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ST. PETER PORT, Guernsey, Feb. 27 /CNW/ - Avnel Gold Mining Limited
("Avnel" or the "Company") (TSX: AVK) announced that it has completed a
non-arm's length, non-brokered private placement (the "Private Placement"),
with its principal shareholders, Elliott International, L.P. ("Elliott
International") and Elliott Associates, L.P. ("Elliott Associates", and
collectively with Elliott International, "Elliott"), and the Fern Trust. In
connection with the Private Placement, the Company issued 5,277,817 ordinary
shares in the capital of Avnel (the "Shares") at a price of $0.0315 per Share.
The Shares were issued in partial satisfaction of the payment of the interest
due on December 31, 2008 (the "December Interest") on certain outstanding
convertible loan notes previously issued by Avnel to each of Elliott
International, Elliott Associates, L.P. and the Fern Trust. The remainder of
the December Interest will be satisfied in such other form as mutually
acceptable to the Company and Elliott and the Fern Trust.
Factors considered by the board of directors of the Company in making a
determination that the December Interest should be satisfied, in part, by the
issuance of Shares (in lieu of paying cash) included ensuring the Company had
sufficient cash for its near term working capital needs as a result of the
prevailing conditions in the financial markets and the limited availability of
alternative financing arrangements.
Each of Elliott and the Fern Trust has beneficial ownership of, or
control or direction over, directly or indirectly, more than 10% of the
ordinary shares of Avnel. Accordingly, the Private Placement is a "related
party transaction" for the purposes of Multilateral Instrument 61-101 -
"Protection of Minority Share Holders in Special Transactions" ("MI 61-101").
Avnel relied on an exemption from the requirement to obtain a formal valuation
and minority shareholder approval prescribed by MI 61-101 as they apply to the
Private Placement, as at the time the terms of the Private Placement were
agreed to, the Company determined that neither the aggregate of the fair
market value of the subject matter of, nor the fair market value of the
consideration for, the Private Placement exceeded 25% of Avnel's market
capitalization as calculated and determined in accordance with MI 61-101.
The material change report in respect of this related party transaction
was not able to be filed a minimum of 21 days before the close of the Private
Placement, as stipulated in MI 61-101. In the Company's view, this is both
reasonable and necessary in the circumstances because the December Interest
became due and payable on December 31, 2008 and remained outstanding until the
completion of the Private Placement.
Following closing of the Private Placement, Elliott International,
Elliott Associates and the Fern Trust now hold respectively approximately
31.30%, 19.93% and 28.43% of the issued and outstanding ordinary shares of
About the Company:
Avnel is a gold mining producing company operating the Kalana gold mine
and is engaged in the exploration of the Kalana and Fougadian exploration
Avnel's principal asset is an 80% interest in Société d'Exploitation des
Mines d'Or de Kalana ("SOMIKA"). SOMIKA is the holder of a 30 year
exploitation permit encompassing 387.4 sq. km. around and to the south of the
operating Kalana gold mine in South West Mali. Avnel also holds the Fougadian
exploration permit covering an area of 150 sq. km. which lies to the South of
the main Kalana exploitation permit.
For further information:
For further information: Howard Miller, Chief Executive Officer, Phone:
+44-207-581-4566, Fax: +44-207-581-4493, Email: firstname.lastname@example.org,