Avnel and IAMGOLD exploration arrangements


ST. PETER PORT, GUERNSEY, March 1, 2013 /CNW/ - Avnel Gold Mining Limited ("Avnel") - TSX: AVK - Avnel reports that the option agreement between it and IAMGOLD Corporation ("IAMGOLD") to enter into joint venture arrangements in respect of Avnel's Kalana Exploitation Permit has automatically lapsed.  The agreement provided IAMGOLD the opportunity to earn an initial 51% interest in Avnel's 80% share of the Kalana project by spending a minimum of $11 million on exploration activities over three years and by delivering a NI 43-101 compliant resource study of at least 2 million ounces of gold as well as proceeding with a feasibility study.  At the end of the exploration period, extended by mutual agreement to February 28, 2013, IAMGOLD had spent approximately $32 million on exploration activities at Kalana but had not delivered a resource study which met the vesting threshold, leading the option to automatically lapse.

Under the terms of the agreement, IAMGOLD's exploration cost receivables will be forfeited and all technical data, studies and other documents relating to the exploration activities not previously shared with Avnel (including financial models) will be so delivered within 30 days at no cost. Avnel has been working closely with its consultants Roscoe Postle & Associates in analysing the database arising from the extensive exploration programme conducted by IAMGOLD, and intends to make a detailed technical announcement on the findings of that work in the near future. Avnel understands from IAMGOLD that its exploration programme has identified an unconstrained resource in the indicated and inferred categories in excess of 1.5 million ounces of gold above the 150m level, excluding a satellite deposit and tailings, and a potentially viable open pit resource in excess of 1.0 million ounces of gold at an average grade of approximately 2.1 g/t. IAMGOLD has also defined a further 14 high priority targets and on one of these, Djirila, a limited drilling programme produced results in conformity with Avnel's exploration of Djirila, the results of which were pressed released in 2006.

In parallel with the ongoing technical work, Avnel has engaged Dundee Securities Ltd. as its exclusive financial advisor in assisting Avnel in exploring all options available to maximise the value of the Kalana project and shareholder value.

The separate agreement whereby IAMGOLD has the option to acquire an initial 51% interest in Avnel's 90% share of the Fougadian Exploration Permit, adjacent to Kalana, as well as IAMGOLD's approximately 10.5% shareholding in Avnel, are not affected by the Kalana option lapsing.  IAMGOLD has spent approximately $2 million on the Fougadian Exploration Permit to date.


Avnel is a producing gold mining company operating the Kalana Mine in south-west Mali and is engaged in the exploration of the 30-year Kalana Exploitation Permit encompassing 387.4 sq km around and to the south of the Kalana Mine as well as on Avnel's abutting Fougadian Exploration Permit.

Avnel's principal asset is an 80% interest in Société d'Exploitation des Mines d'Or de Kalana ("SOMIKA") which is the holder of the Kalana Exploitation Permit. The Kalana Project is situate in south west Mali. The 387.4 sq km exploitation permit has a NI-43-101 compliant resource of 1,020,000 oz (at an average grade of 10.4 g/t) in the measured and indicated category, and 249,000 oz (at an average grade of 3.4 g/t) in the inferred category.

Avnel also holds the Fougadian Exploration Permit covering an area of 75 sq. km. to the south of the main Kalana Exploitation Permit area and abutting it. Avnel and IAMGOLD have entered into a joint venture arrangement agreement whereby IAMGOLD has the option to acquire up to an initial 51% in Avnel's interest in the Fougadian Exploration Permit and in an additional 75 sq. kms to the south of Avnel's Fougadian Exploration Permit area for which IAMGOLD has an exploration permit which is subject to that joint venture arrangement.

Technical Information and Qualified Person/Quality Control Notes

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 described herein.

Forward-Looking Information

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:

Howard Miller

Chief Executive Officer
Phone: +44 207 589 9082; Fax +44 207 589 8507
UK Mobile: +44 07768 696129
Canadian Mobile: +1 416 726 8174
Email:howard@hbmiller.co.uk www.avnelgold.com

Roy Meade

Executive Director, Technical and Operations
Phone : +223 6674 7679

Public Relations Consultant: 
Ari Todd

FronTier Consulting
1 King Street West - Suite 1411
Toronto, Canada
M5H 1A1
Direct: +1 416 800 9156
Mobile: +1 647 999 9734

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