AVZ

Avala Resources Ltd. (TSX VENTURE:AVZ) (the "Company" or "Avala") is pleased to
provide an update on the Korkan target area, part of its Timok Gold Project, a
new gold discovery in an emerging sediment-hosted gold belt located in a proven
and prolific copper-gold mining district, the Timok Magmatic Complex ("TMC") in
Eastern Serbia. The Timok Gold Project (formerly referred to by the Company as
the sediment hosted gold project or the Potoj Cuka gold project) is comprised of
several target areas including Bigar Hill, Korkan and Kraku Pestar. Avala
controls 100% of this newly identified sediment-hosted gold belt which totals
approximately 250 square kilometres.




1.  HIGHLIGHTS 

--  The Korkan resource definition drilling program commenced on January 9,
    2012. The program is focused on establishing continuity of
    mineralization using a nominal 80 meter by 80 meter grid spacing,
    together with a subset of the target area at a nominal 40 meter by 40
    meter grid spacing. The drill holes are located within the Korkan
    mineralized 'footprint' that was outlined by Avala during the earlier,
    wide-spaced, 160 meter by 160 meter diamond drilling program, which
    started in November, 2010. 
--  Resource definition reverse circulation (RC) drilling, the majority of
    which has been drilled on a nominal 40 meter by 40 meter grid spacing,
    at Korkan has returned the following strong to moderate, near-surface,
    gold intercepts (0.4g/t cut-off grade): 

---------------------------------------------------------------------------
Hole ID         From (m)      To (m)   Interval (m)    Au (g/t) Gram-meters
---------------------------------------------------------------------------
KORC003(i)            63         101             38        1.78          68
KORC005                1          19             18        2.47          44
KORC006                1           9              8        3.56          28
KORC008               24          37             13        3.75          49
KORC009                3          21             18        1.43          26
KORC011               46          93             47        3.43         161
KORC012               44         106             62        1.11          69
KORC013               85         108             23        1.39          32
KORC015               95         108             13        3.78          49
KORC031                1          15             14        1.73          24
---------------------------------------------------------------------------

--  Note: Intersections calculated using 5 meter minimum thickness, 5 meter
    maximum included waste. 
--  Note: The listing does not include 'twin' RC drill hole intersections of
    previously drilled diamond drill holes. 
--  ((i)) Drill holes terminate in mineralization i.e. mineralization
    remains open at depth. 
--  To date, Avala has outlined gold mineralization at Korkan over an area
    of approximately 1,200 meters by 600 meters surrounding the original
    discovery hole (open to the northeast) and an area of 1,000 meters by
    1,000 meters at the Bigar Hill target area (open to the west and east).
    Kraku Pestar has been traced over 600 meters by 300 meters and remains
    open to the south. 
--  Resource definition drilling has also commenced on the Kraku Pestar
    target area, using a combination of RC and diamond drill rigs. 
--  In addition, Avala intends to continue the wide-spaced, exploration
    drilling program, concomitant with the resource definition program, in
    order to continue to test the prospective 'target stratigraphy' within
    the Korkan-Bigar trend. The key aim of this aspect of Avala's
    exploration program is to effectively outline the size of the newly
    defined sediment-hosted gold system. 
--  Avala currently has eight diamond drill rigs and two RC drill rigs
    operating on the Korkan-Bigar portion of the sediment-hosted gold belt. 
--  See Figure 1 for the location of Avala's Timok Gold Project licenses
    within the mapped sediment-hosted gold belt. 

2.  GEOLOGY AND MINERALIZATION STYLE 

--  Within the Korkan-Bigar trend, stratabound, fault-controlled breccia and
    minor karst-infill breccia represent the styles of sediment-hosted gold
    mineralization recognized to date. 
--  Gold mineralization appears to be dominantly associated with fine-
    grained pyrite (sulfidation reaction) and a number of alteration styles
    including kaolinitization, decarbonatization of calcareous sedimentary
    rock adjacent to gold mineralization and occasionally, silicification. 
--  Gold mineralization is hosted within a favourable sedimentary package -
    the 'target stratigraphy' - which is underlain by Jurassic and Lower
    Cretaceous limestones and consists predominantly of calcareous
    sandstones and conglomerates which include an interbedded fine grained
    sandstone and clay-rich siltstone unit. 
--  Gold mineralization is hosted within a favourable sedimentary package -
    the 'target stratigraphy' - and consists predominantly of calcareous
    sandstones and conglomerates that include an interbedded fine grained
    sandstone and clay-rich siltstone unit. The upper portion of the target
    stratigraphy consists of 'red' sandstones and volcanic-lithic clastic
    sediments, which are in turn, overlain by calcareous marls, andesitic
    volcanic and volcaniclastic rocks. The andesitic volcanic and
    volcaniclastics are part of the Timok Magmatic Complex. The target
    stratigraphy is underlain by Jurassic and Lower Cretaceous limestones. 
--  Figure 1 shows the location of the Korkan-Bigar trend and the Kraku
    Pestar target area within the 'target stratigraphy'. Figure 1 also shows
    anomalous gold soil geochemistry, on which the total metal contour plots
    based on drill intersections are superimposed.  
--  New assay results from soil sampling of approximately 7 kilometers of
    strike, north of Korkan, have returned several high priority follow-up
    targets, with individual soil anomaly dimensions in excess of 1
    kilometer by 1 kilometer. 
--  The significant potential of the belt can be clearly seen when the
    surface area of the mineralized 'footprints' of the currently drilled
    target areas within the Korkan-Bigar trend are compared to the overall
    extent of the presently defined gold soil anomalies. 

