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ST. PETER PORT, GUERNSEY, Aug. 11 /CNW/ - Avnel Gold Mining Limited (TSX:
AVK) and IAMGOLD Corporation ("IAMGOLD") have entered into an option agreement
(the "Option Agreement") whereby IAMGOLD has the option to acquire up to an
initial 51% interest in Avnel's 80% interest in Société d'Exploitation de
Mines d'Or de Kalana (the "Kalana project") in Mali, West Africa. All amounts
shown are in US dollars unless otherwise indicated.
The Kalana project is located in southwest Mali and consists of the
Kalana Gold Mine, an operating underground gold mine and an exploration
property covering 387.4 km2 with a 30 year mining exploitation permit (the
"Permit Area"). The Kalana project is owned by Avnel (80%) and the Malian
Government (20%). The property has a developed mine site consisting of a small
underground mine operation exploiting narrow, high-grade, quartz veins.
According to a National Instrument 43-101 - Standards of Disclosure for
Mineral Projects ("NI 43-101") technical report and Avnel's annual information
form for the year ending 2008, there are a total of 886,000 ounces of Measured
and Indicated Resources at a grade of 8.24 g/t Au plus 257,000 ounces of
Inferred Resources at a grade of 3.52 g/t Au. The agreement announced today
provides the opportunity to explore the potential for a sizeable bulk mining
operation at Kalana, drawing on IAMGOLD's expertise and experience with
similar operations in West Africa.
"This agreement represents a significant milestone in the development of
Kalana and fulfills our goal to advance the project into a large scale bulk
mining operation, as well as further exploring the large geologically
prospective Permit Area", said Howard Miller, CEO of Avnel. "We believe that
working together, IAMGOLD and Avnel have the capability to fully explore the
upside potential at Kalana. This partnership leverages Avnel's considerable
investment in the project to date and will benefit both of our shareholders
through IAMGOLD's extensive West African expertise."
The Option Agreement provides IAMGOLD the opportunity to earn an initial
51% interest in Avnel's share of the Kalana project by spending US$11,000,000
on exploration activities over a three year period and by delivering a NI
43-101 resource calculation of at least 2 million ounces of gold as well as
proceeding with a Feasibility Study. IAMGOLD has the option to increase its
interest from 51% to 65 or 70% upon delivering a Feasibility Study that
supports the development of a gold mine. In connection with entering into the
Option Agreement, IAMGOLD will pay Avnel $1 million in cash and Avnel will
issue IAMGOLD warrants to acquire up to 2 million common shares of Avnel at an
exercise price of C$0.45 per share.
Michael Donnelly, Senior Vice President of Exploration at IAMGOLD stated,
"Kalana represents an outstanding opportunity for IAMGOLD to explore a strong
gold mineralized system with the view of realizing the large-scale, bulk
mineable potential. Opportunities of this nature are few and far between and
Kalana is a natural fit with IAMGOLD's long-term strategic objectives to
develop a strong pipeline of projects in our focus areas of West Africa,
Quebec, and the Guiana Shield."
There has been a long history of gold exploration and mining on the
Kalana project that focused on rich, narrow, shallow-dipping quartz veins that
occur within a broader mineralized system. This broader system, and other
satellite zones on the property, have not been evaluated in systematic detail
and will be the focus of IAMGOLD's exploration program. IAMGOLD is planning to
carry out an initial $2.5 million drill program in the first year of the
agreement that includes at least 6,500 metres of drilling. This initial
program will be designed to test the extent and nature of gold mineralization
in the halo of high grade veins that are currently being exploited at the
Kalana Gold Mine, as well as other mineralized structures in the mine area.
Avnel is a gold mining producing company operating the Kalana Gold Mine
and is engaged in the exploration of the Kalana exploitation permit and
Fougadian exploration permit.
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 at 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.
IAMGOLD is a leading mid-tier gold mining company producing approximately
one million ounces from 7 mines on 3 continents. They are focused on growth
and have a pipeline of development and exploration projects. IAMGOLD is
uniquely positioned, with a strong financial base, together with the
management and operations expertise to execute on their aggressive growth
objectives. IAMGOLD's regions of focus include West Africa, the Guiana Shield
of South America and Quebec, Canada. IAMGOLD continues to assess accretive
acquisition opportunities with a strategic fit. IAMGOLD is listed on the
Toronto Stock Exchange ("IMG"), the New York Stock Exchange ("IAG") and the
Botswana Stock Exchange.
Technical Information and Qualified Person/Quality Control Notes
The mineral resource estimates contained in this news release have been
prepared in accordance with National Instrument 43-101 Standards of Disclosure
for Mineral Projects ("NI 43-101").
The mineral resource estimates contained in this news release have been
based on the 2005 Snowden Technical Report prepared by G.M. Greenway,
Principal Resource Geologist, and D.H. Kullmann, Principal Consultant Mining
Engineer, of Snowden Mining Industry Consultants (Pty) Ltd. ("Snowden"), each
of whom is a "Qualified Person" in accordance with National Instrument 43-101
- Standards of Disclosure for Mineral Projects ("National Instrument 43-101").
The authors of the 2005 Snowden Technical Report are independent of Avnel
within the meaning of National Instrument 43-101.
Information in this release arising subsequent to the date of the 2005
Snowden Technical Report regarding the Kalana Gold Mine and exploration
activity is provided by Avnel management under the supervision of Roy Meade (a
director of the Company) who is a non-independent "Qualified Person" as such
term is defined in National Instrument 43-101. Portions of the information are
based on assumptions, qualifications and procedures which are not fully
This release includes certain statements that may be deemed
"forward-looking statements". All statements in this release, other than
statements of historical facts are forward-looking statements. Although Avnel
believes the expectations expressed in such forward-looking statements are
based on reasonable assumptions, such statements are not guarantees of future
performance and actual results or developments may differ materially from
those in the forward-looking statements. Factors that could cause actual
results to differ materially from those in forward looking statements include
market prices, continued availability of capital and financing and general
economic, market or business conditions. Investors are cautioned that any such
statements are not guarantees of future performance and actual results or
developments may differ materially from those projected in the forward-looking
statements. Avnel does not assume any obligation to update or revise its
forward-looking statements, whether as a result of new information, future
events or otherwise.
For further information:
For further information: Howard Miller, Chief Executive Officer, Phone
+44 207 589 9082, Fax +44 207 589 8507, Email: email@example.com, Website:
www.avnelgold.com; Barry Mire or Neil Murray-Lyon, Renmark Financial
Communications, Tel: (514) 939-3989, Fax (514) 939-8507, Website: