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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.
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 as well as on Avnel's abutting Fougadian Exploration
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.
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
SOURCE: AVNEL GOLD MINING LTD.