Avnel Gold Mining Limited - Exploration update

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

AVNEL APPOINTS GROUP GEOLOGY MANAGER

ST. PETER PORT, Guernsey, May 23, 2013 /CNW/ - Avnel Gold Mining Limited ("Avnel" -  TSX: AVK) is pleased to report on the status of its 387.4 km² Kalana Exploitation Permit and its abutting150 km² Fougadian Exploration Permit in Mali.

Kalana Exploitation Permit

• 158,000 metres of diamond and RC drilling have been completed and fire assayed (using classical 50g fire assays)
  
  
• Well developed geological model demonstrates three main domains at the Kalana deposit which are potentially open pittable in a single pit to a depth of at least 150m (approximately 40-50% free digging)
  
  
• Expert consultant advice indicates that the assay protocol used by IAMGOLD underestimates the gold grade in the coarse nuggety gold deposit, and a limited assaying programme to optimize grade estimation is under review
  
  
• Prior to the automatic termination of its option agreement with Avnel in February 2013, IAMGOLD expended approximately $32 million generating a very extensive geological database significantly enhancing and progressing the potential for a bulk minable deposit
  
  
• Avnel has engaged Dundee Securities to assist in exploring all options available to maximize the value of the project

Fougadian Exploration Permit

• Whilst work was suspended following the coup in Mali in March 2012 and with the onset of the rainy season, IAMGOLD has nearly completed a fully equipped exploration camp and infrastructure to commence an air core drilling programme.
  
  
• Airborne geophysics and ground based IP in association with termite mound geochemistry indicates four +1 km high priority targets over approximately 20 km in strike

Appointment of Dr. Olivier Femenias as Group Geology Manager

Avnel is pleased to announce the appointment of Dr. Olivier Femenias as Avnel's Group Geology Manager. Dr. Femenias was previously the IAMGOLD Project Geologist responsible for the exploration program at Kalana from 2009 to 2012.  He has an intimate knowledge of the Kalana Project and the 14 gold anomaly targets on the Kalana Permit. Dr. Femenias was awarded a PhD in geology (Honors with jury's congratulations) by the University of Brussels and the University of La Rochelle in 2003.  He was Assistant Professor at Brussels University from 2006 to 2009.  Dr. Femenias has an outstanding academic background married to extensive field experience at the Kalana Project.

Kalana Exploration Update May 2013

Avnel entered into an agreement (the "Option Agreement") with IAMGOLD on August 10, 2009 pursuant to which IAMGOLD had the right to earn a 51% interest in Avnel's interest in the Kalana Permit by spending $11 million over a three year period and delivering a resource study of at least 2 million ounces of gold as well as proceeding with a feasibility study. The IAMGOLD work programme focussed primarily on the evaluation of the Kalana Mine and its environs to examine the potential for a large scale, bulk mineable resource. The Option Agreement automatically lapsed on March 1, 2013 as IAMGOLD did not produce a Resource Study as defined in the Option Agreement within the timeframe allowed.

IAMGOLD spent approximately $32.0 million on the Kalana Main Project between August 2009 and February 2013. Under the terms of the agreement IAMGOLD's cost receivable has been forfeited to Avnel. Avnel has received an extensive geological database after the completion of 127,000 metres of drill holes at the Kalana Mine that has added value to the future development of a bulk mineable deposit. At the Kalanako prospect, IAMGOLD completed 27,000 metres of drilling. IAMGOLD reported that 11 gold anomaly targets were identified on the Kalana Permit that are worthy of additional exploration.

Avnel has appointed Snowden Mining Consultants to review the sampling procedures utilised at the Kalana deposit which demonstrates a high coarse gold nugget effect. Dr. Simon Dominy, from Snowden, an expert in this field, has reviewed the nature of the coarse gold mineralisation at Kalana and has concluded that the current sampling and assay protocols (classical 50g fire assays) are not optimised for coarse gold mineralisation present in the Kalana deposit since the protocols are likely to underestimate gold grade. Snowden will complete the study in June 2013 and work with Avnel to design appropriate protocols and a potential re-sampling and assay program. Options for improved protocols include the use of screen fire assays, Bulk Leach Extractable Gold assays and laboratory-scale gravity processing of samples.

