* Sees mill expansion to resume by early 2013
* Sees 2012 gold production 95,000-102,000 ounces
* Shares up as much as 12 pct (Adds analyst comment, details)
July 4 (Reuters) - West Africa-focussed gold miner Avion Gold Corp said it expects to resume expansion at its Tabakoto mine in Mali and raised its production forecast for the year, sending the company's shares up as much as 12 percent.
Avion said Mali's political situation has stabilized and it expects mill expansion at Tabakoto to resume by early next year.
The market was concerned if the company could continue to operate in Mali, given the political turmoil there, analyst Barry Allan of Mackie Research Capital said.
Avion, which holds 80 percent of the Tabakoto and Segala gold projects in Mali said it now expects to produce between 95,000 and 102,000 ounces of gold for 2012.
In May, Avion had forecast production of 90,000 to 100,000 ounces of gold, after halting mill expansion plans at Tabakoto due to a military coup in the country.
Shares of Avion Gold, which have fallen 74 percent over the last six months, touched a high of 50 Canadian cents in early trade on the Toronto Stock Exchange on Wednesday. They were trading up 10 percent at 49 Canadian cents. (Reporting by Maneesha Tiwari in Bangalore; Editing by Joyjeet Das)