimated future production, costs of future production, future capital expenditures, and the success of exploration activities. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "expects", "expected", "budgeted", "forecasts" and "anticipates". Forward-looking statements, while based on management's best estimates and assumptions, are subject to risks and uncertainties that may cause actual results to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the successful integration of acquisitions; risks related to international operations; risks related to general economic conditions and credit availability, actual results of current exploration activities, unanticipated reclamation expenses; changes in project parameters as plans continue to be refined; fluctuations in prices of metals including gold; fluctuations in foreign currency exchange rates, increases in market prices of mining consumables, possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; delays in the completion of development or construction activities, changes in national and local government regulation of mining operations, tax rules and regulations, and political and economic developments in countries in which Endeavour operates. Although Endeavour has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements 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 statements. Please refer to Endeavour and Avion's most recent Annual Information Form filed under their respective profiles at www.sedar.com for further information respecting the risks affecting Endeavour, Avion and their businesses.

For additional information, contact:

Marla Gale
Vice President - Investor Relations
[phone]
[e-mail]

Bobby Morse (for UK/European enquiries)
Buchanan
[phone]
[e-mail]

Endeavour Mining Corporation
Cayman Corporate Centre
27 Hospital Road
George Town, Grand Cayman,
KY1 1109, Cayman Islands
Tel: [phone]
Fax: [phone]
www.endeavourmining.com

A Cayman Islands exempted company with limited liability.