AVZ

Avala Resources Ltd. (TSX VENTURE:AVZ) (the "Company" or "Avala") is pleased to
announce an initial summary of ongoing metallurgical testwork on the Bigar Hill,
Korkan and Kraku Pester deposits, which form part of the Timok Gold Project
(TGP), an emerging sediment-hosted gold belt located in Eastern Serbia. 




--  Testwork shows that a significant proportion of the TGP mineralization,
    including the primary material in all three deposits, is free milling,
    with an average CIL recovery of 61% for the Korkan, Bigar Hill and Kraku
    Pester sediments. 
    
--  Bigar Hill oxidized material returns 95% CIL recovery. 
    
--  A conceptual flowsheet involving flotation, pressure oxidation followed
    by intense leaching of the POX residue, and CIL leaching of the
    flotation tailings has achieved 77% recovery and overall gold extraction
    can be improved significantly with optimization of the flotation
    process, with a target recovery in excess of 80%. 



To date, some 315kg of quarter PQ and HQ core, representing 218 meters of drill
intersection, have been collected from the Korkan, Bigar Hill and Kraku Pester
deposits. Metallurgical samples have been carefully chosen to be representative
of the proportion of different lithologies, oxidation state, gold and sulphur
grade ranges.


In addition, over 11,800 five-meter mineralized composites have been collected
from the three deposits, using the Avala sample pulp library, for a major
variability sampling program, to be completed in Q1 2013. The mineralized
composites, collected using a notional 0.1g/t cut off grade, will be tested
using a bottle roll cyanidation extraction followed by duplicate residue assays,
in order to map the inherent 'in situ' recovery, based on a particle size of p80
75 microns, in three dimensions as part of the development of a comprehensive
geometallurgical model.


Metallurgical testwork has been designed and carried out by SGS Mineral Services
UK in Cornwall, UK and SGS Lakefield (SGS), and by Resource Development Inc
(RDI) of Denver, Colorado. 


Complete details of testwork carried out and the generation of the conceptual
flowsheets are given in Appendix 1.


Based on the results of the work to date, the conceptual flowsheet comprises
grinding, flotation, pressure oxidation (POX) of the flotation concentrate,
followed by intensive cyanidation of the POX residue, along with carbon-in-leach
(CIL) of the flotation tailings. 


A diagram summarizing the conceptual flowsheet is available at the following
address: http://media3.marketwire.com/docs/avz11113.jpg


RESULTS

Overall gold extraction using the conceptual flowsheet can be projected to be at
least 80% as the various component parameters are optimized. Gold extraction of
POX material ranged from 87% to 93% with leaching of the flotation tailings
returning 50% to 67% recoveries, for overall gold recoveries of 68% to 77%.
Overall gold extraction can be improved significantly by optimization of the
flotation process. Further testwork to optimize the flowsheet and test
alternative methods are planned for 2013.


PLANNED ADDITIONAL METALLURGICAL TESTWORK

An extensive program of additional metallurgical testwork is planned during
2013. Planned activities include the following:




--  Bottle roll analysis and residue assaying of the +11,800 five meter
    composite database. 
    
--  Additional pulp resampling to expand the bottle roll composite database.
    
--  Development of 3D geometallurgical models of Bigar Hill, Korkan and
    Kraku Pester. 
    
--  Extensive variability sampling and metallurgical testwork. 
    
--  Flotation parameter optimization. 
    
--  Determination of the optimal oxidation process, including bacterial
    leaching testwork. 
    
--  Additional studies on optimizing leaching of the flotation tailings and
    'run-of-mine' ore. 
    
--  Additional mineralogical studies. 
    
--  Further refinement of the optimal metallurgical flowsheet. 
    
--  Additional comminution studies, including separation of barren
    sedimentary clasts. 



Commenting on the results of the metallurgical testwork, James Crombie,
President and CEO of Avala said, "We are extremely pleased with the results of
the testwork so far. Further work to optimize this process and additional work
on alternative methods such as bacterial leach should further improve the
overall recoveries."


QUALIFIED PERSONS

The metallurgical testwork has been managed and reviewed by independent
qualified person Dr. Deepak Malhotra SME of Resource Development Inc. Dr.
Malhotra of RDI has reviewed and approved the contents 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. An updated technical report in compliance with NI
43-101 is being compiled and will be filed on SEDAR within 45 days of this press
release.


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 Bigar Hill,
Korkan, and Kraku Pestar. Avala controls 100% of this newly identified
sediment-hosted gold belt which totals approximately 250 square kilometers. 


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


Avala had approximately $7.7 million in its treasury at September 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).
The common shares of Avala trade on the TSX Venture Exchange under the symbol
AVZ.


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
"anticipate", "believe", "plan", "expect", "intend", "estimate", "forecast",
"project", "budget", "schedule", "may", "will", "could", "might", "should" or
variations of such words or similar words or expressions. Forward-looking
information is based on reasonable assumptions that have been made by the
Company as at the date of the information and is subject to known and unknown
risks, uncertainties, and other factors that may cause actual results or events
to differ materially from those anticipated in the forward-looking information.


Forward looking information in this news release includes information with
respect to potential gold recoveries as well as the potential improvement of
such recoveries with optimization of the flotation process, the target recovery
in excess of 80%, the Company's plans to complete additional test work, 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, the potential size of the sediment-hosted gold system, and the
possibility that the Timok Gold Project will prove to be economic.


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 factors that cause results to be other
than as anticipated, estimated or intended. There can be no assurance that the
forward looking information will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance on
forward-looking information contained herein, except in accordance with
applicable securities laws.


The Company has reported "Inferred Resources" on its Timok Project. Inferred
Resources have a great amount of uncertainty as to their existence, and economic
and legal feasibility. Mineral resources that are not mineral reserves do not
have demonstrated economic viability. Investors are cautioned not to assume that
all or any part of the inferred mineral resource estimates reported by the
Company will ever be upgraded to a higher category or to reserves.


An appendix is available at the following address:
http://media3.marketwire.com/docs/avz21113.pdf


FOR FURTHER INFORMATION PLEASE CONTACT: 
Avala Resources Ltd.
James Crombie, President and Chief Executive Officer
Telephone: +1.450.640.0810
Email: info@avalaresources.com
www.avalaresources.com

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