Avnel Gold Mining Limited announces US$5,231,000 financing


    ST. PETER PORT, Guernsey, March 31 /CNW/ - Avnel Gold Mining Limited
("Avnel" or the "Company") (TSX: AVK) is pleased to announce that it has
entered into definitive agreements with its principal shareholders, Elliott
International, L.P. ("Elliott International") and certain of its affiliates
(collectively "Elliott"), and the Fern Trust, and two other Avnel
shareholders, with respect to a US$5,250,000 financing of the Company.
    The financing involves three transactions. First, a non-brokered private
placement of 6,542,857 ordinary shares in the capital of Avnel (the
"Offering") will be made to Elliott International and The Liverpool Limited
Partnership, an affiliate of Elliott International, and two other Avnel
shareholders, at a price of $0.35 per ordinary share for gross proceeds of
CDN$2,290,000 (US$2,231,000). Second, a secured term loan in the principal
amount of US$3,000,000 will be provided by Manchester Securities Corp., an
affiliate of Elliott International, to Avnel (the "Loan Facility"), which is
to be repaid on December 31, 2009. The Loan Facility shall be secured by a
security interest granted over all of the ordinary shares of Avnel Gold,
Limited held by the Company and Avnel's interest under an intercompany loan
agreement among Avnel, Avnel Gold, Limited and Société d'Exploitation des
Mines d'Or de Kalana, S.A. Third, the maturity date of the term loan notes
(the "Term Loan Notes") previously issued by Avnel on June 30, 2005 to each of
Elliott and the Fern Trust shall be extended from December 31, 2008 to
December 31, 2009 (the "Term Note Extensions"). The Term Loan Notes will
continue on the same terms in all other respects.
    The net proceeds from the Offering and the Loan Facility will be used for
the advancement of Avnel's properties in Mali and exploration on the Kalana
and Fougadian exploration permits, and for working capital and general
corporate purposes.
    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, each of the Offering, the Loan Facility
and the Term Loan Extensions (collectively, the "Proposed Transactions") 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 intends to rely 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 Proposed Transactions, as at the
time the Proposed Transactions were agreed to, the Company has 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 Proposed Transactions
exceeded 25% of Avnel's market capitalization as calculated and determined in
accordance with MI 61-101.
    The Proposed Transactions are expected to close concurrently on or about
April 10, 2008, subject to the receipt of all regulatory and stock exchange
approvals, the completion of standard documentation and satisfaction of other
customary terms and conditions.

    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 exploration permit.

    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:

For further information: Roy Meade, Chief Executive Officer, Phone +44
207 589 9082, Fax +44 207 589 8507, Email: rmeade@avnelgold.com, Website:

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