3.  DRILLING AT KORKAN 

--  Resource Definition Drilling (Korkan): Avala commenced RC drilling at
    Korkan on the 9th January, 2012. 
--  The Korkan target area, approximately 1,200 meters by 600 meters, is
    being drilled on a nominal 80 meter by 80 meter grid spacing. In
    addition, a portion of the target area will be drilled on a nominal 40
    meter by 40 meter grid spacing to provide geostatistical support for
    resource estimation purposes. Diamond 'twin' drilling of the RC drill
    holes will be carried out across the target area at a nominal rate of
    15% of total RC drilling. 
--  Refer to Table 1 for a summary of all intersections at various cut-off
    grades for the results of reverse circulation drill holes KORC001 to
    KORC033 and diamond drill holes KODD062, KODD064 to KODD069, KODD071 and
    KODD077, together with all previously reported Korkan diamond drill
    holes. Figure 2 shows a gram-meter total metal contour plot (intervals
   greater than 0.4g/t Au x thickness), of all Korkan drilling to date,
    superimposed on topographic contours. Figure 3 shows a representative
    cross-section through Korkan including recently completed infill RC
    drill holes. 
--  Multiple gold mineralized intercepts per hole are a common feature of
    the gold mineralization outlined to date in the Bigar Hill and Korkan
    target areas. 

4.  DISCUSSION 

--  A major sediment-hosted gold belt bordering the western boundary of the
    Timok Magmatic Complex, identified by soil and trench samples, extends
    over 30 kilometers along strike and is up to 8 kilometers wide. Soil
    sampling has been completed to the south of the currently defined 30
    kilometer strike in order to attempt to determine the overall extent of
    the sediment-hosted gold belt which, based on the extent of mapped
    'target stratigraphy', has the potential to be approximately 70
    kilometers in length. 
--  The geology, geochemistry and available drill intersections suggest a
    strong similarity to the style of gold mineralization typified by the
    North Carlin Trend, Nevada, USA. 
--  The recognition that the majority of the significant trench and diamond
    drill intercepts returned to date occur within the same flat lying or
    shallow dipping sedimentary package has significant implications for the
    gold potential of the Korkan-Bigar trend and the entire sediment-hosted
    gold belt. 
--  Exploration drill testing within the Korkan-Bigar trend, and along
    strike, will continue with wide spaced (nominal 160 meter by 160 meter),
    exploration diamond drill holes, in conjunction with the ongoing
    resource definition drilling program, to allow Avala to outline the
    potential size and economic potential of the sediment-hosted gold
    system. 
--  Avala controls 100% of this newly identified sediment-hosted gold belt,
    which totals approximately 250 square kilometers, and intends to
    systematically drill test all currently defined priority target areas. 
--  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 



5. 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 metre 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 metre 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.


Dr Julian F. H. Barnes, a qualified person under National Instrument 43-101, a
Director and the Company's Special Consultant, has supervised the preparation of
the technical data in this press release.


Previously released data refers to data included in the "Potoj Cuka Gold
Project, Serbia National Instrument 43-101 Technical Report" by Paul Mazzoni
dated March 10, 2010 (the "Technical Report"), filed on SEDAR at www.sedar.com.
Further information in respect of results, investigations, interpretations,
quality assurance and quality control measures, along with geology, mineralogy,
sampling, and analytical procedures is included in the Technical Report.


About Avala Resources Ltd.: Avala is a recently-formed company focused on the
exploration and development of the Potoj Cuka sediment-hosted gold project and
the Timok gold-copper project in Serbia. The common shares of Avala trade on the
TSX Venture Exchange under the symbol AVZ. 


Avala is well-capitalized, with approximately $28.5 million in its treasury at
January 31, 2011, which it plans to use for the exploration and development of
its mineral projects in Serbia. 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

This press release contains forward-looking information. Although the Company
believes in light of the experience of its officers and directors, current
conditions and expected future developments and other factors that have been
considered appropriate that the expectations reflected in this forward-looking
information are reasonable, undue reliance should not be placed on them because
the Company can give no assurance that they will prove to be correct. Forward
looking information in this news release includes statements regarding the
results of the exploration activities and interpretation of such results, the
nature of the mineralization of the project and the potential size of the
sediment-hosted gold system, the suggested similarity to the style of gold
mineralization of the North Carlin Trend project, the completion of a resource
estimation, and the timing and location of future work programs. Forward-looking
information involves known and unknown risks, uncertainties, assumptions and
other factors that may cause actual results or events to differ materially from
those anticipated in such forward-looking information. The forward-looking
statements contained in this press release are made as of the date hereof and
the Company undertakes no obligations to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by applicable
securities laws.


Maps and figures are available at the following address:
http://file.marketwire.com/release/avz0305.pdf

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