Assuming that Snowden recommends the re-assay of the 2010-2012 drill hole samples, Avnel will review commencing a program to complete the re-assay of the mineralised samples during 2013, at an estimated cost not to exceed $1 million. The results of the re-assay would be incorporated into the database and a mineral resource estimate.  Sufficient RC chip samples and diamond drill core rejects or pulps are available for re-assay. The witness diamond drill core is available if required.

As announced on March 1, 2013, Avnel has appointed Dundee Securities to assist in exploring all options available to maximize the value of the Kalana project and shareholder value.

Work to date on the Kalana Permit

158,000 metres of diamond and RC drilling has been completed in 2010, 2011 and 2012. During 2013 exploration activity was limited to assaying of 2012 drill samples. All the assays have been received as at May 18, 2013.

The main objective in 2012 was to complete fences of drill holes on a nominal 50m by 25m across the Kalana 1 North domain, Kalana 1 South domain and Kalana II domain to enable geological cross sections to be generated and a resource study to be completed. This drilling was completed during the fourth quarter of 2012 (see Figure 1). All Figures referred to in this release will be posted together with the release at www.avnelgold.com.

The Kalana mine area is geologically defined by three structural domains based on the dip and strike of the quartz veins. These domains are known as Kalana I North, Kalana I South and Kalana II all located in the immediate vicinity of the current mine operations. Within these domains, the predominant strike and direction of quartz vein packages varies.  In Kalana 1 North veins are dipping predominately south. In the Kalana I South domain the predominant dip direction is east and can be projected south east into Kalana II.

Underground mining has been limited to the high grade quartz mineralisation below the saprolite that is an average depth of 70m below surface. Approximately 600,000 tonnes have been mined between 1985 and 1991 and between 2004 and now, between 85m and 220m below surface. This represents a high grade tailings resource of 34,000 ounces at approximately 2 g/t.

KALANA I NORTH

Assay results from fifty seven diamond drill holes and sixty nine RC holes reported show that a mineralised zone, running 400m north of No 2 Shaft and extending over an east west strike of 230 metres, has significant mineralised packages with potential for bulk mining to at least 150 metres below surface.

Kalana 1 North has been drilled systematically over six north-south sections and three east-west sections.  Fifty seven diamond drill holes have intersected mineralised zones of varying width and grade.  Forty eight holes were drilled at a sixty degree angle from south to north at fifty metres between drill hole collars to intersect the predominantly north-south plunging vein structures.  Nine diamond drill holes were drilled at sixty degree angle from east to west at approximately 100m between drill hole collars.  The surface area covered by the drill sections is 278m (east-west) by 400m (north-south).

A RC drilling campaign was completed in 2012 to infill between the diamond drill holes to a programmed hole depth of 150m to 200m. This has provided information from drill holes spaced 25 metres apart along the north-south drill lines that are approximately spaced at 50 metres apart.  All assay results have been received and are available at www.avnelgold.com.

Geological modeling was completed by IAMGOLD by end 2012 (see Figure 2). In the major mineralised zones, new results confirm the continuity of the mineralised packages identified by previous drilling and underground mining. The main mineralised packages are associated with main veins such as Vein 17, Vein 20, Vein 14, Vein15, Vein 18 and Vein 18C. The Vein 17 mineralised package is generally the thickest with good grades.

Underground development and previous drilling have shown that there is potential for long intersections of lower grade mineralisation in the far north of the Kalana 1 North Domain. This zone lies between 300m and 400m north of No 2 shaft. This zone will possibly be part of the northern extremity of an open pit and could provide lower grade ore to the plant as part of the stripping of the pit. The mineralisation is associated with the major quartz veins that plunge from near surface to the south and have been mined underground down to 230m below surface. Between the major veins, vertical veinlets exist that contain gold usually associated with quartz veins. The geological interpretation of the formation of this mineralised zone is being reviewed and requires additional drill holes from east to west to finalise interpretation. On Line 400 North, five RC drill holes (RC502 to RC506) were drilled from east to west at sixty degree inclination. These holes intersected possible steep, vertical quartz vein structures to support this possible interpretation. IAMGOLD has modelled these zones with a width of 10m. Further drilling will be required to demonstrate the continuity of these steep, mineralized structures.

