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ST. PETER PORT, Guernsey, Dec. 6 /CNW/ - Avnel Gold Mining Limited ("Avnel") (TSX: AVK) - Avnel and IAMGOLD Corporation ("IAMGOLD") are pleased to announce that they have entered into a joint venture arrangements agreement (the "Joint Venture Arrangements Agreement") whereby IAMGOLD has the option to acquire up to an initial 51% interest in Avnel's 90% interest in the Fougadian Exploration Permit referred to below.
IAMGOLD and Avnel are currently in the second year of the Option Agreement in respect of the large Kalana Exploitation Permit (387.4 sq. km) held by Avnel through its 80% interest in Société d'Exploitation des Mines d'Or de Kalana (the "Kalana Project") in south-west Mali.
The Fougadian Permit held by Avnel previously comprised 150 sq. km. to the south of and abutting the Kalana Exploitation Permit. Avnel relinquished the southern half of its ground in accordance with the Malian Mining Code and was granted a new exploration licence on the northern half on March 23, 2010. IAMGOLD has applied for an exploration permit in respect of the southern 75 sq. km. and it is believed that its application will be granted shortly. The combined permits are referred to as the "Fougadian Exploration Permit".
During 2006 and 2007, Avnel conducted a soil geochemical sampling programme under the supervision of Michele Mercier over the Fougadian Exploration Permit.
Numerous significant gold and arsenic anomalies were delineated and grouped into 14 anomalies (Avnel-1 to Avnel-14). It was observed that these 14 gold anomalies fall along three major mineralized corridors. Two of these corridors are sub-parallel, strike approximately north-south, and can be traced nearly continuously through the length of the property. The third corridor strikes north, north-east and south, south-west and passes through the south-eastern and north-eastern quadrants of the permit and continues onto the Kalana Exploitation Permit where Avnel drilled the Djrilla target with excellent results. (See Avnel's Press Release of July 17, 2006 on SEDAR and at www.avnelgold.com).
The Avnel-1 anomaly is the largest and the most important in terms of gold and arsenic values. It extends for almost 4 km in a north-south direction and for 1.5 km in an east-west direction.
Other significant km-scale gold anomalies have been delineated within the Fougadian Exploration Permit area. Among them, the most important in terms of potential are considered to be Avnel-5, Avnel-6, Avnel-7, Avnel-8, Avnel-2 and Avnel-3.
The drill program was focused on the Avnel-1 target. The anomaly is defined by an area where values generally exceed 32ppb Au and attain a maximum of 1731ppb Au. It extends for almost 4 kilometres in a north-south direction and for 1.5 km in an east-west direction.
Two diamond drill holes were completed to a depth of 190 metres in order to provide information on the bedrock structure that can be used to optimise the orientation of the RC drilling programme. 48 inclined RC drill holes totalling 5,422 metres were completed on a grid pattern during the second quarter, covering only a small portion of the Avnel-1 anomaly. The holes were drilled in a heel-to-toe fashion to ensure complete coverage across the width of the anomaly. As the budget was inadequate to fully test this large anomaly, the holes were drilled along pairs of lines spaced 200m apart, one pair in the north and a second pair 800m further to the south. Because of encouraging geological indications, an additional three holes were drilled to the south of the latter set of lines.
In summary, out of the 50 holes drilled, 15 (30%) intersected values above 1g/t Au.
An airborne geophysics study was completed by IAMGOLD in the fourth quarter 2009. The study covered the total Fougadian Exploration Permit. The study generated new information on magnetic, radiometric and topographic data. The study improved the quality of previous surveys as the line spacing (50m) and height flown (25m) is superior to previous work. The interpretation of the results is ongoing. The IAMGOLD geophysics confirmed the coincident potassium and magnetic anomalies along the shear zone with two well-defined north striking corridors.
Under the terms of the Joint Venture Arrangements Agreement, IAMGOLD will fully fund and satisfy the expenditure requirements of the Fougadian Exploration Permit and, upon establishing a qualifying mineral resource of not less than 250,000 oz of gold, may earn a 51% interest (of Avnel's 90% interest) in the permit. Upon delivery of a pre-feasibility study, IAMGOLD will be entitled to increase its interest to 65%. After delivery of a feasibility study, IAMGOLD will undertake to procure or provide project financing to develop a mining operation.
The results of IAMGOLD's on-going work programme at the Kalana gold mine (the "Kalana Mine") and its environs in the north-west of Avnel's large Kalana Exploitation Permit are very encouraging with the work focused on delineating a bulk mineable resource around the Kalana Mine. IAMGOLD have also carried out regional work on the remainder of the Kalana Exploitation Permit, geophysics over the Fougadian Exploration Permit and reviewed the database from Avnel's prior work on the Fougadian Exploration Permit. IAMGOLD considers this 550 sq. km. land package with its significant resources in the well mineralized system at the Kalana Mine and the high prospectivity potential of the remainder of the package to be of significant value.
The terrain of the Kalana Exploitation Permit and the abutting Fougadian Exploration Permit is relatively flat, conducive to trucking ore to a centralized processing facility.
Howard Miller, CEO of Avnel, welcomes the opportunity of consolidating Avnel's large land package traversed by a significant arceate shear zone with an abundance of geochemical anomalies and favourable structures and welcomes IAMGOLD's participation in the Fougadian Exploration Permit area and the promising potential IAMGOLD is beginning to identify and define.
ABOUT THE COMPANY
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.
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. 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. 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.
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 described herein.
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.
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