Avnel Gold Mining Limited (AVK: TSX) announces second quarter 2007 results - Period ended June 30, 2007

    LONDON, UK, Aug. 13 /CNW Telbec/ -

    Avnel achieves net income of $0.3 million the second quarter of 2007 and
    gold sales for the quarter of 7,994 ounces


    Avnel Gold Mining Limited ("Avnel" or the "Company") recorded net income
of $0.3 million ($0.004 per share) for the three months ended June 30, 2007
and net income of $1.0 million ($0.02 per share) for the first six months of
2007 compared to net losses of $0.02 million ($0.0003 per share) and
$1.3 million ($0.02 per share) respectively for the same period of 2006.
    Gold production totalled 6,144 ounces for the quarter, with a head grade
of 24.3g/t compared to production of 6,951 ounces with a head grade of
33.4 g/t in the corresponding period of 2006. Gold sales during the quarter
totalled 7,994 ounces at an average price of $581 per ounce. 3,060 ounces were
sold into a forward contract at an average price of $443 per ounce.
4,934 ounces were sold at spot with an average price of $667 per ounce. Cash
costs per ounce sold increased from $336 per ounce in the second quarter of
2006 to $344 per ounce in the second quarter of 2007.


    Avnel's principal asset is an 80% interest in Societe des Mines d'Or De
Kalana ("SOMIKA"). The State of Mali holds the remaining 20% interest in
SOMIKA. SOMIKA is the owner and operator of the Kalana Gold Mine located in
the southwest of Mali and is the holder of an exploration permit in respect of
387.4 kilometres squared in south western Mali. Avnel's strategic objective,
through SOMIKA, is to commercially exploit the reserves at the Kalana Gold
Mine, and enhance the economics of the Kalana Gold Mine through underground
exploration to increase mineral reserves and through surface exploration.

    Production data for the Kalana Mine for the three and six month periods
ended June 30, 2007 and 2006 are as follows:

                                              Three months        Six months
                                              ------------        ----------
                                             ended June 30     ended June 30
                                             -------------     -------------
                                             2007     2006     2007     2006
                                             ----     ----     ----     ----
    Tonnes milled                           8,694    7,184   15,947   13,378
    Gold grade - grams per tonne (g/t)       24.3     33.4     31.1     29.5
    Recovery rate - %                        90.3     90.0     92.6     89.4
    Gold production - ounces                6,144    6,951   14,764   11,363
    Cost per tonne milled                    $292     $327     $289     $308
    Operating cost per ounce of gold sold    $344     $336     $318     $366
    Operating cost per ounce of gold
     produced                                $413     $338     $313     $362

    Gold production of 6,144 ounces in the second quarter of 2007 was in line
with plan and 12% lower than the production in the second quarter of 2006. The
higher gold production than plan was due to higher mill throughput (23%),
lower grade (20%) and higher gold recovery of 90.3% (plan 88.7%).
    Tonnes milled in the second quarter of 2007 were 21% above the production
achieved in the corresponding period of 2006 and 23% above the planned
production for the second quarter. Production from stoping on vein 1 was ahead
of plan as productivity improved with up dip mining from the 160 level.
    The gold grade of ore milled in the second quarter of 2007 was 17% lower
than the corresponding period of 2006 and was 21% lower than the plan. Mining
has commenced in lower mineral reserve grade blocks (19g/t) during the quarter
and this has resulted in a decrease in grade to mill. Mining of these lower
grade mineral reserve blocks has started ahead of plan as the overall ore
production is 23% ahead of schedule. Gold recovery (90.3%) in the plant was
similar to the corresponding period in 2006 but exceeded the plan (87.6%).
Gold recovery decreased from the first quarter of 2007 due to a lower head
    Development advanced 419 metres in the second quarter of 2007 compared to
the planned 528 metres. Development on 150 and 180 level was delayed during
the installation and commissioning of the new rock winding arrangements at
No 2 shaft.


    Avnel completed the first phase of exploration on the Fougadian
Exploration Permit. A total of 8,241 soil samples (including 468 controls)
were collected along E-W oriented lines spaced 200 meters apart (N-S), with a
sample spacing of 50 meters in an E-W direction. All samples were analysed for
gold (fire assay) and for a 35 multi-element suite (ICP-AES) that includes
arsenic, copper and potassium. Parallel to the sampling programme, three other
studies have been initiated: an inventory of the orpaillage sites present
within the permit (26 orpaillage sites have been inventoried in the Fougadian
Permit totalling approximately 12,400 pits, and six sites among them contain
more than 1,000 pits); a regolith study; and an interpretation of the SYSMIN
airborne geophysical survey.
    The results of the survey have outlined several km-scale, gold-in-soil
anomalies and coincident arsenic anomalies. The numerous significant gold and
ars enic anomalous clusters that have been delineated were grouped into       
 14 anomalies (Avnel-1 to Avnel-14). It was observed that these 14 gold
anomalies fall along three major mineralised corridors. Two of these corridors
are sub-parallel, strike approximately N-S and can be traced nearly
continuously through the length of the property. The third corridor strikes
NNE-SSW and passes through the south-eastern and north-eastern quadrants of
the licence.
    Avnel is now preparing a phase two exploration program that will include
a RC drill program and possibly diamond drilling in the 2008 field season.
    Additional information is available in the MD&A for the quarter ended
June 30, 2007 which is available on the Canadian System for Electronic
Document Analysis and Retrieval (SEDAR) at www.sedar.com and the Company's
website www.avnelgold.com.

    Caution Regarding Forward Looking Statements:

    Statements regarding the corporation's plans with respect to the Kalana
Mine and exploration of the Kalana Permit are forward-looking statements.
There can be no assurance that the planned ongoing development of the Kalana
Gold Mine will be completed as forecast or that the exploration program on the
Kalana Permit will identify minerals resources.

    The TSX has neither approved nor disapproved the form or content of this
    information release.
    %SEDAR: 00021819E

For further information:

For further information: Roy Meade, Chief Executive Officer, +44 207 589
9082, Fax +44 207 589 8507, rmeade@avnelgold.com, www.avnelgold.com; Renmark
Financial Communications Inc.: Barry Mire: bmire@renmarkfinancial.com; Maurice
Dagenais: mdagenais@renmarkfinancial.com, (514) 939-3989, Fax: (514) 939-3717,

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