Composites on drill Section 400N include:

• RC503: 13m at1.14g/t from 153m & 9m at 1.17g/t from 224
• RC504: 9m at 1.27g/t from 86m, 9m at 1.45g/t from 126m, 9m at 1.45g/t from 126m,
• RC505: 13m at 0.95g/t from 168m, 12m at 2.32g/t from 208m
• RC507: 11m at 2.0g/t from 9m, 13m at 0.88g/t from 100m

Composites on others sections include:

• RC530: 8m at 1.93g/t from 59m
• RC531: 9m at 2.88g/t from 189m
• RC533: 3m at 4.18g/t from 148m

Results are reported for composites >10 g/t.m with a maximum of 3m dilution (<0.5g/t)

KALANA I SOUTH

The diamond drill and RC assay results continue to demonstrate the potential for an open pit in the Kalana 1 South domain, running east-west over 600m and with a north-south strike varying between 250m to 400m, to a depth of 120m.

The main mineralized zones strike approximately north-south and dip from west to east at approximately twenty five degrees.  Some of these zones extend north into the Kalana 1 North domain.

Kalana 1 South has been drilled systematically over eleven east-west sections and six north-south sections. The surface area covered by the drill sections is 540m (east-west) by 530m (north-south).  These drill sections are spaced at 50 metres. Sixty six diamond drill holes and one hundred and twenty eight RC drill holes have intersected mineralised zones of varying thicknesses and grade. The drill density is 50m by 25m down to a depth of 100m where most RC drill holes ended. The diamond drill holes continue to a greater depth and provide data at a wider spaced drill hole collar position.

Assay results have been received for all drill holes and recent assay results are shown on the Avnel Gold website www.avnelgold.com

Diamond and RC drill hole results from the 2010, 2011 and 2012 drill campaigns have shown a number of mineralised zones associated with major quartz veins (1, 3, 10, 20C and Savane).  Between these major mineralised zones the model shows other mineralised zones.  The recent RC drill assay results have provided additional data that was modeled by IAMGOLD.  Assay results include high grades that would be expected as Veins 1 and 3 have been mined underground between 2004 and 2007. The average mined grade of Vein 1 was in excess of 20g/t over 1.8m mining width.  Seven diamond drill holes were drilled to test the extension of the Vein 1 mineralised package to surface from 85m elevation in the saprolite.  The recent assay results confirm the extension of Vein 1 in the saprolite above 80m level to surface. RC529 intersected 4m at 1.67g/t from 63m and 6m at 2.61g/t from 96m. RC528 intersected 12m at 2.17g/t from 50m.

Recent RC drilling shows that Vein 10 and Vein 3 extend approximately 215m north of the No 1 shaft (see Figure 1) and results reported above for RC530and RC531.

KALANA II

The results confirm the existence of an extensive mineralised zone down to at least 100m below surface over a surface area of 350m by 150m.  One main vein, Vein Savane, has been modelled down to 150m below surface and is similar to the high grade veins (Veins 1, 3 and 10) dipping from west to east

Kalana II has been drilled over four east-west sections and eight north-south sections. The surface area covered by the drill sections is 350m (east-west) by 400m (north-south).Seventeen diamond drill holes and one hundred and sixty RC drill holes have intersected mineralised zones of varying width and grade

Assay results have been received for all drill holes and recent assay results are shown on the Avnel Gold website at www.avnelgold.com.

During the fourth quarter 2012 RC drilling was mainly focused at Kalana II. Assay results have been received with encouraging composites. The better results include:

• RC509: 1m at 19.2g/t from 18m
• RC510: 4m at 18.9g/t from 154m (Vein Savane)
• RC511: 5m at 14.1g/t from 130m (Vein Savane)
• RC512: 2m at 8.47g/t from 124m
• RC513: 7m at 10.6g/t from 211m
  
  
• RC515: 13m at 0.85g/t from 157m, 7m at 1.79g/t from 181m
• RC519: 2m at 14.3g/t from 155m (Vein Savane), 3m at 8.24g/t from 214m (EOH)
• RC520: 5m at 3.51g/t from 174m (Vein Savane)
• RC522: 10m at 0.97g/t from 32m, 14m at 1.4g/t from 140m (Vein Savane), 8m at 1.55g/t from 169m
• RC523: 11m at 1.81g/t from 118m (Vein Savane)
• RC525: 2m at 5.33g/t from 87m

Results are reported for composites >10 g/t.m with a maximum of 3m dilution (<0.5g/t)

Geological interpretation and modelling is in progress.  Preliminary interpretation indicates the presence of two mineralised packages (named Savana and Superette) dipping from surface to the east. Gold mineralisation exists outside these two packages but has still to be fully modelled but is located along the boundary of the east -west diorite. This mineralized zone around the diorite contact covers an area of 150m by 350m. Infill drilling will be required to effectively model the gold mineralization outside the two main mineralized packages.

The recent RC drilling in 2012 continued to a depth of approximately 200m, deeper than previous drill holes.  There is an indication of mineralisation continuing below 100m and may enable mining to extend down to 150m below surface.

RC 475 and RC 476 were drilled from south to north at an inclination of 55 degrees.  The long composites have intersected the Vein Savane mineralisation that dips from west to east.  It appears there may be some sub vertical gold bearing structures below Vein Savane at the contact with the main diorite body.

KALANAKO

Kalanako is located three kilometres north east of Kalana.  Two mineralised trends, with strike lengths of 500m and 250m, have been established from the RC drill assay results. These mineralised zones appear to be steep dipping over a width of less than 10 metres. Closer spaced drill holes will be required to define a mineral resource.

During 2010, 138 RC drill holes, totalling 14,460m were completed at Kalanako. Holes were drilled to an average of 105m hole length at an inclination of 55 degrees. Hole collars were spaced 50m apart.  Assay results have been received and previously reported for 138 holes.  In the fourth quarter of 2011, 3,741 metres of RC drill holes were completed and assay results are reported in the May, 2012 press release. During 2012 thirty seven RC drill holes were completed and all assay results received.  Twenty six diamond drill holes were completed at Kalanako. Holes are drilled from east to west at an inclination of sixty degrees. Diamond drill assay results have been received for all twenty six holes.   Results have been previously reported at www.avnelgold.com.

The depth of saprolite and saprock is approximately 150 metres, much deeper than that observed at Kalana.  Diamond drilling at Kalanako displays numerous high strain zones (shearing and folding), packets of dense laminated quartz vein with sulfides and locally, highly altered and mineralized felsic intrusives.  Mineralisation is associated with these felsic intrusive rocks that intrude NW-SE striking shear zones.  Diamond drill results to date show generally low grades over narrow widths at the depth.

DJIRILA

The Djirila prospect was discovered by Avnel Gold in 2004 and drilling in 2005/2006 identified high grade mineralisation down to a depth of 150 metres.  Djirila is located in the south east portion of the SOMIKA permit (see Avnel Gold Press Release dated April 19, 2006).

A RC drill program commenced on April 23 and was suspended on May 2, 2012.  A total of 19 drill holes for 2, 535 metres were drilled.  Drill samples were transported to the Kalana mine where sample preparation was performed at the SGS sample preparation laboratory.  Assay results have been received and are reported on the Avnel Gold website at www.avnelgold.com.

The RC drill results show the continuation of gold mineralisation in the package delineated by Avnel Gold.  Seven holes were drilled at the southern limit of the mineralisation and generally show lower grades than that reported in the core of the mineralisation reported by Avnel Gold in 2006.

Better results include:

• DJ-RC019: 7m at 0.91g/t from 25m, 6m at 1.8g/t from 85m and 9m at 2.25g/t from 80m
• DJ-RC014: 5m at 2.49g/t from 65m
• DJ-RC013: 6m at 0.85g/t from 0.85m
• DJ-RC012: 5m at 1.03g/t from 27m and 3m at 1.35g/t from 53m
• DJ-RC010: 8m at 0.97 from 12m, 7m at 0.91g/t from 29m and 3m at 1.47g/t from 47m

These results are from step out drilling on the southern margin of the footprint drilled by Avnel, the results of which were reported on April 19, 2006.

Target Generation on the Kalana Permit

Following the high-resolution airborne geophysical survey made in 2009 and exploration work performed by Avnel since 2004, an extensive geochemistry (38,519 Termite Mound samples on 530km²; 1 sample per ha or 2ha), covering the entire surface of the licences, has been conducted between 2010 and 2012. Each sample was analysed for gold using a conventional 50g fire assay and 30 other trace elements by portable bench-top XRF. Arsenic and gold geochemical maps of the properties define together mineralization trends well constrained by magnetic structures. Most of gold (and/or arsenic) anomalies display a strong structural control at regional and local scales (see Figure 3).

At least fifteen gold targets have been identified. Eleven of these targets are included in the SOMIKA permit. The five others occur in adjacent Fougadian exploration permits discussed below. The ten SOMIKA permit targets include Kalanako and Djirila that have been drilled as reported above; Solomanina and Tenintoumanina-Kaladiani that display a high prospectivity on large areas; Tonda which is less extended but well defined and Kodialani close to the Kalana deposit. Fougadian exploration permits is characterised by at least two long (~20km) N-S structures well defined by geophysics, gold and arsenic anomalies. These mineralised structures include long km-scale targets as Maramale, Leba and Korianko and extensions into the SOMIKA permit (Sananfarani).

Geophysics

A gradient array IP survey has been carried out over several drill targets identified by geochemistry results.

The 2011 IP survey over Ténintoumanina, Djirila and Kalanako grids is being processed and some initial results have been produced.

During 2012 a ground geophysics survey was completed on several target areas defined by geochemistry.  A total of 337.4 line-km was completed at Kalanako, Kalana, Djirila and Solomanina. The survey was done by Sagax, a specialist company with extensive experience in West Africa.  Preliminary results and interpretations have been received.  This will be used for the optimum locating of future drill holes.

Metallurgical Test Work

A total of 50 bulk metallurgical samples were submitted for heavy concentrate analysis by using the Knelson concentrator at the SGS laboratory in Johannesburg. The samples consist of 1m length of 5m composites.

The test program required processing each individual sample through the gravity concentrator and then direct cyanidation of the gravity concentrator tailings.  The main objective of the study was to determine the head grade of the bulk samples by gravity and leaching.  It is expected that large samples will result in a better gold estimation, at a significantly higher process cost.

The RC drill hole samples had previously been assayed using conventional 50g fire assay in Mali. The chip rejects were submitted to SGS in South Africa to compare the results of a bulk sample to a standard 50g fire assay.

IAMGOLD reported initial indications are that the bulk samples analysed in Johannesburg and metallurgical samples previously analysed in Canada display the same behaviour as illustrated by the "Poisson effect" during sub-sampling with the global under-estimation of grade using a classical FA 50g approach.

IAMGOLD reported that 50g fire assay results underestimate grade when the FA grade is 4g/t or higher. In the range 1g/t to 4g/t the FA and the bulk sample assays report similar results.  In the range below 1g/t there appears to be some limited upgrade in bulk sample assays compared to 50g FA results.

SOMIKA observed that the gravity recovery in a 5m composite varied considerably for each 1 metre sample. The higher grade sample generally showed recovery to gravity of 60% plus, whereas the lower grades generally reported 80% plus gold being recovered from the tails.  Gravity recovery over the 50 samples ranged from 8% to 90% plus. This demonstrates that the gold size distribution varies through a 5m mineralised package, with the larger gold particles associated with major quartz veins. This aligns with historic mining experience of 2m stopes and development crosscutting mineralized packages.

Historically grade estimates using drill hole assay results has always significantly underestimated mined grades at Kalana.  The mass of sample from a bore hole is normally reduced to a 50g sample for fire assaying.  Using a larger bulk sample will address some of the underestimation of drill hole grades, but at a considerable cost.  An alternative protocol is to use screen metallic assaying methodology of 1 kilogram samples. The proposed protocol will be finalized on receipt of the recommendations from Snowden

QAQC

Sample protocol entailed the splitting of the core by diamond core saw was carried out by IAMGOLD staff at the Kalana mine site.  Half of the sample is preserved at the Kalana mine site and the other half separated by the metre and dispatched to the SGS analytical facilities in Bamako, a certified assay lab in West Africa.  Each meter sample was dried, crushed to 90% passing 2mm, pulverized to 85% passing 75 micron, and then split using a cone splitter.  Approximately 200 grams of the pulverised sample was placed in sealed packets and sent to the SGS assay laboratory in Kayes, Mali.  Samples were analyzed for gold using a 50g fire assay.  Rejects are returned to the Kalana Mine site and were stored by IAMGOLD staff.

RC samples are prepared at the Kalana mine site.  The cuttings are sampled in one-metre intervals, at a rate of six samples per drill rod. Individual samples are collected at the rig and transported to the mine site for air drying in pans as required (mostly for samples from the lower parts of the RC holes).  The samples are weighed at the drill rig.

The dried samples are split in a large riffle to produce a sub-sample of nominal 2.5 kg for subsequent assaying.  Chip boards, washed samples for logging, and pan concentrates for the observation of any free gold are also prepared.  These activities were carried out by IAMGOLD personnel to industry standards.

The 2.5-kg sub-sample is taken to the SGS preparation laboratory.  The sub-sample is weighed by SGS personnel and recorded.  The entire sub-sample of nominally 2.5 kg is crushed to a nominal 90% passing 2mm and pulverized to a nominal 85% passing 75μ. A sub-sample of nominally 200 g is taken from the pulverized material and placed in a Kraft paper bag for transport to the analytical laboratory.  Since October 2010 the 200g sub sample has been collected by riffle splitting to avoid possible segregation of heavy gold particles after pulverisation.

As part of the QAQC program, control samples are added.  These control samples include standards, blanks and field duplicates.

Avnel issued press releases on its Kalana exploration project on January 31, 2011, February 22, 2011, May 26, 2011 October 11, 2011, March 12, 2012, May 15, 2012 and August 14, 2012. Exploration is also reported in the quarterly MDA. Assay results and drill collar co-ordinates are reported in these press releases posted on Avnel's website www.avnelgold.com.  Assay results and drill collar coordinates for results received since August 2012 are now posted on Avnel's website.

Fougadian Exploration Permit

On October 17, 2006, Avnel was awarded the Fougadian Exploration Permit which lies south of the Kalana Permit. The Fougadian Exploration Permit covers an area of 150 km² including a portion of the Niessoumala exploration area.  The permit was awarded in accordance with the 1999 Mining Code and a foundation agreement (the "Foundation Agreement") was signed between Avnel Mali, a 100% wholly-owned subsidiary of Avnel, and the Government of the Republic of Mali.   The Foundation Agreement provides for the exploration and exploitation of Group 2 minerals as defined in the 1999 Mineral Code.  Group 2 minerals include gold and silver, and base metals, but exclude precious stones, semi-precious stones and fossils.

Avnel applied for a renewal of the Fougadian Exploration Permit and this was granted in March 2010, with the commencement date December 2009.  Avnel has specified a new area of 75 sq. km as required by the Malian Code.  This area lies in the northern half of the original permit and includes the largest anomaly Avnel 1 (now called Maramale). The renewal was for 3 years and Avnel has committed to expenditures of $1.9 million over this period.  As at December 31, 2012 expenditure totalled US$1.8 million.

The Permit expired in December 2012.  Avnel is applying for a three year extension of the permit and is confident this will be granted during the second quarter.

Joint Venture Arrangements Agreement Fougadian Permits

In 2010, Avnel Gold and IAMGOLD entered into 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.

The Fougadian Exploration 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 applied for an exploration permit in respect of the southern 75 sq. km and this was granted on June 20, 2012.  The combined permits are referred to as the "Fougadian Exploration Permit".

During 2012, IAMGOLD had proposed a $6.5 million budget to follow up the exploration results achieved in 2010/2011. The work program planned RC drilling at the Avnel 1 gold anomaly (now called Maramale) to follow up the targets identified by geochemical sampling of termite mounds and geophysical structures identified by airborne geophysics.

Following the military coup in Mali in March 2012, IAMGOLD, as the Operator, halted the planned drilling program.  A ground geophysics program was completed over the Maramele target by SAGAX. 192 line kilometers were completed and result received.  The results confirm the previous interpretation as reported above.

Avnel is waiting for a 2013 detailed work program and budget from IAMGOLD. Due to the state of emergency in Mali, IAMGOLD closed its Bamako office in January. The office re-opened in April and staff started preparation for the exploration program for 2013.

IAMGOLD is considering an air core drill program to further define the optimum targets within the Maramale anomaly and other anomalies prior to an RC drill program.

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 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.

SOURCE AVNEL GOLD MINING LTD.